12 Fla. L. Weekly Supp. 75b
Insurance — Personal injury protection — Coverage — Medical expenses — Reduction — Claim for unpaid portion of bills subsequent to exhaustion of policy limits — Where policy limits were exhausted well before suit was filed, insurer is as matter of law not liable to provider for remainder of reduced benefits or denied benefits but may still be liable for statutory damages for lateness of reduced and denied payments, including interest and attorney’s fees — Insurer’s motion for summary judgment is granted in part and denied in part
OCCUPATIONAL AND REHABILITATION CENTER, (assignee of Patricia Hunt), Plaintiff, vs. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 16-2003-SC-7517 XXXX-MA, Division N. November 2, 2004. Gary P. Flower, Judge. Counsel: D. Scott Craig, Farah, Farah & Abbott, P.A., Jacksonville. James C. Rinaman, III, James C. Rinaman, III & Associates, P.A., Jacksonville, for Defendant.
AMENDED ORDER ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
This cause came to be heard upon the Motion for Summary Judgment and Supporting Memorandum of Law (Motion), filed by counsel for Progressive Express Insurance Company (Progressive), on August 21, 2003. The Motion relates to a claim for personal injury protection (PIP) benefits assigned by Patricia Hunt (Hunt) to Occupational and Rehabilitation Center (ORC), following Hunt’s Florida auto accident on November 28, 2001. The Court held a hearing on the Motion on June 2, 2004; both parties were represented by counsel. The Courts’ Order granting Progressive’s Motion for Summary Judgment was filed on July 21, 2004. ORC filed a Motion for Rehearing on July 23, 2004. The Court granted the Motion in an Order filed on August 5, 2004. The Court held a rehearing pursuant to Rule 7.020(c) Florida Small Claims Rules and Florida Rule of Civil Procedure 1.530. The hearing was held on September 28, 2004, both parties were represented by counsel. The Court, having heard arguments, having fully considered the record including the pleadings filed by counsel, and otherwise being fully advised, rules as follows:
1. The Court finds the following facts to be undisputed:
A. Hunt’s policy of insurance with Progressive provided for $10,000.00 in Personal Injury Protection (PIP) benefits.
B. ORC, through counsel, filed a Complaint against Progressive on July 23, 2003. The Complaint alleges that Hunt was involved in an auto accident on or about November 28, 2001; that ORC subsequently treated Hunt; that ORC made a demand for payment from Progressive based on Hunt’s assignment of the PIP claim, and that Progressive did not pay the full amount charged, thus failing to make payment of the No-Fault benefits within thirty days, as required by statute. See § 627.736(4)(b), Fla. Stat. (2003). ORC’s Complaint prayed for the amount of the payment reductions made by Progressive to ORC’s bills for Hunt’s care, pre-judgment interest thereon, all interest on any benefits not timely paid pursuant to section 627.736(4)(c), attorneys’ fees pursuant to sections 627.428 and 627.736(8), legal assistant fees pursuant to section 57.104, and costs pursuant to sections 92.231 and 57.041.
C. Progressive, through counsel, on August 21, 2003, filed a Motion for Summary Judgment. Progressive’s Motion alleged that PIP benefits were exhausted on July 16, 2002 more than a year before the date of the filing of the Complaint. Progressive supported its assertion with the affidavit of Debbie Tahse, to the effect that benefits were exhausted on the Hunt accident on July 16, 2002. Progressive thus claimed it owed ORC nothing.
D. ORC, on June 2, 2004, filed its Memorandum of Law in Opposition (Memorandum) to Progressive’s Motion for Summary Judgment. In its Memorandum, ORC argued that the issue of whether or not Progressive paid ORC a reasonable and proper amount for services it provided prior to exhaustion of benefits was a question of fact that precluded summary judgment.
E. In support of its argument, ORC argued that Progressive had unilaterally reduced its payments to ORC for CPT codes 97124, 99243, and 97033 for service dates 12/10/01 through 4/15/01, without reasonable proof to justify the reductions. ORC alleges that the use of the computer program utilized to review the charges and recommend reductions, Mitchell’s Medical, does not constitute reasonable proof that reduction of the charges was warranted.
F. ORC also argued that Progressive improperly reduced its bill for CPT code 95860 and 95869, a needle electromyography to a non-existent, inapplicable fee schedule. ORC argued that the code for 95860 and 95869 should have been paid at 80% without a statutory reduction, and that it was its belief that the charges for the nerve conduction studies, CPT codes 95900 and 95904, were erroneously applied to the Florida Worker’s Compensation fee schedule. ORC argued that Progressive, upon its duty to investigate the claim, should have paid those charges 200% of the Medicare allowable under the participating physician fee schedule of Medicare Part B for the year 2001.
G. ORC additionally argued that Progressive wrongfully denied payment for CPT code 64550 for date of service February 11, 2002. ORC alleged that Progressive, in its explanation of benefits, explained that it had denied payment for that code because another code charged on the same date of service, code 97014, included the services charged in code 64550. ORC contended that both codes were for separate and distinct procedures that were reimbursable as billed. ORC also argued that the issue of whether the two codes are separately reimbursable for the same date of service is a factual issue that should not be decided on summary judgment.
H. Finally, ORC argued that Progressive paid for medical services rendered on January 16, 2002 and April 01, 2002 beyond the thirty (30) day statutory time frame allowed. ORC argued that as a matter of law, Progressive owed it interest for those late payments.
