13 Fla. L. Weekly Supp. 90a

Insurance — Personal injury protection — Claims — Countersignature — Failure of insured to countersignature HCFA forms did not constitute reasonable proof that insurer was not responsible for paying bills submitted by medical provider — Coverage — Medical expenses — Reasonable, related and necessary treatment — Insurer could not rely on peer review report to deny or reduce charges where report was not obtained prior to denying or reducing bills, but when bills were already 5 to 11 months overdue — Argument that insurer did not withdraw payment of bills because it made some reduced payments is without merit since withholding payment of benefits is indistinguishable from withdrawing payments — Further, insurer could not rely on peer review report to create issue of material fact where report is inadmissible hearsay and lacks trustworthiness — Deposition testimony of claims adjuster cannot create issue of material fact as to whether medical treatment was reasonable, related and necessary — Summary judgment granted in favor of provider

ALL FAMILY CLINICS OF DAYTONA BEACH, INC., d/b/a FLORIDA MEDICAL ASSOCIATES, as assignee for ANGELA LUNA, Plaintiff, vs. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2004 32084 COCI, Division 82. October 28, 2005. H. Pope Hamrick, Judge. Counsel: Luis R. Gracia, Rue & Ziffra, P.A., Port Orange, for Plaintiff. Sean Amorginos, Luks, Santaniello, Perez, Petrillo & Gold, for Defendant.

ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

THIS CAUSE having come on to be heard upon the Plaintiff’s Motion for Summary Judgment, and this Court, upon hearing argument of counsel and being otherwise fully advised in this matter, makes the following findings of fact and law:

FINDINGS OF FACT

1. On or about March 17, 2003 Angela Luna was involved in an automobile accident wherein she was rear-ended by a semi truck and suffered bodily injuries.

2. At all times material to her accident, Ms. Luna was insured with the Defendant, UNITED AUTOMOBILE INSURANCE COMPANY (hereafter UNITED AUTOMOBILE), under a policy of insurance which provided coverage including personal injury protection benefits as required by Florida’s Motor Vehicle No-Fault Law. Specifically, the policy provided for $10,000.00 in benefits and contained a $2,000.00 deductible.

3. As a result of her injuries, Ms. Luna underwent medical treatment under the care of the Plaintiff, ALL FAMILY CLINICS OF DAYTONA BEACH, INC., d/b/a/ FLORIDA MEDICAL ASSOCIATES (hereafter ALL FAMILY CLINICS).

4. As part of Plaintiff’s practice, Ms. Luna executed a valid Assignment of Benefits in favor of ALL FAMILY CLINICS.

5. ALL FAMILY CLINICS provided medical treatment to Ms. Luna beginning on March 19, 2003 through February 4, 2004. Specifically, the dates of service for which the Plaintiff billed the Defendant were 03/19/03, 03/25/03, 03/25/03, 03/27/03, 04/24/03, 07/03/03, 07/08/03, 08/14/03, 09/16/03, 02/03/04 and 02/04/04. At all times material hereto, the Plaintiff timely billed the Defendant for said dates of service. The total bills submitted by the Plaintiff for payment totaled $4,318.72.

6. UNITED AUTOMOBILE received said charges but originally contested the validity of the bills based on the fact that the insured did not countersign the HCFA forms upon which the bills were submitted. The Defendant has apparently abandoned said defense.

7. On October 10, 2003 the Defendant then requested the insured to submit to an Examination Under Oath (EUO), which actually took place on February 24, 2004.

8. However, prior to the above mentioned EUO, the Defendant contracted the services of Dr. Peter Millheiser, an orthopedic doctor, to perform a records’ review (peer review) of the insured’s treatment. Said peer review took place on February 21, 2004, over 11 months after Ms. Luna’s automobile accident and 3 days before her EUO.

9. After the peer review, Dr. Millheiser prepared a report stating that all of the charges billed by the Plaintiff for the medical treatment provided to Ms. Luna were either not reasonable, necessary or related to the insured’s accident of March 17, 2003.

