Florida Supreme Court Rules on Billed Amount

Posted in Legal Alerts on April 29, 2024

On April 25, 2024, the Florida Supreme Court issued its decision in Allstate Insurance Company, et. al, v. Revival Chiropractic, LLC, SC2022-0735.    More than a year after oral argument, the Court finally and definitively ruled on “Billed Amount” concluding “…the provisions of both the statute and the policy support Allstate’s payment of 80% of the amount of the charges submitted.”  Id.  Although Revival made its way to the Florida Supreme Court by way of certified question posed by the United States Court of Appeal for the Eleventh Circuit, the Billed Amount issue has pervaded Florida state courts and PIP suits for well over half a decade.  As expressed by the Court, “the question for decision is whether the insurer here may pay 80% of a charge submitted by a provider even when that reimbursement amount is less than the amount that would be reimbursable under the limitations of the statutory schedule of maximum charges.”  In no uncertain terms, the Court found the Allstate policy expressly authorized such a payment and nothing in the PIP statute prevented payment in accordance with Allstate’s policy.    

Importantly, for the first time Florida Supreme Court squarely addresses the Billed Amount issue in Revival.   Although the Court previously considered “the interaction of the PIP statute’s foundational requirement that insurers pay 80% of ‘all reasonable expenses’ for medically necessary services with the statutory authorization for an insurer to pay 80% of expenses based on the statutory schedule…” in MRI Associates of Tampa, Inc. v. State Farm Mutual Automobile Insurance Co., 334 So. 3d 577 (Fla. 2021), the Eleventh Circuit found there was no clear controlling precedents on the issue.  As explained in Revival, the Eleventh Circuit reasoned that MRI Associates undermined but did not directly repudiate two decisions from Florida District Court of Appeal, Hands On Chiropractic PL v. GEICO General Insurance Co., 327 So. 3d 439 (Fla. 5th DCA 2021), and Geico Indemnity Co. v. Muransky Chiropractic P.A., 323 So. 3d 742 (Fla. 4th DCA 2021).  The Court in Revival addressed these points, holding Hands On and Muransky were superseded MRI Associates and not useful in their consideration of the issue presented.   

The Court begins its analysis with “the heart of the PIP statute’s coverage requirements”, that 627.736(1)(a) requires PIP insurers “reimburse eighty percent of reasonable expenses for medically necessary services.” Virtual Imaging, 141 So. 3d at 155.  The Court agreed that “Allstate correctly characterized this 80% of reasonable expenses requirement as the ‘overarching mandate’ of the PIP statute” which strong cut against the argument that an insurer must pay 100% of the amount of charges submitted.  The Court further reasoned that providers “may charge the insurer and injured party only a reasonable amount.” § 627.736(5)(a), Fla. Stat.  Thus, providers are in no position to argue that their self-determined charge is anything other than a reasonable amount.  

Despite the ruling in MRI Associates, Revival advanced a position that a fee schedule election created an exception to 627.736(1)(a)’s reasonableness mandate.   In rejecting Revival’s “distorted interpretive lens”, the Court re-affirmed if an insurer provides notice that it may use the schedule of maximum charges they will not thereby be precluded from paying 80% of reasonable charges. 334 So. 3d at 585. Revival makes clear, rather than an either or proposition (fee schedule or reasonableness), the statute’s permissive language allows an insurer to opt into a “hybrid-payment methodology.” Once again the Court reminds us, “‘[t]he schedule of maximum charges’ is not ‘an exclusive method’ of establishing reimbursement rates but ‘an optional method’ of limiting reimbursements that is available to insurers that give notice that they may use it and that it therefore ‘establishes a ceiling but not a floor,’”  MRI Assocs., 334 So. 3d at 585.  

Although Revival addresses a sole legal issue, its application will undoubtedly have a broader impact on Fee Schedule litigation.  To read the full opinion, click here.  If you would like to learn more about how this opinion may impact your litigation, please contact Melissa McDavitt