Case Title: MRI Associates of Tampa, Inc. v. State Farm Mutual Automobile Insurance Co.

Citation: 

Docket Number: SC18-1390

State: florida

Court: Florida Supreme Court

Date: 2021-12-09T00:00:00Z

Document:
Supreme Court of Florida 
 
____________ 
 
No. SC18-1390 
____________ 
 
MRI ASSOCIATES OF TAMPA, INC., etc., 
Petitioner, 
 
vs. 
 
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, 
Respondent. 
 
December 9, 2021 
 
PER CURIAM. 
 
 
In this case we consider whether the provisions of a personal 
injury protection (PIP) insurance policy permit the insurer to limit 
reimbursement payments in accordance with a statutory schedule 
of maximum charges.  We accepted jurisdiction to review State 
Farm Mutual Automobile Insurance Co. v. MRI Associates of Tampa, 
Inc., 252 So. 3d 773 (Fla. 2d DCA 2018), which certified a question 
of great public importance related to its holding that State Farm’s 
policy provisions permitted the insurer to use the schedule of 
maximum charges even though the policy also refers to the use of 
 
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other statutory factors for determining reasonable charges.  See art. 
V, § 3(b)(4), Fla. Const.  We agree with the Second District Court of 
Appeal that the PIP policy issued by State Farm was effective to 
authorize the use of the schedule of maximum charges under the 
relevant provisions of section 627.736(5), Florida Statutes (2013). 
This is the third time in the last decade that we have 
considered a case in which a medical services provider, as the 
assignee of an insured’s PIP policy benefits, challenged an insurer’s 
use of the PIP statutory schedule of maximum charges.  In Geico 
General Insurance Co. v. Virtual Imaging Services, Inc., 141 So. 3d 
147 (Fla. 2013), we interpreted amendments to the PIP statute that 
became effective in 2008 authorizing the use of the schedule of 
maximum charges.  We held that under that version of the PIP 
statute “a PIP insurer cannot take advantage of the Medicare fee 
schedules to limit reimbursements without notifying its insured by 
electing those fee schedules in its policy.”  Id. at 160.  
Subsequently, in Allstate Insurance Co. v. Orthopedic Specialists, 
212 So. 3d 973, 975 (Fla. 2017)—applying the same statutory 
provisions—we upheld the sufficiency of a policy notice providing 
that PIP payments “shall be subject to any and all limitations, 
 
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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.”  In the case now on review, we consider the sufficiency 
of a policy notice governed by the terms of a statutory notice 
provision that became effective in 2012. 
In explaining our decision, we begin with a review of the 
pertinent statutory provisions followed by an examination of the 
relevant terms of the PIP policy.  We then briefly consider the 
proceedings below and the decision of the district court, including 
the specific question certified.  After a summary of arguments 
presented by petitioner MRI Associates challenging that decision, 
along with opposing argument presented by respondent State Farm, 
we explain why the policy provisions clearly and unambiguously 
authorize the use of the statutory schedule of maximum charges in 
accord with the requirements of the statute. 
I. 
Subject to certain conditions and limitations, section 
627.736(1)(a) provides generally that PIP medical benefits must 
cover “[e]ighty percent of all reasonable expenses for medically 
 
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necessary medical, surgical, X-ray, dental, and rehabilitative 
services.”  Section 627.736(5) contains detailed provisions regarding 
“[c]harges for treatment of injured persons.”  Subsection (5)(a) 
begins with the statement that medical providers “rendering 
treatment to an injured person for a bodily injury covered by 
personal injury protection insurance may charge the insurer and 
injured party only a reasonable amount pursuant to this section for 
the services and supplies rendered.”  Following this broad 
statement, subsection (5)(a) contains two major elements.  The first 
element is centered on an enumeration of various factors that may 
be considered in determining the reasonableness of charges.  The 
second element sets forth the schedule of maximum charges that 
may be used to limit reimbursement and provisions related to the 
application of that schedule. 
The first major element of subsection (5)(a) begins with a 
statement that reasonable charges “may not exceed the amount the 
[provider] customarily charges for like services or supplies.”  
Subsection (5)(a) then sets forth the following provision regarding 
factors that may be used in determining reasonable charges: 
 
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In determining whether a charge for a particular service, 
treatment, or otherwise is reasonable, consideration may 
be given to evidence of usual and customary charges and 
payments accepted by the provider involved in the 
dispute, reimbursement levels in the community and 
various federal and state medical fee schedules 
applicable to motor vehicle and other insurance 
coverages, and other information relevant to the 
reasonableness of the reimbursement for the service, 
treatment, or supply. 
 
