11 Fla. L. Weekly Supp. 1a
Insurance — Personal injury protection — Coverage — Denial — Exhaustion of benefits — Where insurer denied coverage for insured’s magnetic resonance imaging, and insurer exhausted benefits by continuing to pay other bills, even after insured filed suit to compel payment for MRIs, it was error to enter summary judgment in favor of insurer — Insured was not required to make a separate demand to place contested amounts in escrow in court registry — Remand to determine amount insurer should pay for MRI examinations
YVETTE JOHNSON-FLEMING, Plaintiff, vs. ALLSTATE INSURANCE COMPANY, Defendant. Circuit Court, 5th Judicial Circuit (Appellate) in and for Marion County. Case No. 2003-583-CA. L.C. Case No. 02-2460-SC. September 26, 2003.
OPINION
CASE SUMMARY
(MERRITT, Presiding Judge) The appellant, Fleming, was injured when her car was rear-ended on October 22, 2001. She was referred to the Advanced Imaging Center on October 30, 2001, where she received two separate examinations by magnetic resonance imaging, (“MRI”). The invoice for these procedures totaling $2,151.98, was submitted to Allstate Insurance Company, who was Fleming’s automobile insurer. Fleming’s policy with Allstate provided for the required $10,000.00 in personal injury protection benefits, plus an additional $5,000.00 in accident related medical, coverage. Allstate declined to pay for the MRIs and Fleming filed her lawsuit to compel payment or recoup the cost on August 12, 2002.
On January 8, 2003, Allstate filed a motion for summary judgment claiming exhaustion of all benefits. At the hearing on the motion, the attorneys for Allstate and Fleming acknowledged that there were no appellate cases directly on point and both attorneys argued county, circuit, and circuit-appellate, orders and opinions that each respectively said supported their positions. The County Court granted partial summary judgment for Allstate premised on the exhaustion of benefits but allowed the issue of the whether the MRIs were reasonable and necessary to go before the jury to allow Fleming to preserve her claim for interest and attorneys fees for the unpaid bill. The trial was held and the jury found for Fleming. Final Judgment was entered on February 27, 2003, awarding Fleming $213.44 for the unpaid interest that accrued on the MRI bills. Fleming now appeals, arguing that Allstate improperly exhausted benefits during the pendency of litigation in order to avoid paying for the MRIs.
ANALYSIS
Lawsuits disputing either the payment of, or entitlement to, insurance benefits are as common as daisies in Spring, but curiously the particular scenario posed by this case has not been scrutinized as frequently as the facts would seem to warrant. The legal question presented by this case, while compound, is straightforward enough:
If an insurer fails to pay for a “reasonable and necessary” medical service, and the claimant thereafter files suit, and if after the filing of the suit, the insurer continues to pay for medical services rendered to the claimant; and as a result — exhausts all benefits — (after the suit has been filed), does the exhaustion of benefits foreclose the claim for the unpaid service?
There is a well established line of cases where claimants have filed suit to recover for unpaid bills after insurance benefits have been exhausted. See in exempla, Darrow v. Progressive Insurance, 9 Fla. L. Weekly Supp. 117a (Fla. 18th Cir. Ct., Nov. 14, 2001); Images of the Bay, Inc. v. Allstate Insurance, 10 Fla. L. Weekly Supp. 120a (Fla. 13th Cir. Ct., Dec. 9, 2002). These cases hold that since benefits were exhausted prior to initiating litigation, no additional benefits can be recovered.
There is also a line of cases where insurers have exhausted benefits after lawsuits have been filed by first party claimants and third party assignees. In MTM Diagnostic Inc. v. State Farm Insurance, 9 Fla. L. Weekly Supp. 581e (Fla. 13th Cir. Ct., App., Nov. 20, 2000), summary judgment was granted in favor of the insurer where the insurer made timely partial payment to the service provider, but exhausted all benefits after the service provider filed suit. The court in this case also considered the failure of the service provider to demand the insurer to escrow the challenged balance of the payment also prevented recovery. A somewhat similar case is, Randel v. Allstate Insurance, 7 Fla. L. Weekly Supp. 301a (Fla. 6th Cir. Ct., App., March 25, 1996). In Randel, the insured submitted her medical bills to her insurer, Allstate. Allstate reduced the bills and paid a portion of them. The insured filed suit alleging Allstate had failed to fully pay the bills within the statutory time limit. During the pendency of litigation, Allstate exhausted the PIP and medical payment benefits because of bills the insured continued to submit. Allstate moved for summary judgment which was granted. On appeal the court held that while the insured was not entitled to any additional benefits, she should be allowed to go to trial on the issue of whether Allstate was in violation of the benefits payment statute. The court reasoned that the insured was still entitled to recover for interest on the unpaid balance and her attorney fees if Allstate was found to be in violation of the statute.
Another line of cases address circumstances where an insurer has paid nothing for a billed service. In these cases the insurer usually claims the service is not medically necessary or related to accident injuries. One such case is, Pinnacle Medical Inc. v. Allstate Insurance, 5 Fla. L. Weekly Supp. 663a (Fla. 17th Cir. Ct., App., April 23, 1998). In Pinnacle, Allstate refused to pay Pinnacle for the service provided to its insured, and continued to pay other bills as they came in. After arbitration, Allstate exhausted the remaining benefits and filed a motion for summary judgment, which was granted. The circuit court sitting in its appellate capacity reversed the summary judgment, finding that Allstate’s method of paying claims was the real issue. The court observed:
“If the procedure used in this case was allowed in each instance as a matter of law, it would permit and sanction allowing an insurer to apply the payments of medical bills in any manner it chose and, in some cases, to exhaust PIP benefits so as to deny payment to any medical providers who are not ‘favored’.”
Allstate has now chosen to do the same thing to Fleming. While paying nothing for Fleming’s MRIs, Allstate continued to pay other bills, even after Fleming filed suit. Allstate had notice of the issue in controversy and Fleming was not required to make a separate demand to place the contested amount in escrow or into the Court’s Registry. Nor was she required to forgo continued treatment for her injuries. Fleming turned to the courts to decide the issue of whether Allstate should pay for the MRIs before benefits were exhausted. A jury has decided that the services Allstate refused to pay for were medically necessary.
The Summary Judgment of the County Court is reversed and the case is remanded for proceedings to determine what amount should be paid to Fleming for the MRI examinations in accordance with law. (HILL, J. and SINGBUSH, J., Concur)
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