225 So. 3d 229
Fla. Dist. Ct. App.2017Background
- Appellant held an auto policy with PIP benefits from State Farm and was treated after an accident; State Farm paid part of providers’ charges and providers billed appellant for the remainder.
- Appellant sued for declaratory relief, alleging State Farm in practice relied exclusively on Medicare fee schedules to set the “reasonable amount” under Fla. Stat. § 627.736(5)(a)(1) despite not electing the fee-schedule option in the policy.
- If an insurer elects the Medicare fee-schedule method under § 627.736(5)(a)(2), it must disclose that election in the policy, and balance-billing by providers is then prohibited; State Farm did not make that election in appellant’s policy.
- State Farm moved to dismiss, arguing that because the policy did not elect the fee-schedule method, appellant’s claim (that State Farm nonetheless used it) failed to state a claim; the trial court granted dismissal.
- This court reversed, concluding the question whether an insurer may in practice use the Medicare schedules as the exclusive basis for a “reasonable amount” under the non-fee-schedule statutory method was unresolved and remanded for further proceedings and leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether insurer can, in practice, base "reasonable amount" reimbursements solely on Medicare fee schedules when policy did not elect the fee-schedule option | State Farm was relying exclusively on Medicare fee schedules to determine reasonable PIP reimbursements, which, without a policy election/notice, subjects insured to improper balance billing | Because the policy did not elect the Medicare fee-schedule method, a claim that the insurer elected it without notice fails to state a claim; dismissal appropriate | Reversed: question unresolved by precedent; complaint reinstated and plaintiff given leave to amend |
| Whether dismissal for failure to state a declaratory judgment claim was proper | Declaratory relief appropriate to determine rights and insurer practice under § 627.736 | Dismissal proper because policy language shows no election, so statutory protections against balance billing do not apply | Reversed: court must accept pleadings and resolve whether methodology effectively limited reimbursements |
| Appropriate relief and class certification issues if declaratory relief succeeds | Plaintiff sought reimbursement of amounts billed by providers (class relief) | State Farm challenged suitability of class action and argued relief inappropriate because insured had contractually agreed to balance billing | Court noted relief may require multi-step determination of reasonable amount vs. Medicare amount, and class/manageability and notice issues must be considered on remand |
Key Cases Cited
- Northwest Ctr. for Integrative Medicine & Rehab., Inc. v. State Farm Mut. Auto. Ins. Co., 214 So.3d 679 (Fla. 4th DCA 2017) (held issue whether insurer’s practice could effectively limit reimbursements to Medicare schedules under § 627.736(5)(a)(1) not conclusively resolved; reversed dismissal)
- Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So.3d 147 (Fla. 2013) (insurer must provide policy notice to elect Medicare fee-schedule method; reasonableness is fact-specific)
- N & D Holding, Inc. v. Town of Davie, 17 So.3d 819 (Fla. 4th DCA 2009) (standard for sufficiency of declaratory judgment complaint: plaintiff need only be entitled to a declaration of rights)
- Acad. Express, LLC v. Broward Cty., 53 So.3d 1188 (Fla. 4th DCA 2011) (standard that allegations and reasonable inferences in complaint must be accepted as true on review of dismissal)