In an Orange County case watched by the insurance industry and health-care providers, the Florida Supreme Court on Friday unanimously ruled against an insurer in a dispute about payments in the state’s personal-injury protection auto insurance system.
The Supreme Court upheld a 5th District Court of Appeal ruling in favor of Florida Hospital and against Progressive Select Insurance Co.
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 court documents.
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. T
he 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.
Florida Hospital filed a lawsuit that focused on whether the deductible should be subtracted from the overall charges or from the reduced amount.
The Supreme Court agreed with the 5th District Court of Appeal that the deductible should be applied to the overall charges, effectively forcing Progressive to pay more.
“A plain reading of the statutory provisions makes clear that the deductible must be subtracted from the provider’s charges before the reimbursement limitation is applied,” Chief Justice Charles Canady wrote in the 15-page opinion.