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Show Me the Money! The Aftermath of Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc

After working a long course through Florida’s appellate court system, the Florida Supreme Court finally had the last say in Geico v. Virtual Imaging Services, Inc a titan in the evolving world of Florida PIP law.

From a procedural aspect, the Florida Supreme Court agreed to hear the case on application from the Third District of Court Appeal which certified the case as one of great public importance; rightfully so. The issue presented before the Court was whether the Medicare fee schedules set forth in Fla. Stat. 627.736(5)(a) authorized an insurer to limit reimbursements to an insured without giving notice in the policy of the insurer’s election to utilize such fee schedules as the basis for calculating reimbursement. The answer…NO!

At the outset, it should be duly noted that the Court confined its holding to those policies issued after January 1, 2008 through July 1, 2012. In simplest form, the Supreme Court stated, “[T]he insurer was required to give notice to its insured by electing the permissive Medicare fee schedules in its policy before taking advantage of the Medicare fee schedule methodology to limit reimbursement.”Geico Gen. Ins. Co. v. Virtual Imaging Servs, Inc, 38 Fla. L. Weekly S517a (Fla. Supreme Court. July 3, 2013).

Prior to Virtual Imaging, Florida medical providers were grudgingly growing accustomed to having PIP insurers reduce their reasonable charges to 200% of the Medicare fee schedule; some fought it and some did not. County and Circuit Court judges initially dealt with the challenges, which lead to a patchwork of conflicting decisions through the State of Florida. The differences between the customary charges and the 200% rate ranged from a few dollars to hundreds of dollars in the case of MRI’s.

The Florida Supreme Court finally cleared the air and required that insurers must provide notice to their insureds’ of their election to reimbursement according to the Medicare fee schedules; what questions remain? First, does the holding require that non-compliant insurers pay old claims? Second, what about exhaustion of benefits?

The Supreme Court’s holding did not go so far as to say that insurers now had to reimburse on all inappropriately paid claims; but that’s not stopping us. The Court’s opinion would be meaningless if no remedial effect was afforded to give the opinion teeth in its bite. Therefore, there are potentially hundreds to thousands of dollars in old claims that providers could now be entitled to.

Here’s how it works. First, if you filed a PIP claim between January 1, 2008 and July 1, 2012, and your bill was paid according to the Medicare fee schedules, and it is discovered that the policy in existence at the time did not elect the use of those fee schedules and no subsequent notice was given to the insured, then that policy is not compliant with the Court’s ruling and the provider arguably is entitled to the difference between 80% of their reasonable rate and what was actually paid. In other words, if a cervical MRI was billed at $1,800.00 and the provider was paid $804.82 (200% of Medicare), then they ought to receive $635.18 because 80% of $1,800.00 is $1,440.00, less the previously made payment of $804.82.

Now… here’s the roadblock…exhaustion of benefits. Once PIP has paid its $10,000.00 limit and absent a showing of bad faith, judges routinely do not order insurers to pay above their statutory limits. The insurers cannot be said to have acted in bad faith when making fee schedule payments because there was no binding case law at the time. At least one judge ruled that an insurer is not required to reserve funds for claims reduced through an erroneous application of the fee schedules and is not thereafter liable for payment of the balance after exhaustion. See Gables Ins. Recovery, Inc. v. MGA Ins. Co., 20 Fla. L. Weekly Supp. 668b (Miami-Dade Cnty. November 26, 2012).

Exhaustion of benefits will continue to act as a barrier in pursuing old claims, but this is an area ripe for continued litigation and we can expect an onslaught of similar cases.

At Sibley Dolman Gipe Accident Injury Lawyers, PA we are actively fighting to enforce the Supreme Court’s ruling and get our trusted providers paid on old claims. We have already filed, in excess of 100 PIP-demands based solely on Virtual Imaging and will continue seeking additional claimants. If there are PIP benefits remaining, there is money to claim.

If you have a question as to whether you might be entitled to additional payment on an old PIP claim, filed between January 1, 2008 and July 1, 2012, please give us a call at: (727) 451-6900 and we will happy to answer your questions. The Sibley Dolman Gipe Accident Injury Lawyers, PA is your Florida PIP suit law firm.