13 Fla. L. Weekly Supp. 367a
Insurance — Personal injury protection — Coverage — Exhaustion of policy limits — Escrow of disputed benefits — Where there is no provision in PIP statute permitting request to reserve disputed benefits, and medical provider is not sure of amount it is requesting be escrowed as request includes unspecified amount of interest, court refuses to exercise discretion to create requirement that insurer escrow any disputed benefits
CHAMBERS MEDICAL GROUP, INC., (as assignee of Wilson Soto), Plaintiff, vs. PROGRESSIVE AUTO PRO INSURANCE COMPANY, Defendant. County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 05-CC-018895. December 16, 2005. Cheryl K. Thomas, Judge. Counsel: Michael P. Liebgold, for Defendant. Roberto R. Alayon, for Plaintiff.ORDER
THIS CAUSE having come on for hearing on the Defendant’s Motion to Strike Plaintiff’s Escrow Request, on December 7, 2005, and the Court being fully advised in the premises, it is hereby,
ORDERED and ADJUDGED
1. The above styled suit was filed pursuant to Fla. Stat. 627.736, Florida’s Personal Injury Protection (“PIP”) statute, alleging that the Defendant insurer did not properly pay for the Plaintiff’s charges for its February 10, 2005 date of service, without claiming that the Defendant owes any specific amount. The Defendant had previously made payment of said charges at what it had determined was a reasonable rate for the Plaintiff’s community pursuant to Fla. Stat. 627.736(5)(a)’s mandate that only reasonable amounts are to be billed a PIP insurer and paid.
2. In addition, the Plaintiff alleges it is owed an unknown and ever-changing amount of interest.
3. The insured who purportedly assigned its benefits to the Plaintiff/provider had coverage of $10,000.00 of PIP benefits pursuant to Fla. Stat. 627.736(1).
4. The Plaintiff has requested that the disputed amount be escrowed pending resolution of this action in its (Exhibit “A”) to the complaint, attached thereto and made part of, which is the very document that the Plaintiff/provider relies upon to give it standing to bring this suit for the insured’s PIP benefits.
5. However, there is no PIP reserve provision under Florida law. Simon v. Progressive Express Insurance Company, 904 So.2d 449, 450, 30 Fla. L. Weekly D1156 (Fla. 4th DCA May 4, 2005). “We decline to create a requirement that an insurance company set aside a ‘reserve’ fund for claims that are reduced or denied. Id., emphasis added.
If we were to accept Simon’s theory that a “reserve” or “hold” provision must be automatically applied to any available funds at the time a claim is submitted, it would result in unreasonable exposure of the insurance company and would be to the detriment of the insured and other providers with properly submitted claims. Under such a theory, all potential payments to a service provider that were denied, or were subject to a reduction, would have to be held in reserve until the statute of limitations period expired or a suit was filed and concluded. This would delay and reduce availability of funds for the payment of claims to other providers and would be inconsistent with the PIP statute’s “prompt pay” provisions. See §§ 627.613, and 627.662(7), Fla. Stat. (provision established to expedite payment to service providers). It is the obligation of insurance companies to attempt to settle as many claims as possible. Farinas v. Florida Farm Bureau General Insurance Co., 850 So.2d 555, 560 (Fla. 4th DCA 2003). It is also a prerogative of insurance companies to pay, reduce, or deny claims. Id. Emphasis added.
6. The PIP statute specifically states that a PIP insurer is required to pay up “to a limit of $10,000.00” in PIP benefits payable at an eighty percent rate. Fla. Stat. 627.736(1), (1)(a) (2003).
