What constitutes proper notice of PIP reduction methodology pending before the Florida Supreme Court.

January 26, 2017

Allstate Ins. Co. vs. Orthopedic Specialists, No. SC15-2298, appeal from Orthopedic Specialists v. Allstate Ins. Co., 177 So. 3d 19 (Fla. 4th DCA 2015)

 The Florida Supreme Court held that Allstate's insurance policy provided legally sufficient notice of Allstate's election to use the Permissive Medicare Fee Schedule.

 The insurer’s automobile policy contained the following clause regarding its PIP coverage: “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.” The Fourth District Court of Appeal held that this language failed to provide unequivocal notice to the insured that payments would be limited to the Medicare fee schedules because the mere words “subject to” purport to leave discretion to the insurer to select the method of payment calculation from among any reasonably permitted by the statute.

 This decision expressly conflicts with Allstate Fire & Casualty Insurance v. Stand-Up MRI of Tallahassee, P.A., 2015 Fla. App. LEXIS 3867, 40 Fla. L. Weekly D693 (Fla. 1st DCA Mar. 18, 2015), which held that this same policy language provided sufficient notice that the insurer would rely on Medicare fee schedules, with particular emphasis on the word “shall” in the clause. Both cases are now before the Supreme Court due to the conflict, with the appeal from the First DCA case (SC15-962) stayed pending the outcome of the other (SC15-2298).

 The Supreme Court found that when the language "shall be subject to" all limitations was read in context with the entire policy, it was clear that payments were subject to all limitations.

 It is expected that this decision for Allstate will impact thousands of cases through the state.