This provision is followed by section 627.736(5)(a)1., which 
begins the second major element of the subsection and is central to 
the dispute in this case.  Under this provision, “[t]he insurer may 
limit reimbursement to 80 percent of [the listed] schedule of maximum 
charges” set forth in subsection (5)(a)1.a.-f.  (Emphasis added.)  
Provisions governing the application of the schedule of maximum 
charges are detailed in subsection (5)(a)2.-5.  Of particular 
significance, subsection (5)(a)5. requires that an insurer provide 
notice of its election to use the schedule of maximum charges:  
Effective July 1, 2012, an insurer may limit payment as 
authorized by this paragraph only if the insurance policy 
includes a notice at the time of issuance or renewal that 
the insurer may limit payment pursuant to the schedule of 
charges specified in this paragraph.  
 
(Emphasis added.) 
 
 
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II. 
State Farm’s PIP policy recognizes the statutory obligation to 
pay reasonable charges: “We will pay in accordance with the No-
Fault Act properly billed and documented reasonable charges for 
bodily injury to an insured caused by an accident resulting from the 
ownership, maintenance, or use of a motor vehicle . . . .”  The policy 
includes a definition of reasonable charges that refers specifically to 
the schedule of maximum charges: 
Reasonable Charge, which includes reasonable expense, 
means an amount determined by us to be reasonable in 
accordance with the No-Fault Act, considering one or 
more of the following: 
 
1. usual and customary charges; 
2. payments accepted by the provider; 
3. reimbursement levels in the community; 
4. various federal and state medical fee schedules 
applicable to motor vehicle and other insurance 
coverages; 
5. the schedule of maximum charges in the No-Fault Act[;] 
6. other information relevant to the reasonableness of the 
charge for the service, treatment, or supply; or 
7. Medicare coding policies and payment methodologies 
of the federal Centers for Medicare and Medicaid 
Services, including applicable modifiers, if the coding 
policy or payment methodology does not constitute a 
utilization limit. 
 
(Emphasis added.)  The policy contains an additional provision 
referring to the schedule of maximum charges:  
 
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We will limit payment of Medical Expenses described in 
the Insuring Agreement of this policy’s No-Fault Coverage 
to 80% of a properly billed and documented reasonable 
charge, but in no event will we pay more than 80% of the 
following No-Fault Act “schedule of maximum charges” 
including the use of Medicare coding policies and 
payment methodologies of the federal Centers for 
Medicare and Medicaid Services, including applicable 
modifiers: [reciting statutory schedule]. 
 
(Emphasis added.) 
 
III. 
In a dispute over the amount of payments due for MRIs arising 
from nineteen individual PIP claims, a final judgment adverse to 
State Farm was entered by the trial court on “the issue of whether 
State Farm’s policy ‘lawfully invokes the schedule of maximum 
charges . . . set forth in section 627.736(5)(a)(1).’ ”  MRI Assocs., 
252 So. 3d at 774 n.1.  On appeal, the Second District addressed 
petitioner’s argument “that State Farm must elect either the 
reasonable charge method of calculation under section 
627.736(5)(a) or the schedule of maximum charges method of 
calculation under section 627.736(5)(a)(1) and that because its 
policy includes both, State Farm relies on an ‘unlawful hybrid 
method’ of reimbursement calculation.”  Id. at 775-76.  The court 
also considered petitioner’s claim that State Farm’s attempt to use 
 
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this “unlawful” method requires that it “use the reasonable charge 
method as outlined in the definitions section of its policy and 
section 627.736(5)(a).”  Id. at 776. 
Based on the policy and statutory provisions that we have 
already set forth above, the Second District recognized that “[t]he 
State Farm policy tracks the method of reimbursement calculation 
outlined in section 627.736(5)(a) and the limitation set forth in 
section 627.736(5)(a)(1).”  Id. at 775 (footnote omitted).  After 
discussing our decisions in Virtual Imaging and Orthopedic 
Specialists, the district court pointed out that neither decision 
“applies to policies created after the 2012 amendment to the PIP 
statute, which the State Farm policy at issue in this case was.”  Id. 
at 777.  But in refuting the challenge to the legality of State Farm’s 
policy provisions, the district court relied on our statement in 
Orthopedic Specialists “that the insurer’s ‘PIP policy cannot contain 
a statement that the insurer will not pay eighty percent of 
reasonable charges because no insurer can disclaim the PIP 
statute’s reasonable medical expenses coverage mandate.’ ”  Id. 
(quoting Orthopedic Specialists, 212 So. 3d at 977).  And in its 
discussion of our decision in Virtual Imaging, the district court 
 
