25 Fla. L. Weekly D2675cNOT FINAL VERSION OF OPINION
Subsequent Changes at 26 Fla. L. Weekly D1194c
Insurance — Personal injury protection — Where health care provider who had been assigned PIP benefits submitted bills for treatment of insured to PIP insurer, and insurer paid only the amount it deemed reasonable according to usual and customary charges in the community, insurer was not required to obtain the report of a physician stating that the charges were excessive as condition precedent to defending health care provider’s suit for past due bills — There is no requirement that an insurer first obtain a report from a physician licensed under the same chapter as the insured’s treating physician before reducing payment for treatment as condition precedent to defending suit brought by medical provider for past due benefits where there is no dispute over the reasonableness, relatedness, or necessity of that treatment
PROGRESSIVE SPECIALTY INSURANCE COMPANY, Petitioner, v. BIOMECHANICAL TRAUMA, ASSOCIATION, INC., Respondent. 2nd District. Case No. 2D00-1197. Opinion filed November 17, 2000. Petition for Writ of Certiorari to the Circuit Court for the Thirteenth Judicial Circuit for Hillsborough County; sitting in its appellate capacity. Counsel: Hinda Klein of Conroy, Simberg & Ganon, P.A., Hollywood, for Petitioner. Mark T. Tischhauser, Tampa, and Wendy Coxhead, Newcastle, Washington, for Respondent.
(PER CURIAM.) Petitioner, Progressive Specialty Insurance Company (Progressive), seeks certiorari review of the circuit court’s opinion rendered while sitting in its appellate capacity that affirms the county court’s final judgment in favor of respondent, Biomechanical Trauma Association, Inc. (Biomechanical). The final judgment was entered on Biomechanical’s motion for summary judgment for past due benefits under a personal injury protection (PIP) policy. Because we find that the circuit court departed from the essential requirements of law in affirming the county court’s final judgment in a written opinion that could serve as precedent, we grant the petition for writ of certiorari. See Fortune Ins. Co. v. Everglades Diagnostics, Inc., 721 So. 2d 384, 385 (Fla. 4th DCA 1998) (noting that “[g]iven the pervasiveness of automobiles and PIP coverage, we deem an erroneous interpretation of this law to be important enough for certiorari”).
Biomechanical provided neurological treatment to Progressive’s insured for injuries received in an automobile accident. Upon receipt of Biomechanical’s bills, Progressive paid only the amount it deemed reasonable according to the usual and customary charges in the community. Biomechanical accordingly brought suit against Progressive in county court for past due bills for medical services, pursuant to an assignment of rights Biomechanical obtained from Progressive’s insured under a PIP policy. There appears to be no dispute that the treatment rendered by Biomechanical was reasonable, related to the accident, and necessary. Instead, the only dispute is whether the amount charged by Biomechanical for that treatment is reasonable.
Biomechanical moved for summary judgment on the disputed amounts, arguing that Progressive was bound by law, under section 627.736(7)(a), Florida Statutes (1995),1 to obtain the report of a physician stating that the charges were excessive before it reduced the charges for medical services rendered. Section 627.736(7)(a) provides, in part, that:
[a]n insurer may not withdraw payment of a treating physician without the consent of the injured person covered by the personal injury protection, unless the insurer first obtains a report by a physician licensed under the same chapter as the treating physician whose treatment authorization is sought to be withdrawn, stating that treatment was not reasonable, related, or necessary.
The county court entered summary judgment in favor of Biomechanical for $131.09. It concluded that pursuant to United Automobile Insurance Co. v. Viles, 726 So. 2d 320 (Fla. 3d DCA 1999), and section 627.736(7)(a), an insurer must first, as a condition precedent to reducing medical charges and/or defending a lawsuit for benefits, obtain a report from a physician licensed with the same level of licensure as the treating physician stating that the charges are excessive. The county court then certified the following question to this court:
In a claim for personal injury protection benefits disputing the amount charged by the treating physician, is it a condition precedent, pursuant to F.S. 627.732(7)(a) [sic], that the insurer obtain a report from a physician licensed under the same chapter as the treating physician, stating that the charge is excessive?
This court declined jurisdiction and transferred the case to the circuit court.