2. In its Motion for Rehearing, ORC asserts substantially the same arguments listed above, as well as asserting that this Court’s initial Order on Summary Judgment gives short shrift to whether or not the above unmade payments are overdue, so as to require Progressive as a matter of law to pay statutory interest pursuant to section 627.736(4)(c), Florida Statutes. ORC argues that the payments may be considered overdue if Progressive does not have reasonable proof to establish that it was not responsible for the payments.
3. “To establish entitlement to a summary judgment, the moving party must demonstrate conclusively that no genuine issue exists as to any material fact, even after all reasonable inferences are drawn in favor of the party opposing the summary judgment.” Johnson v. Circle K Corp., 734 So. 2d 536, 536-37 (Fla. 1st DCA 1999), citing Moore v. Morris, 475 So. 2d 666 (Fla. 1985).
4. It has long been the rule of law in Florida that an assignee of a contract occupies the same position as did the assignor of the contract “with respect to the moneys, having the same rights, and being subject to the same equities, conditions, and defenses.” Fla. East Coast Ry. Co. v. Eno, 128 So. 622, 626 (Fla. 1930). The Florida Supreme Court has further stated that an assignee receives no greater rights than were held by the assignor at the time of making the assignment. Union Indem. Co. v. City of New Smyrna, 130 So. 453, 455 (Fla. 1930). Finally, in Department of Revenue v. Bank of America, 752 So. 2d 637 (Fla. 1st DCA 2000), the court held that “[t]he general rule is that ‘[a]n assignee stands in the shoes of his assignor.’ ” Id. at 642.
5. The lawsuit from which the instant Motion arises was filed on July 23, 2003. Progressive fulfilled its contractual obligation to Hunt to provide $10,000.00 in PIP benefits on July 16, 2002. Progressive was thus relieved of liability pursuant to its contract with Hunt well prior to the filing of the instant case. An assignee such as ORC receives no greater rights than were held by the assignor at the time of making the assignment. Union Indem., 130 So. at 455. As a matter of law, due to the exhaustion of Hunt’s policy limits Progressive is not liable to ORC for payment of any further benefits. Specifically, Progressive is not liable to ORC for the amounts of any of the payment reductions it made to ORC’s bills for Hunt’s care, nor is Progressive liable to ORC for the amounts of any claims ORC submitted for Hunt’s care that Progressive denied.
6. Although Progressive is not liable to ORC for payment of any further benefits because those benefits have been exhausted, ORC may still be entitled to statutory damages. Section 627.736(4)(b), Florida Statutes (2003), states, in pertinent part:
Personal injury protection insurance benefits paid pursuant to this section shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same. . . . When an insurer pays only a portion of a claim or rejects a claim, the insurer shall provide at the time of the partial payment or rejection an itemized specification of each item that the insurer had reduced, omitted, or declined to pay and any information that the insurer desires the claimant to consider related to the medical necessity of the denied treatment or to explain the reasonableness of the reduced charge, provided that this shall not limit the introduction of evidence at trial; and the insurer shall include the name and address of the person to whom the claimant should respond and a claim number to be referenced in future correspondence. However, notwithstanding the fact that written notice has been furnished to the insurer, any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment.
Id. Section 627.736(4)(c), Florida Statutes (2003), states:
All overdue payments shall bear simple interest at the rate established under s. 55.03 or the rate established in the insurance contract, whichever is greater, for the year in which the payment became overdue, calculated from the date the insurer was furnished with written notice of the amount of covered loss. Interest shall be due at the time payment of the overdue claim is made.
Id.
7. Progressive is not liable to ORC for payment of the remainder of the reduced benefits or denied benefits, not because Progressive ha[d] reasonable proof to establish that it was not responsible for payment, but due to the exhaustion of the benefits under Hunt’s policy. That fact notwithstanding, those sums are now, by the plain language of the statutory definition, late. This Court is not aware of any statutory provision or binding case law that suggests that because benefits have been exhausted, a party such as ORC is precluded from recovering the penalties guaranteed by law for late payments. As such, ORC should be allowed the opportunity to have a jury determine whether or not its charges were reasonable, and whether or not Progressive had reasonable proof to reduce or deny its claims. “[I]f the charges are found to be ‘reasonable’ or if a jury decides [Progressive] did not have ‘reasonable proof’ to reduce [ORC’s] bills, [Progressive] is liable for statutory interest on the unpaid sums and attorney’s fees.” Andrews v. Progressive Consumers Ins. Co., 11 Fla. L. Weekly Supp. 851a (Fla. Seminole Cty. Ct. June 2, 2004).
Therefore, it is
ORDERED and ADJUDGED that:
1. Progressive’s Motion for Summary Judgment is hereby GRANTED in part because due to the exhaustion of Hunt’s benefits, Progressive is not liable to ORC for the amounts of any of the payment reductions it made to ORC’s bills for Hunt’s care, nor is Progressive liable to ORC for the amounts of any claims ORC submitted for Hunt’s care that Progressive denied.
2. Progressive’s Motion for Summary Judgment is hereby DENIED in part because ORC may still be entitled to statutory damages for late payment of benefits, including interest and attorney’s fees, and is entitled to an opportunity to prove such at trial.
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