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focused on the manner in which the statute we interpreted there 
was organized: “By placing the reasonable charge method and the 
fee schedules limitation in two separate but coequal subsections of 
627.736(5)(a)”—that is, subsections (5)(a)1. and (5)(a)2.—“the 
legislature created two distinct reimbursement calculation 
methodologies.”  Id. at 776. 
Relying on that understanding, the district court pointed out 
that “[i]n 2012 the legislature substantially amended section 
627.736(5), setting forth the schedule of maximum charges 
limitation as a subsection of the reasonable charge calculation 
methodology”—by moving the provision enumerating various factors 
for determining reasonableness (characterized by the district court 
as the reasonable charge method) from subsection (5)(a)1. to 
subsection (5)(a) and moving the schedule of maximum charges 
from subsection (5)(a)2. to subsection (5)(a)1.  Id. at 777-78.  From 
this reorganization of the statute, the district court concluded “that 
there are no longer two mutually exclusive methodologies for 
calculating the reimbursement payment owed by the insurer.”  Id. 
at 778. 
 
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Reasoning that “an insurer may not disclaim the fact-
dependent calculation”—that is, use of the factors for determining 
reasonableness enumerated in subsection (5)(a)—but “it may elect 
to limit its payment in accordance with the schedule of maximum 
charges under subsection (5)(a)(1)(a)-(f),” the district court rejected 
the “argument that State Farm’s policy contains an ‘unlawful hybrid 
method’ of reimbursement calculation and is therefore 
impermissibly vague.”  Id.  The district court thus concluded that 
“State Farm’s inclusion of the statutory factors in its definition of 
reasonable charges tracks the PIP statute and is not inconsistent 
with the policy language limiting reimbursement to the schedule of 
maximum charges.”  Id.   
The district court completed its analysis by focusing on the 
reference in the policy to the schedule of maximum charges:  
State Farm’s policy clearly and unambiguously states 
that “in no event will we pay more than 80% of the . . . 
No-Fault Act ‘schedule of maximum charges.’ ”  The policy 
also includes language virtually identical to that of 
section 627.736(5)(a)(1)(a)-(f), listing verbatim all of the 
applicable fee schedules that it will use to limit 
reimbursement. 
 
Id.  And the district court compared this policy language to the 
policy provision we approved in Orthopedic Specialists: “State 
 
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Farm’s policy language is even more clear and unambiguous than 
that at issue in Orthopedic Specialists, which ‘state[d] that “[a]ny 
amounts payable” for medical expense reimbursements “shall be 
subject to any and all limitations, authorized by section 
627.736, . . . including . . . all fee schedules.” ’ ”  Id. (alterations in 
original) (quoting Orthopedic Specialists, 212 So. 3d at 977). 
Finally, the district court certified the following question of 
great public importance: 
DOES THE 2013 PIP STATUTE AS AMENDED PERMIT 
AN INSURER TO CONDUCT A FACT-DEPENDENT 
CALCULATION OF REASONABLE CHARGES UNDER 
SECTION 627.736(5)(a) WHILE ALLOWING THE 
INSURER TO LIMIT ITS PAYMENT IN ACCORDANCE 
WITH THE SCHEDULE OF MAXIMUM CHARGES UNDER 
SECTION 627.736(5)(a)(1)? 
 
Id. at 778-79. 
IV. 
Unremarkably, the arguments the parties present to us center 
on the analysis adopted by the district court.  MRI Associates 
contends—as it did in the district court—that section 627.736(5)(a) 
contains two mutually exclusive methods of calculating the amount 
of reasonable reimbursement—namely, (1) the method set forth in 
subsection (5)(a)’s enumeration of factors for determining 
 
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reasonableness, and (2) the maximum schedule of charges set forth 
in subsection (5)(a)1.  MRI Associates further contends that State 
Farm’s election to use the limitations of the schedule of maximum 
charges in subsection (5)(a)1. was improper because the policy also 
referred to the use of factors enumerated in subsection (5)(a)—
described in the certified question as “a fact-dependent calculation 
of reasonable charges.”  According to MRI Associates, the policy’s 
adoption of an improper “hybrid-payment methodology” was 
nugatory and the use by State Farm of the schedule of maximum 
charges is therefore precluded.  Relying on our decision in 
Orthopedic Specialists, State Farm counters by arguing that there is 
no basis for condemning its policy for adopting an illegal hybrid 
payment methodology.  State Farm emphasizes that the schedule of 
maximum charges is designed to operate as a limitation on 
reimbursement—imposing a cap on the amount of payments 
otherwise payable—rather than a provision that must operate in 
isolation from the other provisions of the statute related to the 
determination of reasonableness.1 
 