7. The PIP statute contains no provision allowing for any amounts, disputed or otherwise, to be escrowed or reserved. Allowing a Plaintiff to demand that a disputed amount of PIP benefits be set aside “is tantamount to allowing the Plaintiff to amend the [PIP] statute.” Ginger L. Chouinard, D.C. d/b/a Chiropractic Café a/a/o Jessica Robinson v. Progressive Express Insurance Company, 10 Fla. L. Weekly Supp. 926c (13th Circ. Hillsborough County Ct., September 25, 2003), see also Celpha Clinic, Inc. a/a/o Sandra Alvarez v. Progressive Express Insurance Company, 11 Fla. L. Weekly Supp. 113a (13th Circ. Hillsborough County Ct., December 18, 2003), Naresh B. Dave, M.D., a/a/o Maria Martinez v. Progressive Express Insurance Company, 10 Fla. L. Weekly Supp. 834a (13th Circ. Hillsborough County Ct., August 5, 2003), Sapien Diagnostics, Inc., d/b/a Sapien Health Network, a/a/o Gerald Erickson v. Progressive Express Insurance Company, 10 Fla. L. Weekly Supp. 1036a (13th Circ. Hillsborough County Ct., September 30, 2003), Chiropractic Center of Lakeland, Inc., a/a/o Monica Williams v. Progressive Express Insurance Company, 11 Fla. L. Weekly Supp. 248b (13th Circ. Hillsborough County Ct., January 7, 2004), H.G. Smith, D.C., P.A. a/a/o Javadga Fountain v. Southern Group Indemnity, Inc., 11 Fla. L. Weekly Supp. 248a (13th Circ. Hillsborough County Ct., January 7, 2004).
8. As this Judge Huey stated in Celpha:
This Court is unaware of any statutory or common law right of an insured to demand that PIP benefits be escrowed. To the contrary, it has consistently found that such right could never exist because, if it did, it would constitute a rewrite of the PIP statutes the effect of which would collapse the PIP scheme. Such a right would essentially anoint the health care provider as legislature and governor with authority at the stroke of a pen to alter the PIP carrier’s duty. For example, insured within one day after a car accident obtained the services of 10 different health care providers, each of whom obtained assignments and submitted bills to the insured’s PIP carrier. Either at the time of billing or at the time of receipt of insufficient payment each demands that PIP benefits be escrowed. Assume that the facts are such that if the carrier complies with any of the 10 escrow demands, it will not be able to pay the other claims in full in accordance with its statutory duty. With which escrow demand should the carrier comply? Why should one provider via a one sentence escrow demand letter have the authority to require the carrier to litigate with the nine other health care providers? What if the escrow demand is baseless, do the nine other providers get to sue the one for interference with a contractual right or some other cause of action? Should the actions be consolidated? Does the carrier and each of the other providers have a right to bring a declaratory judgment action on the escrow demand? Are statutory attorney fees allowed in all these actions? Is there an “American Rule” or an “English Rule” that governs the priority of escrow demand letters? Should the carrier prioritize by the receipt date of the first escrow demand or should it relate back to the time of the filing of the claim? The examples and questions are limitless. The Court believes the legislature understood these issues when it wrote and repeatedly revised the PIP law providing no right for an insured or his assigns to demand escrowing benefits. Emphasis added.
9. One purpose of the PIP statute is for the relatively quick and efficient payment of reasonable and necessary charges. Escrow requests such as the Plaintiff’s could potentially thwart this policy by withholding benefits payments for providers’ charges that are in compliance with the PIP statute, in the event of the mere chance that the requestor wins its PIP suit.
10. Plaintiff’s aforementioned reserve request to reserve the amount in dispute is a de facto general request, as it is also claiming interest on the disputed amount. The interest claimed is a non-specific, amorphous and dynamic amount.
11. The Plaintiff appears to be unsure even what underlying amounts are at issue in its suit.
12. The Plaintiff’s aforementioned reserve requests also lack enough specificity for an insurer such as the Defendant to act on them because the requests put the insurer at risk of breaching its contract to the insured. “For example, if the insurer errs by escrowing too much, it may fail to pay legitimate claims, and if too little, it puts itself at risk with respect to the one on whose behalf the escrow request was being made. It is effectively a no-win situation for the insurer.” Vincent DiCarlo, M.D. & Associates a/a/o Bonita Thurston v. American Home Assurance Co., 11 Fla. L. Weekly Supp. 305b (Circuit Court Appellate, 13th Circ. Hillsborough County, January 20, 2004), see also Advanced Imaging Group, Inc. a/a/o Frank Midulla v. Progressive Auto Pro Insurance Company, 11 Fla. L. Weekly Supp. 569d (13th Circ. Hillsborough County Ct., April 16, 2004).
