11 Fla. L. Weekly Supp. 677a
Insurance — Personal injury protection — Medical expenses — Reduction — Preferred provider rates — Where insurer did not require use of preferred providers, but merely allowed that if insured elected to use provider who was under contract insured would benefit by obtaining lower co-payment and higher payment percentage and gaining more medical services for same policy limits, section 627.736(10) requirement that preferred provider list be provided to insured electing PPO coverage is inapplicable and provider cannot use statute to abrogate its Beech Street contract — Statute does not create civil cause of action, but is part of regulatory scheme under authority of Department of Insurance — Insurer’s motion for summary judgment granted
DR. DAVID W. SHAW, D.C., (Charles Urso), Plaintiff, vs. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 19th Judicial Circuit in and for St. Lucie County. Case No. 01-CC-949. May 17, 2004. Thomas Walsh, Judge. Counsel: Andrew Wyman, Marks & Fleischer, Fort Lauderdale, for Plaintiff. Blake Crane, Williams, Leininger & Crosby, P.A., West Palm Beach, for Defendant.
FINAL JUDGMENT GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS MOTION
THIS CAUSE is before the Court on Defendant’s, PROGRESSIVE EXPRESS INSURANCE COMPANY, motion for summary judgment and Plaintiff’s, DR. DAVID W. SHAW, D.C., cross-motion for summary judgment. The Court having reviewed the motion and filings of both counsels, and having heard argument of both counsels, and being otherwise fully advised in the premises, it is
I. BACKGROUND
The plaintiff is a medical provider, who rendered treatment to the insured, Charles Urso, following an automobile accident. The defendant, Progressive Express, sells automobile insurance policies in Florida which contain personal injury protection (PIP), pursuant to Florida law. Under the PIP coverage, Progressive agrees to pay 80% of reasonable charges for necessary medical treatment provided to covered insureds who suffer injury in an automobile accident. Progressive issued an insurance policy to the insured. The plaintiff claims that the amount that was received for payment from Progressive pursuant to the submitted bills is less than what Progressive is obligated to pay under the PIP statute. However, Progressive alleges that they paid the bills pursuant to a fee schedule that the plaintiff had agreed to with Beech Street Corporation. Beech Street is a Georgia company, with offices in other states, that contracts with providers for a reduced payment for services rendered in exchange for access to a pool of potential patients. Beech Street also contracted withProgressive wherein Progressivewould have access to providers who have contracted with Beech Street. The plaintiff contends that Progressive is not entitled to pay the bills pursuant tothe Beech Street rate and is prohibited from doing so by the PIP statute.
On May 4, 2001, the plaintiff filed a two count complaint. The complaint is for declaratory reliefand breach of contract. On March 5, 2002 the plaintiff filed an amended complaint. The amended complaint is for declaratory relief and breach of contract. The declaratory relief sought was altered and the plaintiff is now seeking clarification of alleged requirements or benefits under Section 627.736(10).
The following history may behelpful in understanding this matter:
In 1991 Progressive sought and received approval from the Department of Insurance (DOI) for insureds to elect to receive treatment from preferred providers. The insured making such an election receives increased benefits, in that, the payment percentage is increased from 80% to 90% and the deductible is reduced. An insured is not required to select a provider within a network. Various revisions were made to the initial approved plan; however, all such changes were also approved by the DOI.
Here, the Plaintiff entered into a contract with Beech Street Corporation where the plaintiff agreed to accept reduced rates for services. Progressive entered into an agreement with Beech Street to include its insured, who elected to participate as approved by the DOI, in the pool offered to contracting providers. The bills that were submitted by the plaintiff to Progressive were apparently paid at the Beech Street rate, although that particular issue is not before the Court at this time. The plaintiff contends that Progressive must comply with Section 627.736(10) Florida Statutes, in order to have access to and offer the discounted rates for services. The plaintiff further argues that subsection (10) is the sole means for Progressive to participate in the Beech Street contract, and that Section 627.736(10) prohibits an insurance carrier from entering into a contract with Beech Street Corporation. The Court is unwilling to interpret this statute as one that prohibits two businesses from participating in contract/fee negotiations. Moreover, this argued prohibition fails to consider the DOI’s approval.
