FPCA Automobile Division: The Third District Sides with the Fourth District in Finding the PIP Fee Schedules Permissive

Dec 1, 2011


Florida Property and Casualty Association Automobile Division Members:

In Geico Indemnity Co. v. Virtual Imaging Services, Inc.,  a succinct opinion issued yesterday, November 30, 2011, by the Third DCA, the court ruled that insurers may not limit provider reimbursement to 80% of the schedule of maximum charges set forth in Florida PIP’s statute unless the policy provides a specific election to do so.

The PIP statute requires insurers to pay 80% of all reasonable and necessary medical expenses.  The statute was amended in 2007 to incorporate Medicare fee schedules for medical expenses.  Insurers are authorized by statute to limit reimbursement for MRI services to 80% of “200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.” 

Virtual Imaging, an MRI provider, submitted bills to GEICO for MRI services provided to GEICO insureds. GEICO reduced the bills to 80% of the Medicare Part B schedule as set forth in Florida PIP’s statute.  Virtual Imaging disputed the reduction since the policy obligated GEICO to pay 80% of the “reasonable [medical] expenses” and did not specifically incorporate the statutory fee schedule. 

The Third District relied on the recent case of Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 2d 63 (Fla. 4th DCA 2011), wherein the Fourth District addressed the same issue and held that the PIP statute sets forth a permissive fee schedule and, unless the insurer clearly selects that payment methodology, the policy language controls.

The opinion was followed by a lengthy dissent by Judge Rothenberg.  Judge Rothenberg relied on the legislative intent behind the 2007 and 2008 amendments to the PIP statutes that were added to avoid arguments over the reasonableness of the expenses and to specifically incorporate the PIP statutes in policies effective after January 1, 2008.  Judge Rothenberg argues that the fee schedule is not a “permissive” fee schedule that requires an “election” by the insurer; rather, the statute grants the insurer the right to limit the reimbursement according to the fee schedule. In effect, the fee schedule is a legislative-sanctioned application of the mandatory PIP coverage.  The opinion is not final until the disposition of any motions for rehearing. 

A copy of the opinion is attached in PDF format.


Should you have any questions or comments, please contact Katie Webb (kwebb@cftlaw.com) at Colodny Fass.