On April 26, 2023, The Fourth District Court of Appeal of Florida issued a ruling which will have major implications on personal injury protection (PIP) litigation. InProgressive v. In House Diagnostic Services a/a/o Darryl Frazier, No. 4D21-2581, the 4th DCA ruled that the proper reimbursement rate for medical benefits when using the 2007 service year was the Medicare “participating physician fee schedule”. In 2021, the 4th DCA had ruled that when using the 2007 service year, a medical provider was required to use the higher 2007 “limiting charge,” which provides reimbursement of medical benefits at 15% higher than the participating rate. The 2021 ruling caused several offshoot issues involving the “budget neutral adjustment” and “outpatient prospective payment systems,” which has caused increased litigation. In overturning their prior ruling, they considered several additional arguments not addressed in the 2021 case. Primarily, they reasoned that the limiting charge “ is not a fee schedule at all, but rather is only the amount which a provider may directly bill an insured.” They further considered changes to the PIP statute from 2012, which included adding additional fee schedules but never mentioned the term “limiting charge.”
Based on the 2021 ruling, many carriers began addressing what has been coined the “limiting charge issue” and eventual offshoot arguments. This recent ruling by the 4th DCA will allow carriers to strongly oppose the limiting charge issue and other offshoot issues. However, a potential consequence may be increased litigation over exhaustion of benefits and gratuitous payments/bad faith exhaustion. Insurance companies should carefully consider how they are paying medical benefits and be mindful of cases where the limiting charge was paid and benefits have now been exhausted.
If you have any questions, please contact Phillip Jones, pjones@florida-law.com.