10. The Defendant relied on and used the peer review report to deny or reduce the bills. The reduced charges were applied towards the policy’s $2,000.00 deductible resulting in the Defendant paying nothing for any of the treatment rendered by the Plaintiff to Ms. Luna.

11. On or about May 26, 2004, the Plaintiff filed suit against the Defendant seeking payment for the medical treatment it provided to Defendant’s insured.

12. On May 25, 2005, the Plaintiff filed the sworn affidavits of Ms. Luna’s main treating physician, Dr. Frank Alvarez and Plaintiff’s office and billing manager, Tonya Browning, to support its contention that the bills submitted to UNITED AUTOMOBILE were reasonable, necessary and related to the insured’s automobile accident of March 17, 2003.

13. Plaintiff now moves for Summary Judgment arguing that there are no issues of material fact as to whether the bills it submitted to the Defendant for treatment rendered to Defendant’s insured are reasonable, necessary and related to the insured’s automobile accident and that Defendant has no reasonable proof to show that it is not responsible for the payments. The Plaintiff bases its position on the sworn affidavits of the insured’s treating physician and Plaintiff’s billing manager as well as on the argument that the peer review report used by the Defendant to ultimately deny and reduce its medical bills fails to comport with the requirements of Florida law.

14. The Defendant contends that issues of material fact remain as to whether it had reasonable proof to deny or reduce Plaintiff’s charges based on Dr. Millheiser’s peer review report finding the bills to be not reasonable, necessary or related to the insured’s automobile accident in addition to the testimony of Laura Gracia, one of the adjusters handling the claim, stating that she believed that the bills were not reasonable, necessary or related to the accident based on the above mentioned peer review report.

CONCLUSIONS OF LAW

15. After argument of counsel and a review of Florida law and the cases submitted for consideration in this matter, the court agrees with Plaintiff that there are no issues of material fact and it is entitled to Summary Judgment as a matter of law.

16. First, the court notes that the purpose of the Florida No-Fault statute is to “provide swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption”. Ivey v. Allstate Ins. Co., 774 So.2d 679 (Fla. 2000).

17. In this case, the evidence shows that Defendant first contested the medical bills based on the above mentioned countersignature defense. Prior to the Plaintiff filing the present Motion for Summary Judgment, it filed a motion to amend its complaint to add a count for punitive damages based on the allegation that the Defendant exhibited a pattern and practice of bad faith in denying payment of medical bills based on the position that the bills had to be so countersigned. The Plaintiff presented evidence that virtually every court that has adjudicated that matter has rejected Defendant’s position. As part of that evidence, the Plaintiff cited the case of Star Casualty v. U.S.A. Diagnostics, 855 So.2d 251 (Fla. 4th DCA 2003), wherein the Fourth District Court of Appeal decided not to exercise its discretionary jurisdiction to hear an appeal dealing with the countersignature issue based on the “plethora” of courts that had consistently ruled that no insured’s countersignature was required on the bill after an assignment of benefits was obtained by the provider. The Plaintiff noted that the Star Casualty decision incorporated a number of cases, many of them involving the Defendant, rejecting Defendant’s countersignature defense. As part of the present motion for Summary Judgment, and in order to further document its position, the Plaintiff has presented more cases involving the Defendant wherein the countersignature defense was held to be invalid.

18. On July 28, 2005 this court granted Plaintiff’s motion to amend its complaint to add a count of punitive damages as it agreed with the rest of the courts that have held Defendant’s countersignature defense and argument to be meritless. The court hereby sustains and affirms its prior ruling and holds that Defendant’s countersignature defense did not constitute “reasonable proof” to show that UNITED AUTOMOBILE was not responsible for paying the bills submitted by the Plaintiff as provided by Florida Statute 627.736(4)(b).

