12 Fla. L. Weekly Supp. 377a

Insurance — Personal injury protection — Coverage — Medical expenses — Reasonable, related and necessary treatment — MRI — No merit to insurer’s claim that it is not obligated to make any payment for MRI because amount billed exceeded statutory maximum — Where treating physician’s testimony established that MRI was medically necessary and related to insured’s injuries; court cannot consider peer review report that was not obtained before MRI bill was denied; and independent medical examination report does not express any opinion concerning necessity of MRI or other care rendered prior to examination; there is no genuine issue of material fact regarding reasonableness, relatedness and necessity of MRI — Fraud — Affirmative defense of fraud is deemed waived where insurer has provided no facts in answer that would support defense — Demand letter — Where evidence establishes that pre-suit demand letter was mailed and was received by insurer, and demand letter was not required because insurer denied payment of medical bill, affirmative defense of failure to send sufficient demand letter fails — Provider’s motion for summary judgment granted

INTERSCAN, INC., (Susana Santana), Plaintiff, vs. UNITED AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 02-6735 SP 26 (3). December 28, 2004. Cristina Pereyra Shuminer, Judge. Counsel: Stuart L. Koenigsberg, Stuart L. Koenigsberg, P.A., and Ivan Tobias, for Plaintiff. Noel Espinosa and Nicole Malick, Office of the General Counsel, United Automobile Insurance Co., for Defendant.

ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

Plaintiff’s Motion for Summary Judgment was heard on Tuesday, October 26, 2004 at 2:00 P.M. in Chambers at the South Dade Justice Center, 10710 S.W. 211th Street, Miami, Florida 33189 before the Honorable Cristina Pereyra-Shuminer. Stuart L. Koenigsberg, Esq. and Ivan Tobias, Esq. appeared on behalf of Plaintiff, INTERSCAN, INC. Noel Espinosa, Esq. appeared on behalf of the Defendant, UNITED AUTOMOBILE INSURANCE COMPANY. Plaintiff, in support of their motion filed the deposition transcript of Manuel Feijoo, M.D., the sworn examination under oath transcript of Susana Santana, the affidavit of Yigani Rodriguez and the sworn policy declarations page of Santana’s Insurance policy. The Defendant filed in opposition an October 22, 2004 affidavit of Peter Millheiser, M.D. to which was attached copies of an independent medical examination performed by him on January 30, 2002 and a peer review he conducted on November 18, 2002. The Court also reviewed an affidavit of Theresa Rodriguez, a litigation adjuster with Defendant filed on September 29, 2004 and a no-fault payout sheet also filed by the defendant in this case. After considering the legally admissible evidence of record, argument of counsel for both Plaintiff and Defendant, having reviewed applicable legal authority provided by the parties and being otherwise fully advised in the premises of Plaintiff’s motion, this Court makes the following factual findings and legal conclusions:

FACTUAL FINDINGS

1. Susana Santana, a non-party to this action, was involved in an automobile accident which occurred on December 18, 2001.

2. UNITED AUTOMOBILE INSURANCE COMPANY, insured Santana under a policy of insurance, specifically policy number UAU000560018, which provided no-fault insurance coverage on the date of Santana’s accident.

3. Santana sustained injuries from the accident and was referred by Manuel Feijoo, M.D., her treating physician, to INTERSCAN, INC., a diagnostic provider of magnetic resonance imaging scans, for an MRI of the lumbar spine. INTERSCAN, INC. performed the MRI scan on January 29, 2002.

4. Santana assigned to INTERSCAN, INC., her rights to benefits under her insurance policy with UNITED AUTOMOBILE INSURANCE COMPANY.

5. INTERSCAN, INC. timely furnished Defendant UNITED AUTOMOBILE INSURANCE COMPANY with written proof of their claim for the payment of no-fault benefits under Santana’s insurance policy, including a notice of initiation of treatment, HCFA 1500 medical bill in the amount of $1,800.00, an MRI report from the radiologist interpreting the study, an assignment of benefits and pre-suit demand letter.

6. UNITED AUTOMOBILE INSURANCE COMPANY received INTERSCAN, INC.’s proof of claim on March 6, 2002.

7. The deposition of Manuel Feijoo, M.D., Susana Santana’s treating physician established that the lumbar spine MRI was medically necessary. Feijoo’s testimony and medical records documented lumbar spine injuries including limited range of motion, tenderness to palpation, positive orthopedic testing including Lasegue’s sign, left leg sciatic pain and numbness. The MRI scan was ordered “to rule out a disc herniation” as it allowed visualization of the soft tissues and parts of the body that could not be seen on x-rays.

