In Florida, personal injury protection (PIP) coverage limits reimbursement of medical charges to 80% of “all reasonable expenses.” What is “reasonable” is generally determined by a statutory schedule of maximum charges. What happens when a medical provider charges less than the statutory fee schedule amount to maximize its reimbursement from an insurance company? Recently, the Florida Supreme Court answered that question and clarified how medical expenses should be reimbursed under the PIP Statute and applicable PIP policy, resolving the “billed amount” dispute affecting thousands of Florida state court cases.

Allstate Ins. Co. v. Revival Chiropractic, LLC,[1] stems from a certified question posed by the United States Court of Appeals for the Eleventh Circuit, focusing on whether an insurer can legally pay only 80% of a charge submitted by a medical provider, even if that amount falls below what would be reimbursable under the statutory schedule of maximum charges. At issue in this case was Allstate’s election to pay 80% of Revival’s charges, despite the charges equaling less than 80% of the fee schedule amount. Revival argued that Allstate was required to pay either 80% of the scheduled amount or 100% of the charge submitted.

The Court provided an in-depth statutory analysis of the PIP Statute and applied those provisions to the express language of Allstate’s insurance policy. In doing so, the Court concluded “the heart of the PIP Statute’s coverage requirements” contain the overarching mandate that insurers reimburse 80% of reasonable expenses for medically necessary services. The Court specifically noted that the permissive language of the PIP Statute, which states an insurer “may limit” payment or reimbursement, gives the insurer an optional limitation. Drawing on its previous ruling in MRI Associates of Tampa, Inc. v. State Farm Mutual Automobile Insurance Co.,[2] the Court went on to explain that insurers are not required to exclusively use the schedule of maximum charges for reimbursement, especially when a policy expressly authorizes other payment limitations.

After analyzing the statutory framework and Allstate’s policy provisions, the Court held that a ‘hybrid-payment methodology’ is permissible. This methodology allows insurers to pay either 80% of the fee schedule amount or 80% of the submitted charge, provided the policy gives notice of such limitations. However, the Court did recognize that certain policy language could require an exclusive election to pay the schedule of maximum charges, but such language was not present in Allstate’s policy at issue.

This Florida Supreme Court opinion provides clarity on the type of language needed in an insurance policy to allow an insurer to pay 80% of the charges submitted. Additionally, this ruling should help litigants resolve the numerous pending billed amount cases throughout the state of Florida.

[1] SC2022-0735, — So.3d —- 2024 WL 1776115 (Fla. Apr. 25, 2024).

[2] 334 So. 3d 577 (Fla. 2021).