19. The Plaintiff also argues that the peer review report relied upon by the Defendant to ultimately deny and reduce the bills at issue in this case was not a valid report as it was prepared in violation of Florida Statute 627.736(7)(a). Further, the Plaintiff argues that such report is hearsay and lacks trustworthiness and it does not even contain all the medicals bills submitted by the Plaintiff. The court agrees with Plaintiff’s argument.

20. Section 627.736(7)(a) states in relevant part as follows:“An 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 valid 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. A valid report is one that is prepared and signed by the physician examining the injured person or reviewing the treatment records of the injured person and is factually supported by the examination and treatment records if reviewed and that has not been modified by anyone other than the physician.”

21. Plaintiff points out that the peer review prepared by Dr. Millheiser in this case was done 11 months after the insured’s accident when all of the bills submitted by the Plaintiff to the Defendant in 2003 were already between five and almost 11 months overdue. Plaintiff argues that the Defendant could not rely on Dr. Millheiser’s report to deny and reduce charges without first obtaining such report prior to denying or reducing payment of the bills. The clear language of the statute, as well as the cases interpreting it, supports Plaintiff’s position.

22. Although Florida law does not require a PIP insurer to secure a written medical report as a condition precedent to contest medical bills on the grounds of reasonableness, necessity or relatedness, see United Automobile Insurance Company v. Rodriguez, 808 So.2d 82 (Fla. 2001) and Allstate Indem. Co. v. Derius, 773 So. 2d 1190 (Fla. 4th DCA 2000), if the PIP carrier chooses to contest the reasonableness, necessity or relatedness of such bills and submits them to a peer review, such peer review report has to be obtained prior to the insurer’s denial or reduction of the bills. See Derius v. Allstate Indem. Co., 723 So.2d 271 (Fla. 4th DCA 1998), holding that section 627.736(7)(a) “sets up a procedural requirement that an insurer cannot withdraw payment of a treating physician unless the decision is supported by an expert that the treatment does not comply with the statutory criteria. If the insurer were to act without complying with such a procedural requirement, any termination of payment would be ineffective”. Further, see Justice Pariente’s concurring opinion in United Automobile Insurance Company v. Rodriguez, supra, wherein she explained that Section 627.736(7)(a) “requires a PIP insurer to obtain a medical report as a condition precedent to withdrawing benefits”. Id. at 89.

23. Accordingly, this court finds that Dr. Millheiser’s peer review report, prepared at the request of the Defendant over 11 months after the insured’s accident and at least five months after the last medical bills submitted by the Plaintiff in 2003 were due, is not a valid report pursuant to Section 627.736(7)(a) and does not constitute “reasonable proof” that the Defendant is not responsible for paying the bills. Further, the report did not even include bills for the dates of service of 02/03/04 and 02/04/04. The court agrees with the Plaintiff that the report was not valid as to those dates of service as it did not address them. In any case, the court’s holding against the validity of the report is true for those two dates of service also since the Defendant failed to pay said bills without obtaining the peer review report prior to its denial of them.

24. Defendant’s contention that it did not “withdraw” payment of all the bills since it reduced some of them is not well taken. To withhold payment of an insured’s benefits is indistinguishable from withdrawing payments. See Eduardo J. Garrido, D.C., P.A. v. United Automobile Insurance Company, 12 Fla. L. Weekly Supp. 372a (Fla. Miami-Dade Cty. Ct. 2005), wherein UNITED AUTOMOBILE argued that it did not withdraw payment since it never paid any of the bills. In this case it is clear that the insurer withdrew payment of the Plaintiff’s medical bills since it either did not pay at all for them or did not pay the amount billed.

25. The court also agrees with Plaintiff’s contention that Dr. Millheiser’s peer review report is hearsay and it lacks trustworthiness. A report obtained by an insurer under Section 627.736(7) is inadmissible hearsay. McElroy v. Perry, 753 So.2d 121 (Fla. 2d DCA 2000). Further, Dr. Millheiser was hired to prepare the report on behalf of the Defendant. Thus, the carrier’s motivation for requesting the report was a financial one placing the report within the category of those records in which “the sources of information or other circumstances show lack of trustworthiness.” Id. As a result, the court finds that the Defendant could not create an issue of material fact by relying on an inadmissible report.