 
1.  The parties present other arguments that are either 
without merit or need not be addressed to resolve the issue 
 
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V. 
“Because the question presented requires this Court to 
interpret provisions of the Florida Motor Vehicle No-Fault Law—
specifically, the PIP statute—as well as to interpret the insurance 
policy, our standard of review is de novo.”  Virtual Imaging, 141 So. 
3d at 152.   
When “interpreting an insurance contract,” this Court is 
“bound by the plain meaning of the contract’s text.”  State Farm 
Mut. Auto. Ins. Co. v. Menendez, 70 So. 3d 566, 569 (Fla. 2011).  We 
are similarly bound by the plain meaning of the text of the 
provisions of the PIP statute.  We thus are guided by “what Justice 
Thomas has described as the ‘one, cardinal canon [of construction] 
before all others’—that is, we ‘presume that a legislature says in a 
statute what it means and means in a statute what it says there.’ ”  
Page v. Deutsche Bank Tr. Co. Americas, 308 So. 3d 953, 958 (Fla. 
2020) (quoting Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 
253-54 (1992)).  On the question presented here—which ultimately 
 
presented by this case.  We will not further comment on those 
arguments. 
 
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turns on the interpretation of the PIP statute—we conclude that the 
meaning of the governing text is clear beyond any doubt. 
We have never held that the “reasonable charge method” and 
the “schedule of maximum charges” are mutually exclusive 
methods for determining the reasonableness of reimbursements.  
Neither Virtual Imaging nor Orthopedic Specialists contains any 
such holding.  Rather than being dictated by these precedents, the 
controversy in this case is readily answered by the statutory text, 
which contains provisions that were not applicable in those cases 
and that wholly undermine the notion that section 627.736(5) 
establishes mutually exclusive reimbursement methodologies. 
The issue presented in Virtual Imaging was whether the 
insurer was required to include a specific election in its policy to 
use the limitations of the statutory maximum fee schedules.  Virtual 
Imaging, 141 So. 3d at 150.  The Court decided that such an 
election in the policy was required.  Id.  We reasoned that “when the 
plain language of the PIP statute affords insurers two different 
mechanisms for calculating reimbursements, the insurer must 
clearly and unambiguously elect the permissive payment 
methodology in order to rely on it.”  Id. at 158 (citing Kingsway 
 
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Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63, 67-68 (Fla. 4th 
DCA 2011)).  Because the necessary specific election was not 
contained in the policy at issue, the Court had no basis for deciding 
how a policy containing such an election would be applied.  
Specifically, the Court had no reason to consider and decide 
whether an election of the limitations of the schedule of maximum 
charges would preclude an insurer from relying on the other 
statutory factors for determining reasonableness.  Our 
characterization in Virtual Imaging of the PIP statute as “afford[ing] 
insurers two different mechanisms for calculating reimbursements” 
by no means establishes that those mechanisms are mutually 
exclusive.   
Orthopedic Specialists addressed the sufficiency of the policy 
notice provided by the insurer of its election to use statutory fee 
schedule limitations.  Orthopedic Specialists, 212 So. 3d at 974.  As 
in Virtual Imaging, we recognized that “when the plain language of 
the PIP statute affords insurers two different mechanisms for 
calculating reimbursements, the insurer must clearly and 
unambiguously elect the permissive payment methodology in order 
to rely on it.”  Id. at 977 (quoting Virtual Imaging, 141 So. 3d at 
 
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158).  The focus of our analysis was whether the policy notice was 
ambiguous—a question not at issue in the case now on review—and 
therefore should be interpreted against the insurer.  Having decided 
that the broad notice contained in the policy was sufficient and that 
the insurer was therefore entitled to rely on the fee schedule 
limitations, we were not called on to decide how the policy would 
otherwise be applied.  
Of course, here we are addressing a version of the statute that 
we have not previously interpreted.  Although we are not persuaded 
that the reorganization of the statute relied on by the Second 
District is a sound basis for determining the issue presented in this 
case, we do believe that the text of the notice provision that became 
effective in 2012 supports the result reached by the district court.  
That portion of the statute provides: 
Effective July 1, 2012, an insurer may limit payment as 
authorized by this paragraph only if the insurance policy 
includes a notice at the time of issuance or renewal that 
the insurer may limit payment pursuant to the schedule of 
charges specified in this paragraph. 
 
