Geico Indemnity Co. v. Virtual Imaging Services, Inc.
79 So. 3d 55
| Fla. Dist. Ct. App. | 2011Background
- Two consolidated PIP cases against GEICO involve MRI charges billed by Virtual Imaging for two insureds (Bajos and Gomez).
- GEICO paid 80% of 200% of Medicare Part B allowable under the PIP fee schedule; Virtual Imaging sought 80% of the billed amounts.
- Policies state GEICO will pay 80% of medical expenses, defined as reasonable expenses for medically necessary services.
- The trial court granted summary judgment for Virtual Imaging; the certified question asked whether an insurer may limit reimbursement to 80% of the 200% Medicare amount if the policy does not elect that method.
- Florida’s No-Fault Law (Fla. Stat. § 627.736) provides a mandatory 80% reimbursement of reasonable expenses and a permissive Medicare-based schedule; the issue is whether the schedule can be incorporated and used absent an express policy election.
- The Florida Supreme Court (majority) held that the fee schedule is incorporated by law and by reference, creating ambiguity but ultimately requiring reimbursement under the schedule as a safe harbor; the dissent argues the statute provides a single method and that policy language should not be overridden.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May insurer limit reimbursement to 80% of 200% of Medicare under §627.736(5)(a)(2)(f) absent an express policy election? | Virtual Imaging (plaintiff) relies on Kingsway to say policy ambiguity allows insurer to use the schedule. | Geico (defendant) contends the statute offers two methods and policy language should control; no election needed. | No; the insureds’ policies incorporate the fee schedule; the 80% of the 200% method may not be used unless clearly elected in policy. |
Key Cases Cited
- Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63 (Fla. 4th DCA 2011) (policy language controls when not referencing permissive schedule; two methodologies exist)
- State Farm Mut. Auto. Ins. Co. v. Nichols, 21 So.3d 904 (Fla. 5th DCA 2009) (insurer must not rely on statutory language not in policy; policy controls)
- Holy Cross Hosp., Inc. v. Allstate Ins. Co., 961 So.2d 328 (Fla. 2007) (no-fault fee schedule can contractually limit reimbursement; context prior to schedule)
- Grant v. State Farm Fire & Casualty Co., 638 So.2d 936 (Fla.1994) (statutory provisions become part of contract when contract references statute)
- Northbrook Prop. & Cas. Ins. Co. v. R & J Crane Serv., Inc., 765 So.2d 836 (Fla. 4th DCA 2000) (statutes applicable at contract formation are read into contract)