8. The affidavit of Yigani Rodriguez, owner and records custodian of Plaintiff, INTERSCAN, INC. verified confirming insurance coverage with UNITED AUTOMOBILE INSURANCE COMPANY on January 29, 2002. Rodriguez established that INTERSCAN’s bill was prepared using the Current Procedural Terminology (CPT) Guidelines and that CPT Code 72148 was the appropriate code for an MRI of the lumbar spine. She testified that of the $1,800.00 normally charged for a lumbar MRI scan, UNITED AUTOMOBILE was obligated to pay $1,129.61, representing 175% of the participating rate established by the 2001 Medicare Part B Physician and Non-Physician Practitioner Fee Schedule.

9. The affidavit of Theresa Rodriguez, UNITED AUTOMOBILE’s litigation adjuster, likewise indicated that the “allowable amount” of INTERSCAN’S bill pursuant to the Medicare Part B Fee Schedule for services provided pursuant to CPT Code 72148 was $1,129.61.

10. The October 22, 2004 affidavit of Peter Millheiser, M.D. essentially confirmed that he performed a January 30, 2002 independent medical examination of Susana Santana and a “peer review” on November 18, 2002. Plaintiff objected to this Court’s consideration of Dr. Millheiser’s IME report and peer review, the later of which expressed the opinion that Plaintiff’s treatment was not medically necessary.

11. Without addressing the issues of the admissibility of either report, Millheiser’s January 30, 2002 IME report was conducted after Plaintiff’s services had already been performed and did not address whether Plaintiff’s care was reasonable, related or necessary. The report was limited only to treatment subsequent to the date of Millheiser’s examination. In fact, both parties acknowledged that Defendant, in reliance on same, did not suspend benefits for prior care but only for medical care subsequent to March 11, 2002.

12. Dr. Millheiser’s November 18, 2002 peer review did address the medical necessity of Plaintiff’s MRI scan, albeit nearly ten months after INTERSCAN rendered their services and more importantly, after Defendant had already denied care on the basis that they were not reasonable, related or necessary. (Defendant’s Answer and Affirmative Defenses dated October 24, 2002 states inParagraph four that“Defendant denies that the bills at issue in this law suit are reasonable, related or necessary”).

13. Defendant’s Answer raised four affirmative defenses:

a. That Plaintiff submitted fraudulent bills;

b. That Plaintiff’s care and treatment was not reasonable, related or necessary on the basis of Dr. Millheiser’s peer review;

c. That Plaintiff failed to furnish a statutory presuit notice pursuant to Fla. Stat. 627.736(11);

d. That Plaintiff’s services rendered were not in accordance the Medicare Part B Fee Schedule; .

14. Defendant’s affirmative defense that Plaintiff’s services rendered were not in accordance the Medicare Part B Fee Schedule was also raised in Defendant’s Motion for Summary Judgment which was incorporated into this hearing.

LEGAL ANALYSIS

15. Fla.R.Civ.P. 1.510 holds that judgment

“shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions filed together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”

16. Evidence considered by this Court in summary judgment proceedings must meet the evidentiary standards for admissibility. Ham v. Heintzelman’s Ford, Inc., 256 So.2d 264 (Fla. 4th DCA 1971) [“inadmissible hearsay cannot be utilized either in support of or in opposition to a motion for summary judgment”]. Page v. Staley, 226 So.2d 129 (Fla. 4th DCA 1969)

[Plaintiff’s affidavit stating than another person told Plaintiff that Defendant had committed slander did not meet the test of admissibility of Rule 1.510 and thus the inadmissible hearsay statements contained in the affidavit should not have been considered by the Court];

Zoda v. Hedden, 596 So.2d 1225 (Fla. 2nd DCA 1992)

[Authentication of evidence is a condition precedent to admissibility and thus affidavit recounting details of records not authenticated is hearsay and cannot be considered by the Court for Summary Judgment purposes].

17. Latour v. Stromberg-Carlson Leasing, 335 So. 2d 600 (Fla. 3rd DCA 1976), holds that:

“If the movant sustains his initial burden of proof, the opponent then has the burden of coming forward with evidence establishing genuine material factual issues.”

18. Derius v. Allstate Indemnity Co., 723 So. 2d 271 (Fla. 4th DCA 1998) sets forth Plaintiff’s burden of proof in establishing a prima facie case for no fault insurance benefits. Derius requires Plaintiff to prove that their medical services are necessary and that the bills for their services are reasonable.

