Insurers Able to Litigate Reasonableness of Charges in the Absence of Electing the Fee Schedule
In Progressive Select Insurance Company v. Emergency Physicians of Central Florida, LLP, Case No. 5D16-253 (Fla. 5th DCA 2016), the Fifth District took under consideration whether an insurer can continue to challenge the reasonableness of charges for medical services billed by a medical provider when the insurer did not properly elect to use the fee schedule limitation in its insurance policies.
Florida Statute Section 627.736(5)(a)(2) permits insurers to limit reimbursements for billed services to eighty percent of 200 percent of the allowable amount under the Medicare fee schedule. Section 5(a)(1) sets out the parameters for calculating the amount for which medical providers can bill for their services. The services billed by medical providers must be “reasonable” as determined by usual and customary charges, reimbursement levels in the community and various federal and state medical fee schedules applicable to automobile and other insurance coverages.
The Fifth District noted that despite the Florida Supreme Court’s ruling in Geico v. Virtual Imaging Services, 141 So.3d 147 (Fla. 2013), which requires insurers to provide notice to its policyholders when there is an intention to limit reimbursements for services based on the Medicare fee schedule, Progressive’s failure to properly elect the fee schedule did not bar it from challenging the reasonableness of the medical provider’s bills. In making this ruling, the Fifth District found that precluding an insurer from being able to challenge reasonableness constituted a “violation of clearly established principles of law resulting in a miscarriage of justice.”
This decision is binding on all jurisdictions per the Florida Supreme Court’s decision in Pardo v. State, 596 So.2d 665 (Fla. 1992), which requires trial courts to follow the holdings of higher courts, including the District Courts of Appeal.