80% of the billed amount can be

Personal Injury Protection (PIP) insurance reimbursement rates generate significant litigation in Florida’s no-fault system, particularly regarding how insurers calculate the 80% reimbursement requirement. The Florida Second District Court of Appeal’s decision in Progressive American Insurance Co. v Back on Track, LLC addresses a critical question: when insurance policies reference statutory schedules of maximum charges, must insurers pay 80% of those maximum charges even when providers bill below that threshold?

This case involves competing interpretations of Florida’s PIP statute and insurance policy language. Healthcare providers argued that once an insurer’s policy invokes the statutory schedule of maximum charges, the insurer must pay either 80% of the schedule amount or 100% of the billed amount if the bill falls below 80% of the schedule—whichever is greater. This interpretation would create a floor below which reimbursement could not fall, effectively guaranteeing minimum payment percentages regardless of what providers actually charge.

Progressive challenged this interpretation, arguing that the schedule of maximum charges functions merely as a ceiling—a cap on reimbursement—rather than establishing minimum payment obligations. Under Progressive’s view, insurers satisfy their PIP obligations by paying 80% of reasonable charges, with the schedule serving only to limit maximum reimbursement amounts. The Second District’s analysis would have implications for thousands of PIP claims throughout Florida.

Case Background

Back on Track, LLC provided medical treatment to Ophelia Bailey following a motor vehicle accident covered by Progressive American Insurance Company’s PIP policy. The policy contained language permitting Progressive to use Florida’s statutory schedule of maximum charges when determining reimbursement amounts. Back on Track submitted bills for treatment rendered, and Progressive paid 80% of the amounts billed rather than 80% of the amounts set forth in the statutory schedule.

Back on Track filed suit arguing that Progressive’s payment methodology violated both the insurance policy and Florida PIP statutes. The healthcare provider relied on Geico Indemnity Co. v. Accident & Injury Clinic, Inc., a Fifth District Court of Appeal decision that had established what providers considered the proper payment methodology. Under that decision, when bills fell below 80% of the schedule maximum, insurers were required to pay 100% of the billed amount.

The trial court agreed with Back on Track and entered an order denying Progressive’s motion and granting the provider’s motion. The court concluded that Progressive was required to pay either 80% of the applicable fee schedule amount or 100% of charges billed below that threshold. Progressive appealed, presenting the Second District with an opportunity to address this contentious reimbursement issue and potentially create a district split with the Fifth District.

Jason Tenenbaum’s Analysis

PROGRESSIVE AMERICAN INSURANCE CO. vs BACK ON TRACK, L L C, A/A/O OPHELIA BAILEY, No. 2D21-541 (Fla 2d DCA 2022)

(1) “The court entered an order denying Progressive’s motion and granting BOT’s motion; the order states that the ruling was based on Geico Indemnity Co. v. Accident & Injury Clinic, Inc. ex rel. Irizarry, 290 So. 3d 980 (Fla. 5th DCA 2019), and reflects the court’s conclusion that Progressive “was required to pay 80% of the applicable fee schedule amount for charges … or to pay the charge at 100% of the full amount billed for those charges billed below 80% of the schedule of maximum charges.”

(2) “Summarizing, these cases establish that a PIP insurer whose policy includes a notice that it may use the statutory schedule of maximum charges to determine provider reimbursements must (1) pay 100 percent of the amount billed if a provider charges less than 80 percent of the amount allowed under the schedule of maximum charges and (2) pay 80 percent of the allowable amount under the applicable schedule of maximum charges for charges that exceed 80 percent of 100 percent of the allowable amount calculated under the applicable schedule of maximum charges. As we next explain, we disagree with this proposition”

(3) “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.”

(4) “Progressive’s payment of BOT’s charges at 80 percent of the amount that BOT itself chose to bill unquestionably satisfied Progressive’s obligation under the coverage mandate—that is, to reimburse BOT for 80 percent of the reasonable expenses BOT incurred in treating Progressive’s insured, Ms. Bailey.”

Legal Significance

The Second District’s decision resolves a fundamental question about how statutory fee schedules interact with percentage-based reimbursement requirements. The court rejected the provider-friendly interpretation that would have transformed maximum charge schedules into minimum payment guarantees. Instead, the court adopted a textual interpretation focusing on the statutory language establishing PIP’s core reimbursement obligation: 80% of reasonable expenses incurred.

The decision emphasizes that fee schedules serve a limiting function, not a floor-setting function. By their nature, “maximum charges” establish ceilings—upper limits beyond which reimbursement cannot go. Nothing in the statutory text suggests these maximums also establish minimum payment obligations when providers bill below the schedule amounts. The court found that reading floor requirements into ceiling provisions would contradict basic principles of statutory interpretation.

The practical import of this interpretation favors insurers by allowing them to pay 80% of billed amounts when those amounts fall below fee schedule maximums. This prevents providers from manipulating the system by billing below the 80% threshold to trigger 100% payment requirements. The decision recognizes that providers control their billing amounts and should not be able to leverage billing strategies to circumvent the 80% reimbursement limitation.

However, the decision creates a district split with the Fifth District’s ruling in Geico Indemnity Co. v. Accident & Injury Clinic. When Florida’s district courts of appeal reach conflicting conclusions on questions of law, the Florida Supreme Court may accept jurisdiction to resolve the conflict. Until the Supreme Court addresses this split, uncertainty persists about the proper reimbursement methodology, with outcomes potentially depending on geographic location and which district court has jurisdiction over appeals.

Practical Implications

For healthcare providers in Florida’s Second District, this decision requires adjustment of billing and collection expectations. Providers cannot rely on fee schedule amounts as guaranteed reimbursement floors when billing below 80% of those schedules. Instead, providers should anticipate receiving 80% of billed amounts regardless of where those amounts fall relative to statutory maximums.

Providers may respond by adjusting billing practices to charge closer to fee schedule maximums, potentially eliminating the scenario where bills fall below 80% of schedule amounts. This strategic response would reduce the practical impact of the decision while potentially increasing overall healthcare costs in Florida’s PIP system. However, providers must balance billing strategy against competitive pressures and the risk of triggering medical necessity or reasonableness challenges when billing at maximum levels.

For insurers operating in the Second District, the decision provides favorable guidance on reimbursement calculations. Insurers can implement payment systems that apply the 80% reimbursement percentage to actual billed charges without complex comparisons to fee schedule amounts. This simplifies claims processing and reduces administrative costs while potentially decreasing overall PIP payouts.

However, insurers operating statewide must contend with the district split. Different payment methodologies may be required depending on where litigation arises. Insurers should track which courts have jurisdiction over specific claims and adjust payment calculations accordingly. This geographic variation in reimbursement standards creates administrative challenges for multi-district and statewide operations.

Both providers and insurers should monitor whether the Florida Supreme Court accepts jurisdiction to resolve the conflict. A Supreme Court decision would establish uniform statewide standards, eliminating geographic variation and providing certainty for billing and payment practices. Until such resolution occurs, practitioners must navigate the uncertainty created by conflicting appellate precedents.

The decision also counsels careful attention to insurance policy language. The court’s analysis focused heavily on how the specific policy language incorporated the statutory schedule. Insurers drafting policy language should consider whether clearly stating that schedules serve as ceilings only would strengthen their position. Providers negotiating assignment of benefits should examine policy language to understand applicable payment methodologies.

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