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Court Rules Against Insurer In 'PIP' Payment Dispute

Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

Pointing to “numerous conflicting decisions” by lower courts, a divided state appeals court ruled Friday against Progressive Select Insurance Co. in a dispute about how much should be paid to a hospital for treating a man injured in an auto accident.

But while a panel of the 5th District Court of Appeal sided with Florida Hospital in the Orange County case, it also asked the state Supreme Court to take up the issue — a move known as certifying the case to the Supreme Court.

The case dealt with calculation of payments under the personal-injury protection auto policy of Progressive customer Jonathan Parent, who was injured in an auto accident. Parent’s policy had a $1,000 deductible, and his total hospital charges were $2,781, according to Friday’s ruling.

In seeking payment from the insurer, the hospital first subtracted the $1,000 deductible and then calculated the amount owed using a formula in the state’s so-called PIP law. The hospital billed the insurer for $1,068. But Progressive used a different method that first applied part of the formula to reduce the overall $2,781 charge. The insurer then subtracted Parent’s $1,000 deductible from the reduced amount, made another calculation under the formula and said it owed $868 to the hospital — $200 less than what the hospital billed.

The crux of the dispute centered on whether the deductible should be subtracted from the overall charges or from the reduced amount.

Friday’s 17-page majority opinion said it should be applied to the overall charges, effectively forcing Progressive to pay more.

“Interpreting the pertinent statutory provisions in a manner that supports the methodology urged by Progressive and the dissent would not further the principle of providing broad PIP coverage to the insured,” said the opinion, written by Judge Thomas Sawaya and joined by Judge James Edwards. “Rather, as established by the calculation made by Progressive in its benefits payment …  that interpretation would allow the insurer to pay less in benefits than would otherwise be due.”

Judge William Palmer, in a dissent, agreed that the Supreme Court should take up the issue and said the majority opinion’s interpretation of state law could lead to a deductible being applied “to a charge which is unreasonably high and thus not covered by PIP.”