Two appellate districts have ruled on this issue and are in conflict. The 5th DCA in Nationwide Mutual Fire Ins. Co. v. Central Florida Physiatrists, P.A., 851 So.2d 762 (Fla. 5th DCA 2003), and the 2nd DCA in Nationwide Mutual Ins. Co. v. Dennis M. Jewell, D.C., P.A., No. 2D01-5714, (Fla. 2nd DCA 2003).
II. DISCUSSION
A. Subsection (10)
The issue before the Court at its most basic is which District Court of Appeal decision to adopt. At a more complex level the Court is being asked to interpret Section 627.736(10) Florida Statutes and determine the plain meaning of the statute and its impact on the opposing positions of the parties. It is well settled in Florida law that statutory interpretation is properly for the Court; although deference can and should be given to an agency responsible for overseeing or interpreting the statute. Cenac v. Florida State Bd. Of Accountancy, 399 So.2d 1013 (Fla. 1st DCA 1991). The DOI continually reviewed the proposals submitted by Progressive from 1991through 1999 and ultimately approved Progressive’s implementation of its PIP program. In approving the managed care program of Progressive, the DOI, as the supervising agency, reviewed the insurance contract and the applicable state statutes in order to verify compliance with statutory requirements.
The plaintiff argues that the Florida Legislature enacted Section 627.736(10), Florida Statutes, outlining one method and one method only, for insurers, like Progressive, to contract with insureds while incorporating access to providers offering discounted rates.
In contrast, the 2nd DCA, recognized that subsection (10) is written with permissive rather than mandatory language and stated:
“It is unreasonable to read the provision that insurers “may negotiate and enter into contracts” with preferred providers in the first sentence of subsection (10), along with the subsequent provision permitting the issuance of preferred provider PIP policies, as prohibiting an insurer from having a contractual relationship with a preferred provider, unless the insurer has issued preferred provider policies. Nothing in the test of subsection (10) — or any other provision of the no-fault statute — says that an insurer may contract with preferred providers only if the insurer issues preferred provider policies. While it is true that as a practical matter a preferred provider policy may only be issued by an insurer that has contracted for preferred provider services, the converse is by no means necessarily true. The statutory authorization to contract for preferred provider services and the statutory authorization to provide the option of a preferred provider policy are separate and independent — albeit related — authorizations. Neither is mandatory. The mandatory provisions of subsection (10) come into play only when an insurer issues a preferred provider PIP policy. . .”
“Absent some clear warrant for doing so in the statutory context, such permissive provisions should not be read to impose an impliedprohibition. Here, any warrant for adopting a prohibitive reading of the provisions is lacking. Indeed, such a reading can only be based on unwarranted assumptions concerning legislature intent — assumptions that are detached from and unsupported by the words the [L]egislature actually employed in this statute. . .If the [L]egislature wishes to prohibit something, it is perfectly capable of saying so. Indeed, few words are more common in the language of legislation than the phrases “may not” and “shall not”.” Nationwide Mutual Ins. Co. v. Dennis M. Jewell, D.C., P.A., No. 2D01-5714, (Fla. 2nd DCA 2003).
As in the Jewell case, this matter involves nothing more that the use of a negotiated fee schedule to be used if the insured elected to treat with a covered/contracted provider.
B. Reasonable Rate
Section 627.736(1)(a), Florida Statutes, requires a PIP insurer to pay 80% of “all reasonable expenses” for medical services provided to a covered insured, subject to the $10,000 policy limit. The parties agree that Progressive paid the bills submitted by the plaintiff according to the fee schedule agreed to by the plaintiff with Beech Street.
Whether the rate applied by Progressive is correct and in fact concurs with the fee schedule is yet to be determined, and that issue is not before this Court. If this amount was not paid, then a simple Breach of Contract suit should proceed.
C. Compliance with Florida Law
Progressive offered a program, approved by the DOI, wherein an insured could elect a provider of their choosing for medical care. If the insured chose a provider that had a contractually agreed upon rate, then any bills that were submitted by that provider were paid at the agreed rate. Progressive was not requiring an insured to join a network, nor did it require an insured to see certain providers. An insured that elected a provider, who was under contract, obtained a lower co-payment and a higher payment percentage. Under the program and in this case, the insured would save money and gained more medical services as the reduced fee schedule of the provider extends the insureds $10,000 benefits.