19. §627.736(5)(b)(5) (Fla. Stat. 2001) and the Third District Court of Appeal opinion in Millenium Diagnostic Imaging Center, Inc. v. Security National Insurance Company, 882 So.2d 1027 (Fla. 3rd DCA 2004) has madethe “reasonableness” of charges for MRI services rendered in no-fault insurance cases a legal issue. The reasonable charge as a matter of law for MRI services rendered by a non-accredited provider is 175% of the participating rate set forth in the 2001 Medicare Part B Physician and Non-Physician Practitioner Fee Schedule.¹

20. The affidavits of Yigani Rodriguez and Theresa Rodriguez, in addition to this Court’s review of the 2001 Medicare Part B Physician and Non-Physician Practitioner Fee Schedule all confirm that 175% of the participating rate for an MRI of the lumbar spine billed pursuant to CPT 72148 is $1,129.61. Thus, this Court finds as matter of law that $903.69, represents 80% of the “allowable” participating rate charges set forth above. This Court rejects Defendant’s contention that they are not obligated to make any payment because the $1,800.00 bill submitted to them exceeded the statutory maximum. This Court finds that the statute, §627.736(5)(b)(5) (Fla. Stat. 2001), as applied to MRI bills in no-fault cases, was intended solely to limit the amount that Defendant is obligated to pay. This would be true in any other managed care arrangement where charges are reduced pursuant to a negotiated schedule or other contractual arrangement.

21. Regarding the necessity of Plaintiff’s medical services, this Court finds as a matter of law that the testimony of Manuel Feijoo, M.D. establishes that the lumbar MRI scan performed by Plaintiff was medically necessary and related to the injuries sustained by Susana Santana in her automobile accident of December 18, 2001. Thus, this Court finds that Plaintiff has established their prima facie case.

22. The next determination is whether Defendant, UNITED AUTOMOBILE INSURANCE has provided any legally admissible evidence of record that this court can consider that would create a material factual issue in this case. Latour v. Stromberg-Carlson Leasing, 335 So.2d 600 (Fla. 3rd DCA 1976).

23. As a matter of law, this Court cannot consider the “peer review” report of Peter Millheiser, M.D. in determining whether or not factual issues exist as to the reasonableness, relationship or necessary of Plaintiff’s care pursuant to §627.736(7)(a). Dr. Millheiser’s November 18, 2002 report was not in the possession of the Defendant at the time the MRI bill was denied on the basis that it was not reasonable, related or necessary.

24. The Third District Court of Appeal in United Automobile Insurance Company v. Viles, 726 So. 2d 320 (Fla. 3rd DCA 1999) has interpreted §627.736(7)(a) Fla. Stat. to require that an insurance company seeking to deny payment of no-fault services on the basis that treatment is not reasonable, related and necessary have:

“within their possession, a medical report from a physician licensed under the same chapter as the physician involved in the care sought to be withdrawn stating that it is not reasonable, related or necessary before care is denied.”

25. This Court, sister courts, and the Eleventh Judicial Circuit Court in its appellate capacity have adhered to this holding. Pablo Mursuli, M.D. v. United Automobile, 12 Fla. L. Weekly Supp. 95a (11th Cir. 2004) [Defendant’s Peer Review obtained years after care was denied cannot be considered as it does not meet the requirements of §627.736(7)], Optima Health & Rehab, (Ricardo Abreu) v. United Automobile Insurance Company, 11 Fla. L. Weekly Supp. 146a (11th Cir. 2003)

Therefore, pursuant to Fla. Stat. §627.736(7)(a), whenever an insurer chooses to question whether or not the treatment was reasonable, related, or necessary, it must first follow certain procedures before it may legally withhold payment to the provider for such treatment. If the insurer cannot obtain the consent of the injured insured not to pay the bills, it must obtain a valid report by a physician licensed under the same chapter as the treating physician. After either examining the insured or reviewing the treatment records, that physician must state that the treatment was not reasonable, related, or necessary. If the insurer does not follow these steps, the insurer may not withhold payment.

United Automobile Insurance Company v. Michael Rose, M.D., 03-641 AP (11th Cir. App. 2004)

Additionally, to the extent that United Auto was denying payment of bill on the ground that the treatment was unreasonable or unnecessary on any ground other than that the charges were too high, United Auto would have to submit a report from a physician pursuant to sec. 627.736(7), Fla. Stat. (2004).”

26. Dr. Millheiser’s “peer review” does not meet the requirements of §627.736(7)(a) Fla. Stat. because it was not obtained before Plaintiff’s care was denied on the basis that it was not reasonable, related or necessary. As a result, is not a “valid report” as defined by the statute.