The circuit court affirmed the county court’s final judgment. In its opinion, the circuit court stated that the county court properly relied upon section 627.736(7)(a) and the case of Viles, which interpreted section 627.736(7)(a), to mean that an insurance company must obtain a physician’s report prior to denying payment to a medical provider when the basis for nonpayment is that the treatment was not reasonable, related, or necessary to the accident for which coverage is applicable. Since a physician’s report was not obtained in this case, the circuit court concluded that a condition precedent to reducing payment was not met and that Progressive was required to pay the entire bill.
We disagree with the circuit court’s interpretation of section 627.736(7)(a) and its reliance on Viles, given the facts of this case. The circuit court itself appears to disagree with its opinion in this case and has since receded from it in State Farm Mutual Automobile Insurance Co. v. Lockett, No. 00-236 (Fla. 13th Jud. Cir. July 10, 2000). For the reasons that follow, we conclude that Progressive was not required by section 726.736(7)(a) or Viles to submit a report by a licensed physician to the effect that the treating physician’s charges were excessive before being able to defend a suit brought by Biomechanical for past due benefits.
Section 627.736(7)(a) is entitled “Mental and Physical Examination of Injured Person; Reports” and provides, in relevant part:
Whenever the mental or physical condition of an injured person covered by personal injury protection is material to any claim that has been or may be made for past or future personal injury protection insurance benefits, such person shall, upon the request of an insurer, submit to mental or physical examination by a physician or physicians. . . . An insurer may not withdraw payment of a treating physician without the consent of the injured person covered by the personal injury protection benefits, unless the insurer first obtains a report by a physician licensed under the same chapter as the treating physician whose treatment authorization is sought to be withdrawn, stating that treatment was not reasonable, related, or necessary.
(Emphasis added.)
This section addresses the situation where the insurer under a PIP policy wishes to withdraw payment of a treating physician on the basis that the treatment (as opposed to the charge for that treatment) is not reasonable, related, or necessary. This statute provides that before an insurer can withdraw payment of a treating physician on the basis that the treatment is not reasonable, related, or necessary, it must first obtain a report to that effect from a physician licensed under the same chapter as the treating physician.2
This statute, however, does not address the situation presented in this case which concerns not the reasonableness, relatedness, or necessity of the treatment, but the reasonableness of the charge for that treatment. This latter situation is addressed by section 627.736(5). That section is entitled “Charges for Treatment of Injured Persons.” It provides, in relevant part, that any person or institution lawfully rendering treatment to an injured person for bodily injury covered by a PIP policy “may charge only a reasonable amount for the products, services, and accommodations rendered. . . . In no event, however, may such a charge be in excess of the amount the person or institution customarily charges for like products, services, or accommodations in cases involving no insurance. . . .”
Hence, under this provision, an insurer is statutorily obligated to pay “a reasonable amount for the products, services, or accommodations rendered.” Cf. Derius v. Allstate Indem. Co., 723 So. 2d 271, 272 (Fla. 4th DCA 1998) (holding in a PIP case involving a different issue that “an insurer is not liable for any medical expense to the extent that it is not a reasonable charge for a particular service….”). There is no requirement under this provision that the insurer first submit a report from another physician before reducing its payment for a particular treatment based on what it deems reasonable. See Allstate Ins. Co. v. Ivey, 728 So. 2d 282 (Fla. 3d DCA) (noting that insurer, even after paying less than full amount of doctor’s bill, which insurer reduced based on its determination of what was a reasonable fee per unit of treatment, properly paid the “reasonable” cost of one unit of treatment), review granted, 743 So. 2d 13 (Fla. 1999).
To minimize the impact of disputes over the reasonableness of charges by medical providers, the legislature placed a mandatory arbitration provision in section 627.736(5), which required arbitration of “any claims dispute involving medical benefits arising between the insurer and any person providing medical services or supplies if that person has agreed to accept assignment of personal injury protection benefits.” See Livingston v. State Farm Mut. Auto. Ins. Co., 25 Fla. L. Weekly D533 (Fla. 2d DCA Mar. 3, 2000). That arbitration provision has been declared unconstitutional, as a denial of access to court, because its mandatory provisions apply only where an assignee of PIP benefits is involved but not where the insured brings suit to collect benefits. See Nationwide Mut. Fire Ins. Co. v. Pinnacle Med., Inc., 753 So. 2d 55 (Fla. 2000).
