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State Farm Insurance Policy 9810A Deemed Ambiguous By Multiple Judges (Personal Injury Protection “PIP” Implications)

Spearheaded by Broward County Judge Lee, a trend has emerged in the Personal Injury Protection arena in the last couple of months. Judge Lee was the first judge to deem State Farm auto policy form 9810A ambiguous. So what does that mean?

As noted in other posts, Personal Injury Protection benefits and payments are controlled by the Florida No Fault Law (Fla. Stat. 637.736) and the insurance policy. When billing an insurance company the number that is billed for the procedure is irrelevant, unless that number is below the “Fee Schedule Amount”. The Fee Schedule is normally echoed in insurance policies to Florida Statute 627.736(5)(a) which states:


(a) A physician, hospital, clinic, or other person or institution lawfully rendering treatment . . .

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

a. For emergency transport and treatment by providers licensed under chapter 401, 200 percent of Medicare.

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

c. For emergency services and care as defined by s. 395.002 provided in a facility licensed under chapter 395 rendered by a physician or dentist, and related hospital inpatient services rendered by a physician or dentist, the usual and customary charges in the community.

d. For hospital inpatient services, other than emergency services and care, 200 percent of the Medicare Part A prospective payment applicable to the specific hospital providing the inpatient services.

e. For hospital outpatient services, other than emergency services and care, 200 percent of the Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services.

f. For all other medical services, supplies, and care, 200 percent of the allowable amount under:

(I) The participating physicians fee schedule of Medicare Part B, except as provided in sub-sub-subparagraphs (II) and (III).

(II) Medicare Part B, in the case of services, supplies, and care provided by ambulatory surgical centers and clinical laboratories.

(III) The Durable Medical Equipment Prosthetics/Orthotics and Supplies fee schedule of Medicare Part B, in the case of durable medical equipment.”

In order for an insurance company to reduce a bill to the “reasonable amount” as indicated by the fee schedule, they must properly elect the fee schedule in their insurance policy. This election would properly put the insurer on notice of how the payments were to be made by them. Therefore, justifying the price paid to the insurance company, as a premium each month. If an insurance company does not properly elect the fee schedule with proper notice in their policy, then they cannot use the fee schedule amounts and essentially are left to having to pay the billed amounts.

In PAIN AND INJURY RELIEF OF LAKE WORTH (a/a/o Evener Deronvil), vs. STATE FARM FIRE AND CASUALTY COMPANY, Judge Lee in Broward County ordered “ [f]or reasons set forth in this Court’s decision in the case of MR Services I, Inc. v. Allstate Ins. Co., 23 Fla. L. Weekly Supp. 776a (Broward Cty. Ct. 2015), this Court rejects State Farm’s argument that the OIR “approval” of its policy entitles it to claim the safe harbor provided in Florida Statute §627.736(5)(a)(5). In 2012, the Legislature amended Florida Statute §627.736(5)(a)(5) to provide that “a policy form approved by the office [Office of Insurance Regulation] satisfies this requirement,” i.e., that the “insurance policy includes a notice at the time of issuance or renewal that the insurer may limit payment pursuant to the fee schedule” (emphasis added). . . . [t]o properly harmonize all provisions of Florida Statute §627.736(5)(a) so that an insurer retains an option to actually use the “reasonableness” provisions of the statute if desired in lieu of the fee schedule provisions, this Court holds that it must be clear that the OIR is approving the language as an election to limit payment pursuant to the fee schedule. Because State Farm did not so demonstrate in its letter requesting approval to the OIR, and the OIR did not alternatively say so in its “approval” of the policy, the Court finds that Orthopedic Specialists still controls the outcome in this case.”

In THERAMED, LLC D/B/A THERAMED MEDICAL CLINICS A/A/O PETRINE STANLEY, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, (“STATE FARM”), a Duval County case stated “Just like in MR Services I, there is no authority here that the OIR made a determination that State Farm made a clear and unambiguous election by the mere incorporation of its “Sample Fee Schedule Endorsement” into State Farm’s 9810A policy. Therefore, OIR “approval” of Policy Form 9810A and State Farm’s incorporation of the OIR “sample form” are not dispositive of the Defendant’s motion or rise to the level of per se compliance with the requisite notice requirement of F.S. 627.736(5)(a)5.”

In FLORIDA EMERGENCY PHYSICIANS KANG & ASSOCIATES, M.D., P.A., as assignee of Jonathan Sias, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, in Orange County stated in part ”[t]he Court finds that State Farm’s insurance policy (Policy Form 9810A) adopts an unauthorized and unlawful “hybrid method” for calculating PIP benefits. In so doing, State Farm has failed to elect one statutory payment calculation method to the exclusion of the other. As explained in Virtual III, Orthopedic Specialists, University Community Hospital, Neurology Partners as well as other cases, State Farm is not allowed to utilize certain provisions from the “fact dependent” method and certain provisions from the “schedule of maximum charges” method, mix them together and create a hybrid method that leaves the insured and/or medical provider guessing as to how PIP benefits will be reimbursed; a decision that would rest solely at State Farm’s discretion and whim. Clearly this is the antithesis of the clear and unambiguous election of payment methodology mandated by the Florida Supreme Court in Virtual III.”

The court concluded by stating ”[b]ecause this Court finds that State Farm’s Policy Form 9810A does not clearly and unambiguously elect to limit reimbursement of PIP benefits pursuant to Fla. Stat. §627.736(5)(a)1, State Farm may not avail itself of the permissive payment methodology.”

So what does this mean for insured’s and their medical providers? While the case law is still only at the County Court level, it shows a pattern evolving regarding State Farm Policy 9810A. Meaning, right now in your jurisdiction if motions were brought to deem the policy ambiguous they could also see the same result. If the pattern continues and is brought up on appeal (most likely) to a District Court of Appeal and that court states the same as above the result would most likely be that State Farm would start settling all cases and demand letters with this policy form.

If your company or you personally have State Farm and have not had 100% of your billed amount paid by State Farm, you need to contact Sibley Dolman Gipe Accident Injury Lawyers, PA at 727-451-6900 or [email protected] and let us take a look at the file to ensure you were compensated properly.

Sibley Dolman Gipe Accident Injury Lawyers, PA
800 North Belcher Road
Clearwater, FL 33765