27. This Court also finds, pursuant to the Eleventh Judicial Circuit Court’s appellate opinion in United Automobile Insurance Company v. Mendoza, 11 Fla. L. Weekly Supp. 299a (11th Cir. Ct. 2004) and United Automobile Insurance Company v. Hurtado, 11 Fla. L. Weekly Supp. 877a (11th Cir. Ct. 2004) that Dr. Milheiser’s January 30, 2002 independent medical examination report does not create a factual issue regarding the medical necessity of Plaintiff’s treatment. Dr. Millheiser did not express any opinion concerning the necessity of Plaintiff’s MRI scan or any care rendered prior to his examination. Both parties acknowledged that Defendant, in reliance on Dr. Millheiser’s IME report, suspended benefits for treatment after March 11, 2002, well after the date that Plaintiff’s services were rendered. In fact, Defendant’s affirmative defense as to medical necessity concedes that the “Peer Review” was the factual basis for same.

28. Both Mendoza and Hurtado, opinions from the Eleventh Judicial Circuit in its appellate capacity, affirmed the lower court summary judgments granted in favor of Plaintiff’s as to care and treatment rendered prior Defendant’s suspension of subsequent benefits in reliance on independent medical examinations holding as a matter of law that the IME report did not create any factual issues with respect to the reasonableness, relationship or necessity of care and treatment rendered by Plaintiff before the date of suspension.

29. Regarding Defendant’s affirmative defense of Fraud, Defendant has provided absolutely no facts in their answer that would support this defense. Under Florida law, the pertinent facts and circumstances constituting fraud must be pled with specificity and all essential elements of fraud must be stated. Cocoves v. Campbell, 819 So.2d 910 (Fla. 4th DCA 2002). Under Cocoves, an affirmative defense of fraud that does not specify fraud with particularity is deemed waived. The elements of fraud are 1) a false statement of fact 2) known by the maker to be false at the time it was made, 3) made for the purpose of inducing an act in reliance thereon, 4) action in the reliance on the correctness of the representation and 5) resulting damage. Poliakoff v. National Emblem, 249 So.2d 477 (Fla. 3rd DCA 1971). The record evidence before this Court does not give rise to any facts which would establish an affirmative defense of fraud. See also, United Automobile v. Lopez, 11 Fla. L. Weekly Supp. 297b (11th Cir. App. 2004)

“The appellant’s allegations of fraud were too general and conclusory to establish the affirmative defense. See Zikofsky, 846 So. 2d at 684. A defense of fraud must be legally sufficient to be appropriate for submission to the trier of fact. See Ton-Will Enterprises, Inc. v. T & J Losurdo, Inc., 440 So. 2d 621(Fla. 2d DCA 1983). The patent legal insufficiency of the appellant’s affirmative defense warranted the order striking it. See Cocoves, 819 So. 2d 910.”

30. Lastly, Defendant’s remaining affirmative defense pertaining to the presuit demand letter are without legal merit. First, the evidence before this Court established that a presuit letter was mailed to and received by the Defendant. Second, a seven day demand letter pursuant to the requirements of §627.736(11) Fla. Stat. in effect when Plaintiff’s treatment was rendered was not required under the statute when, as was the case here, Defendant denied payment of the bill. See Mobile Diagnostic v. Allstate, 10 Fla. L. Weekly Supp. 1044d (17th Cir. 2003), Graham v. Progressive, 11 Fla. L. Weekly Supp. 336a (4th Cir. 2004). Thus, it is not necessary to address the issues with respect to the sufficiency of the demand letter sent to Defendant in this case.

CONCLUSION

The record evidence before this Court, when viewed in the light most favorable to the Defendant non-moving party, contains no genuine issues of material facts concerning the existence of an accident, availability of insurance coverage under Defendant’s automobile policy issued to Susana Santana, the validity of the assignment of benefits, the medical necessity of the care and treatment rendered by the Plaintiff, the reasonableness of the charges for Plaintiff’s medical care or any other issues concerning Plaintiff’s prima facie case or collateral issues such as whether the care and treatment was lawfully rendered. Defendant’s affirmative defenses, as pled, fail to establish any reasonable proof that Defendant is not responsible for the payment of Plaintiff’s bills. In light of the foregoing, it is Ordered and Adjudged that Plaintiff’s Motion for Final Summary Judgment is GRANTED.

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¹Had the Plaintiff in this particular case been an accredited facility they would have been entitled to receive payment at a rate of 200% of the aforesaid fee schedule.

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