Here the insured simply acquired insurance and sought a provider of his or her choosing. Subsection (10) requires that a preferred provider list be provided to an insured that elects PPO coverage. However, if the insurer is not requiring use of any particular providers then there is no list to provide. The insured is and was free to choose any provider in the Yellow Pages, some will have contractual rates, some will not. Additionally, subsection (10) requires that the insurer provide a preferred provider policy and a non-preferred provider policy. However, again there is no separate network to distinguish. There is no select set of providers that the insured is required to use. In other words, the patient clearly benefits from the contract between the medical provider and the insurance company since the patient can receive more medical services for the same $10,000.00 limit. However, the medical provider has agreed to accept less and, in the medical provider’s view, he or she did not receive any other benefit. Hence, the medical provider is attempting to utilize Subsection 10 as a means by which toabrogate the Beech Street contract. The Court is not inclined to interpretF.S. 627.736(10) in this manner. Interesting, the plaintiff has argued that the defendant seeks to have “the best of both worlds,” but the plaintiff’s position also appears to seek the same thing. This Court can not ignore the contract that this medical provider entered into simply because the medical provider discovered that he could receive more benefits via the Statute.
D. Cause of Action
As such, the Court finds that Section 627.736(10), Florida Statutes does not create a civil cause of action. The statute outlines a procedure for providing PPO contracts and rates to insureds with select providers. The nature of this statute is regulatory and authority for its enforcement lies with the DOI and not with this Court.
The Supreme Court has created distinctions between statutes that create a private cause of action and a statute that regulates public safety and welfare. The Court has held that:
“[t]here is no evidence in the language of the statute or the statutory structure that a private cause of action against a qualifying agent was contemplated by theLegislature in enacting the statute. Rather, the language of Chapter 489 indicates that it was created merely to secure the safety and welfare of the public by regulating the construction industry. In general, a statute that does not purport to establish civil liability but merely makes a provision to secure the safety and welfare of the public as an entity, will not be construed as establishing a civil liability.” Murphy v. N. Sinha Corp., 644 So.2d 983 (Fla. 1994) at 986.
As with the above case, Subsection (10) does not contain any requisite language creating a private cause of action. Moreover, it is not drafted to extend any benefit to this plaintiff, as a medical provider. Therefore, the Court finds that Subsection (10) is part of a regulatory scheme, embodied in Part I-XXI of Chapter 627, which sets forth the powers and duties of the DOI in connection with the regulation of insurance companies and enforcement of statutory requirements. A regulatory scheme confers no private right of action.
III. CONCLUSION
The rate agreed to by the plaintiff in its contract with Beech Street is logically a “reasonable rate” as required by the statute. The defendant in offering its managed care program received input and approval from the DOI. The DOI is charged with protecting the public interest and enforcing statutory compliance by insurers. There is no allegation that it failed in its duty.
The Court finds the DOI approved a program that is not related to the statutory provisions of subsection (10). It is unreasonable to assume that the DOI approved a program knowing that it violates state law. Clearly, there must then exist a distinction that makes this program permissible and outside the confines of subsection (10). Here there is no select group of providers that is being offered to insureds. An insured may choose any provider he or she wishes. The insured receives a benefit from this program in a reduced co-payment and an increase in the payable percentage from 80% to 90%.
Hence, the statute as written does not give rise to a private cause of action. The statute is part of a regulatory scheme put in place by the Legislature and conferred on the DOI as the regulating agency.
Accordingly, it is
ORDERED AND ADJUDGED as follows:
1. Defendant’s motion is GRANTED in so much as the Court determines that the defendant has not and could not violate Section 627.736(10) Florida Statutes as alleged, and that the contractual rate agreed to by the plaintiff for medical services is an agreed upon rate between the parties, and that subsection (10) does not create a private cause of action. Here, as in any contract dispute, the Plaintiff may file a Breach of Contract action if the rate paid by the Defendant is not in accordance with the contract.
2. Defendants Motion for Summary Final Judgment is GRANTED and the Plaintiff’s cross-motion is DENIED.
3. The Court reserves ruling on costs or fees pursuant to subsequent motions.
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