Florida Supreme Court Backs Allstate Policy Language in Landmark PIP Case

On January 26, 2017, after months of waiting, those of us in the PIP world finally have our answer to the Allstate policy language debate. It appears that you just need to read the policy as a whole and within its context.

Does Allstate’s PIP policy provide legally sufficient notice to its insureds of its election to use the permissive Medicare fee schedules found in Florida Statute 627.736(5)(a)2 (2009) in order to limit reimbursements for medical services?

The Florida Supreme Court released its opinion on January 26, 2017 holding that Allstate’s PIP insurance policy stating that Allstate’s policy “provides legally sufficient notice of Allstate’s election to use the permissive Medicare Fee Schedule identified in section 627.736(5)(a)2 to limit reimbursements.” Allstate Ins. Co. v. Orthopedic Specialists, No. SC15-2298, at *2, (Fla. 2017).

The case before the Florida Supreme Court involved a certified decision from Florida’s Fourth District Court of Appeals, which had held that Allstate’s policy language did not provide sufficient notice to allow the insurer to apply the Medicare Fee Schedules in limiting reimbursements to bills submitted under the PIP portion of the subject policies. The Fourth District Court of Appeals had certified its decision as it provided a direct conflict with the First District Court of Appeals’ ruling in Allstate Fire & Cas. Ins. v. Stand-Up MRI of Tallahassee, P.A., 188 So. 3d 1 (Fla. 1st DCA 2015), which held that Allstate’s policy language did in fact provide sufficient notice to its insurer’s to allow the Medicare Fee Schedules to be used in limiting reimbursements to bills submitted under the PIP portion of the subject policies. The First District Court of Appeals was not the only Court in the state to opine in favor of Allstate, in fact by the time that the Florida Supreme Court held oral arguments in this matter in August of 2016, the Second and Third District Courts of Appeals had already entered rulings on the issue agreeing with the First District Court of Appeals’ opinion that Allstate had provided sufficient notice to its insureds of its intent to limit PIP reimbursement by using the permissive Medicare fee schedules found in Florida Statute 627.736(5)(a)2 (2009).

The specific portion of Allstate’s policy language which was being evaluated in Orthopedic Specialists v. Allstate Insurance Co., 177 So. 3d 19 (Fla. 4th DCA 2015), states that Allstate will make payments as follows:

“Allstate will pay to or on behalf of the injured person the following benefits:

1. Medical Expenses

Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices, and medically necessary ambulance, hospital, and nursing services.

Id. at 21. An endorsement to the policy provides:

Limits of Liability

. . . .

Any amounts payable under this coverage shall be subject to any and all limitations, authorized by section 627.736, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including, but not limited to, all fee schedules.

Id. (emphasis and alterations omitted).” Allstate Ins. Co. v. Orthopedic Specialists, No. SC15-2298, at *3, (Fla. 2017)

The Florida Supreme Court found that “[t]he endorsement to Allstate’s policy clearly and unambiguously states that ‘[a]ny amounts payable’ for medical expense reimbursements ‘shall be subject to any and all limitations, authorized by section 627.736, . . . including . . . all fee schedules.’ When read in its context and as a whole with Allstate’s policy, the plain and obvious meaning of the endorsement is that reimbursements will be made in accordance with all of the fee schedule limitations contained within section 627.736(5)(a)2. See, e.g., Stand-Up MRI, 188 So. 3d at 3 (“Virtual Imaging requires no other magic words from Allstate’s policy and its simple notice requirement is satisfied by Allstate’s [unambiguous] language limiting ‘[a]ny amounts payable’ to the fee schedule-based limitations found in the statute.” (second alteration in original); Fla. Wellness & Rehab. v. Allstate Fire & Cas. Ins. Co., 201 So. 3d 169, 173 (Fla. 3d DCA 2016) (“The use of the phrase ‘subject to’ in the policy places the insured on notice of the limitations elected by Allstate; indeed, we cannot discern any other alternative meaning to this language.”); Allstate Indem. Co. v. Markley Chiropractic & Acupuncture, LLC, 41 Fla. L. Weekly D793, 2016 WL 1238533, at *4 (Fla. 2d DCA Mar. 30, 2016) (explaining that “Virtual Imaging did not dictate a form of notice” or require insurers to specifically state the word “Medicare”). Allstate’s policy thus places both providers and insured on notice of Allstate’s election to use the permissive Medicare fee schedules identified in section 627.736(5)(a)2. to limit reimbursements.” Allstate Ins. Co. v. Orthopedic Specialists, No. SC15-2298, at *8-9, (Fla. 2017).

Click here to read the full opinion.