MRI Associates of Tampa, Inc., etc. v. State Farm Mutual Automobile Insurance Company

Supreme Court of Florida
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No. SC18-1390
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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
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

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