§ 627.736(5)(a)5., Fla. Stat. (emphasis added). 
This notice provision—providing that “an insurer may limit 
payment” if the policy contains notice that “the insurer may limit 
 
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payment pursuant to the schedule of charges”—cannot be 
reconciled with the argument that an election to use the limitations 
of the schedule of maximum charges precludes an insurer’s reliance 
on the other statutory factors for determining the reasonableness of 
reimbursements.  The permissive nature of the statutory notice 
language does not in any way signal that the insurer will be so 
constrained by such an election.  On the contrary, the language 
signals that the insurer is given an option that may be used in 
addition to other options that are authorized.  This notice language 
echoes the underlying authorization to limit reimbursements under 
the schedule of maximum charges: “The insurer may limit 
reimbursement to 80 percent of the [listed] schedule of maximum 
charges.”  § 627.736(5)(a)1., Fla. Stat. (emphasis added).  Given the 
full context of these provisions, a reasonable reading of the 
statutory text requires that reimbursement limitations based on the 
schedule of maximum charges be understood—as State Farm 
contends—simply as an optional method of capping 
reimbursements rather than an exclusive method for determining 
reimbursement rates.  By its very nature, a limitation based on a 
schedule of maximum charges establishes a ceiling but not a floor. 
 
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We rephrase the certified question as follows: 
Does section 627.736(5)(a), Florida Statutes (2013), 
preclude an insurer that elects to limit PIP 
reimbursements based on the schedule of maximum 
charges from also using the separate statutory factors for 
determining the reasonableness of charges? 
 
We answer this question in the negative. 
VI. 
We therefore reject the argument that State Farm has used a 
prohibited hybrid-payment methodology, and we approve the result 
reached by the Second District.  No basis has been presented for 
invalidating State Farm’s election of the limitations of the schedule 
of maximum charges. 
It is so ordered. 
CANADY, C.J., and POLSTON, LABARGA, LAWSON, MUÑIZ, and 
COURIEL, JJ., concur. 
GROSSHANS, J., did not participate. 
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION 
AND, IF FILED, DETERMINED. 
 
Application for Review of the Decision of the District Court of Appeal 
Direct Conflict of Decisions/Certified Great Public Importance 
 
 
Second District – Case No. 2D16-4036 
 
 
(Hillsborough County) 
 
 
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David M. Caldevilla of de la Parte & Gilbert, P.A., Tampa, Florida; 
Kristin A. Norse and Stuart C. Markman of Kynes, Markman & 
Felman, P.A., Tampa, Florida; Craig E. Rothburd of Craig E. 
Rothburd, P.A., Tampa, Florida; Scott R. Jeeves of Jeeves Law 
Group, P.A., St. Petersburg, Florida; and John V. Orrick, Jr. of Law 
Offices of John V. Orrick, P.L., Tampa, Florida, 
 
 
for Petitioner 
 
Marcy Levine Aldrich and Nancy A. Copperthwaite of Akerman LLP, 
Miami, Florida; Chris W. Altenbernd of Banker Lopez Gassler P.A., 
Tampa, Florida; and D. Matthew Allen of Carlton Fields Jorden Burt 
P.A., Tampa, Florida, 
 
 
for Respondent 
 
Mac S. Phillips of Phillips Tadros, P.A., Fort Lauderdale, Florida; 
Kenneth J. Dorchak of Buchalter, Hoffman & Dorchak, North 
Miami, Florida; Stuart L. Koenigsberg of Stuart L. Koenigsberg, P.A. 
Miami, Florida; and Melisa L. Coyle of The Coyle Law Firm, P.A., 
Miami Beach, Florida, 
 
 
for Amicus Curiae Floridians for Fair Insurance, Inc. 
 
Edward H. Zebersky of Zebersky Payne Shaw Lewenz, LLP, Fort 
Lauderdale, Florida; and Lawrence Kopelman of Lawrence M. 
Kopelman, P.A., Plantation, Florida, 
 
 
for Amicus Curiae Florida Medical Association 
 
Maria Elena Abate of Colodny Fass, Sunrise, Florida, and 
L. Michael Billmeier, Jr. of Colodny Fass, Tallahassee, Florida, 
 
for Amici Curiae American Property Casualty Insurance 
Association and Personal Insurance Federation of Florida