Insurers typically argue that the statutory limitations must be applied first and the deductible subtracted from that amount.

The Case

After Jonathan Parent was involved in an automobile accident, he incurred bills for the medical care he received from Florida Hospital Medical Center. Those bills exceeded the deductible amount of $1,000 provided in the insurance policy issued to Mr. Parent by Progressive Select Insurance Company.

Mr. Parent assigned his PIP benefits under his Progressive policy to Florida Hospital.

The bill Florida Hospital sent to Progressive for Mr. Parent's treatment calculated the amount owed as follows:

Progressive remitted payment, but it used a different payment methodology when applying Section 627.736(5)(a)1.b.'s reimbursement limitation provision:

Florida Hospital subsequently sued Progressive, seeking the $200 difference between what it calculated the PIP benefit amount to be and what Progressive paid. After Progressive filed an answer denying liability and asserting affirmative defenses, both parties filed motions for summary judgment.

The trial court entered summary judgment in favor of Florida Hospital in the amount of $200, plus interest, thus adopting Florida Hospital's argument that the plain language of Section 627.739(2) required Progressive to subtract Parent's deductible from Florida Hospital's total charges before applying Section 627.736(5)(a)1.b's reimbursement limitation.

Progressive appealed, and the trial court's judgment was affirmed.

The case reached the court of appeal. There, Progressive contended that the reimbursement limitations contained in Section 627.736(5)(a)(1)(b) should be applied to reduce the expenses and losses and that the deductible should be subtracted from that reduced amount to arrive at the benefit amount owed to the insured.

The Florida Motor Vehicle No-Fault Law

Section 627.739(2) states:

Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, and $1,000. The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736. After the deductible is met, each insured is eligible to receive up to $10,000 in total benefits described in s. 627.736(1). However, this subsection shall not be applied to reduce the amount of any benefits received in accordance with s. 627.736(1)(c).

Regarding "expenses and losses," which are not defined in the statute, Section 627.736(1)(a) provides that the insured may be entitled to:

Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services.

Section 627.736(1)(b) refers to:

Sixty percent of any loss of gross income and loss of earning capacity

and

all expenses reasonably incurred in obtaining from others ordinary and necessary services

associated with the disability of an insured.

Section 627.736(5)(a)(1) states:

1. The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:

. . . .

b. For emergency services and care provided by a hospital licensed under chapter 395, 75 percent of the hospital's usual and customary charges.

The Court of Appeal's Decision

The majority of the court of appeal disagreed with Progressive's position, reasoning that, using Progressive's methodology, the deductible would not be applied toward 100 percent of the expenses and losses as required by Section 627.739(2).

Nevertheless, it certified the following question to the Florida Supreme Court:

When calculating the amount of PIP benefits due an insured, does Section 627.739(2), Florida Statutes, require that the deductible be subtracted from the total amount of medical charges before applying the reimbursement limitation under Section 627.736(5)(a)1.b., or must the reimbursement limitation be applied first and the deductible subtracted from the remaining amount?

The case is Progressive Select Ins. Co. v. Florida Hospital Medical Center, No. 5D16-2333 (Fla. Ct.App. Feb. 9, 2018). Attorneys involved include: Douglas H. Stein, of Bowman and Brooke, LLP, Coral Gables, for Petitioner. Chad A. Barr, of Law Office of Chad A. Barr, P.A., Altamonte Springs, for Respondent. Lawrence M. Kopelman, of Lawrence M. Kopelman, P.A., Fort Lauderdale and Mac S. Phillips and Chris Tadros, of Phillips Tadros, P.A., Fort Lauderdale, as Amicus Curiae Floridians for Fair Insurance, Inc.

FC&S Legal Comment

For prior decisions on this issue, see, e.g., Progressive Select Ins. v. Fla. Hosp. Med. Ctr., 24 Fla. L. Weekly Supp. 318a (Fla. 9th Cir. Ct. June 14, 2016); Progressive Select Ins. v. Fla. Hosp. Med. Ctr., 24 Fla. L. Weekly Supp. 200a (Fla. 9th Cir. Ct. June 14, 2016); cf. Advantacare of Fla., LLC v. Geico Indem. Co., 23 Fla. L. Weekly Supp. 841a (Fla. 7th Cir. Ct. July 24, 2015); Progressive Am. Ins. v. Munroe Reg'l Health Sys., Inc., 23 Fla. L. Weekly Supp. 707a (Fla. 18th Cir. Ct. Apr. 17, 2015); Garrison Prop. & Cas. Ins. v. New Smyrna Imaging, LLC, 23 Fla. L. Weekly Supp. 708a (Fla. 18th Cir. Ct. Jan. 12, 2015).

We will monitor this issue and this case and discuss developments as warranted.