26. Defendant then argues that the deposition testimony of Laura Gracia, one of Defendant’s adjusters who handled the claim, stating that she believed the bills not to be reasonable, necessary or related to Ms. Luna’s automobile accident based on Dr. Millheiser’s peer review is enough to create an issue of material fact in the case. However, the court agrees with Plaintiff’s argument, substantiated by the case of Nelson Milian v. United Automobile Insurance Company, 12 Fla. L. Weekly Supp. 249a (Fla. Miami-Dade Cty. Ct. 2004), citing United Automobile Insurance Company v. Neurology Assoc. Group, 11 Fla. L. Weekly Supp. 204 (11th Circ. App., 2004), that “the testimony of a claims adjuster can hardly address whether medical treatment was reasonable, related to the accident or medically necessary”. Therefore, the court finds that the adjuster’s testimony in this case does not create an issue of material fact as to whether the bills submitted by the Plaintiff were reasonable, necessary or related to the insured’s automobile accident of March 17, 2003.

27. “A movant for Summary Judgment must demonstrate, by admissible and competent evidence, nonexistence of a genuine issue of material fact.” Dutilly v. Department of Health and Rehabilitative Services, 450 So. 2d 1195 (Fla. 5th DCA 1984). As stated above, the Plaintiff submitted the sworn affidavits of the insured’s treating physician and its office/billing manager stating that the bills at issue were reasonable, necessary and related to the insured’s motor vehicle accident. The court hereby finds that the Plaintiff has met its burden of demonstrating the nonexistence of issues of material fact. As a result, in order to create any issues of material fact as to whether the subject medical expenses were reasonable, necessary or related to the accident, the Defendant had to substantially impeach the medical testimony of the insured’s treating physicians, or present countervailing competent evidence from a licensed physician. See Milian, supra, citing Williamson v. Superior Insurance Co., 746 So. 2d 483 (Fla. 2d DCA 1999), Holmes v. State Farm Mutual Automobile Insurance, 624 So.2d 824 (Fla. 2d DCA 1993) and Jarrell v. Churm, 611 So. 2d 69 (Fla. 4th DCA 1992). No such admissible, competent and countervailing evidence has been presented by the Defendant.

28. At the time of the Plaintiff’s motion hearing the undisputed evidence of record showed that the Plaintiff had submitted medical bills to the Defendant in accordance with the Florida No-Fault law, that the Defendant denied payment of the bills based on a meritless defense and that it then secured a peer review report after the bulk of the bills had been overdue for a significant period of time. The Defendant decided to contest the bills by submitting them to a medical peer review, however, without first obtaining the peer review report as provided by section 627.736(7)(a), it either totally or partially withdrew payment of the bills. Finally, the testimonies of the insured’s treating physician and Plaintiff’s office/billing manager have not been impeached and no admissible, competent and countervailing evidence has been introduced by the Defendant. Therefore, the court finds that the medical treatment rendered by the Plaintiff to Defendant’s insured, as well as the medial bills submitted by the Plaintiff to the Defendant as a result of said treatment are reasonable, necessary and related to the insured’s automobile accident of March 17, 2003. The court holds that as a matter of law the Defendant did not have any reasonable proof to establish that it was not responsible for paying the medical bills in this case. Consequently, the Plaintiff is entitled to Summary Judgment.

29. Accordingly, Plaintiff’s Motion for Summary Judgment is hereby GRANTED. The Defendant, UNITED AUTOMOBILE INSURANCE COMPANY, shall pay Plaintiff’s medical bills so payable at 80% plus interest as required by statute. The court reserves jurisdiction to enter Final Judgment on attorneys’ fees and costs.

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