Nevertheless, mechanisms still exist for resolving disputes between a medical provider and an insurer over the reasonableness of the medical provider’s bill, either through court action or through voluntary arbitration. See Livingston, 25 Fla. L. Weekly at D534. However, there is no requirement, either in the statutes or in the case law, that an insurer first obtain a report from a physician licensed under the same chapter as the insured’s treating physician before reducing payment for treatment as a condition precedent to defending suit brought by a medical provider for past due benefits where there is no dispute over the reasonableness, relatedness, or necessity of that treatment.
Viles does not mandate a contrary result. See 726 So. 2d 320. Viles involved an appeal by the insurer from an order directing a verdict in favor of the insured on a breach of contract claim for PIP benefits. Id. The insurer had stopped paying the insured’s chiropractor altogether on the ground that the bills submitted by the chiropractor were fraudulent and not reasonably related to the accident in question. Id. Viles moved for directed verdict based on section 627.736(7), which the trial court granted, finding that the insurer was barred from raising the defense that the bills were not reasonable or necessary because it failed to obtain a physician’s report prior to denying payment. Id.
Final judgment was entered in Viles’ favor. Id. The trial court then certified the following question to the Third District:
In any claim for personal injury protection benefits in which the insurance carrier has withdrawn, reduced benefits or denied further benefits, is it a condition precedent pursuant to Section 627.736(7)(a), Florida Statutes, that an insurer obtain a report by a physician licensed under the same chapter as the treating physician stating that the treatment was not reasonable, related or necessary in order for the insurance carrier to defend a suit for reduction, withdrawal or denial of payments on the grounds of reasonableness, necessity or relationship?
Id. at 321.
The Third District answered this question in the affirmative. See id. While the certified question mentions “reduced benefits” and “reduction” of payments, neither of those factors were at issue in the underlying case and did not play a role in the Third District’s answer. This is made clear by the Third District’s holding in Viles that the insurer “was required to first obtain a physician’s report before refusing to pay further medical bills.” Viles, 726 So. 2d at 321. It went on to state that the “statute plainly provides that an insurer must first obtain the referenced report before electing to withdraw payment.” Id. The Third District concluded that because the insurer failed to comply with this statutory condition precedent, its termination of PIP benefits was ineffective. See id.
Because the insurer had not challenged the amount of the bills, the Third District in Viles addressed only the situation where the insurer withdrew or denied medical benefits altogether; it did not address the situation presented here, where the insurer paid bills in a reduced amount based on what the insurer deemed to be usual and customary charges in the community.
Therefore, Viles was not binding on the county court or on the circuit court in this case. As discussed, the current statutory scheme does not require an insurer to obtain a physician’s report prior to reducing payment for treatment that is reasonable, related to the accident, and necessary, as a condition precedent to defending suit for past due benefits. Cf. AIU v. Daidone, 760 So. 2d 1110 (Fla. 4th DCA 2000) (holding thirty-day period for payment by insurer in PIP statute, section 627.736(4), Florida Statutes (1999), applies only to bills for treatment which is reasonable and necessarily incurred as result of accident; failing to obtain proof that insurer is not responsible for payment within that time does not deprive insurer of right to contest payment).3 The circuit court’s conclusion to the contrary constituted a departure from the essential requirements of law. We accordingly grant the petition for writ of certiorari, reverse the circuit court’s opinion, and remand with directions to reverse the county court’s entry of summary judgment in favor of Biomechanical. (CAMPBELL, A.C.J., and ALTENBERND and CASANUEVA, JJ., Concur.)
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1It is unclear from the limited record before this court which version of the statute applies in this case. However, the 1995 version contains the statutory language that both parties agree applies in this case.
2At least one district court has held that the required medical report does not have to be based upon a physical examination of the insured. See Nationwide Mut. Fire Ins. Co. v. Southeast Diagnostics, Inc., 25 Fla. L. Weekly D316 (Fla. 4th DCA Feb. 2, 2000). According to the Fourth District, the report can be based upon an examination of the insured’s medical records. See id.
3Certifying conflict with Perez v. State Farm Fire & Cas. Co., 746 So. 2d 1123 (Fla. 3d DCA 1999) (holding if insured submits bill for medical services and insurer takes no action within thirty days of receiving notice of bill, insurer must pay bill even if medical services did not result from accident).