13. There is no provision in the PIP statute even permitting a reserve request.
14. Permitting such escrow requests as the Plaintiff’s equates to rewriting the PIP statute. The legislature has obviously seen fit not to permit PIP reserve requests or else it would have written such a provision into the PIP statute, as the PIP statute has been amended numerous times since its original adoption in 1971.
15. Such reserve requests may put the Defendant in the position of possibly breaching its contract with the insured and possibly causing the violation of the PIP statute by potentially causing it not to provide the required amount of PIP benefits to providers who have billed for reasonable and necessary related charges.
16. Senate Bill 32-A promulgated by the 2003 Florida Legislature, details the policy and goals of the PIP Statute, and more particularly, the 2003 version of the PIP statute.
17. “However, the goals behind the adoption of the no-fault law in 1971. . .to reduce the volume of lawsuits by eliminating minor injuries from the tort system, and to reduce overall motor vehicle costs, have been significantly compromised due to the fraud and abuse that has permeated the PIP insurance market. SB 32-A § 1(2)(c). Emphasis added.
18. “. . . [T]he system has become increasingly litigious with attorneys obtaining large fees by litigating, in certain instances, over relatively small amounts that are in dispute.” SB 32-A § 1(2)(e). Emphasis added.
19. “It is further a matter of great public importance that, in order to protect the public’s health, safety, and welfare, it is necessary to enact the provisions contained in this act in order to prevent PIP insurance fraud and abuse ant to curb escalating medical, legal, and other related costs, and the Legislature finds that the provisions of this act are the least restrictive actions necessary to achieve this goal.” SB 32-A § 1(2)(h). Emphasis added.
20. Permitting reserve requests such as the Plaintiff’s would actually serve to generate more PIP litigation as other providers who have submitted reasonable, necessary and related charges may not get timely paid as the insured’s finite and limited pool of PIP benefits would be not made available until this suit is resolved. Those other providers would then potentially be able to sue the Defendant PIP insurer for late payment. At the very least they might be entitled to the PIP penalty provision of Fla. Stat. 627.736(11). These penalties would be made necessary by the requests such as the Plaintiff’s subject escrow requests. As stated above, the legislature sought to decrease the amount of litigation and costs when it passed the 2003 version of the PIP statute. . . .such a reserve requirement would contravene that stated policy by spurring more needless litigation and costs.
21. Such a reserve request is also tantamount to the insured unilaterally rewriting the contract for the policy of insurance. It is a basic tenet of contract law that a change to a term of a contract must be agreed to by all parties to the contract. “Modifications of contracts must be supported by new consideration as well as the consent of both parties.” Newkirk Constr. Corp. v. Gulf County, 366 So.2d 813, 815 (Fla. 1st DCA 1979), Wilson v. Odom, 215 So.2d 37, 39 (Fla. 1st DCA 1968). The Defendant has not agreed to such a change in its contract with the insured, nor has any additional consideration been agreed to and exchanged.
22. Such reserve requests would thwart a stated policy of the PIP statute which is to ensure the prompt and efficient payment of covered charges.
23. Furthermore, as demonstrated above, the Plaintiff is not even sure of the amount it is requesting to be escrowed as it has also demanded an unspecified interest amount in its complaint. The Plaintiff’s general reserve requests lack the specificity needed to place the Defendant insurer on proper notice of what should be reserved.
24. As the PIP statute is silent as to the escrow of disputed PIP benefits, this Court has discretion to decide whether a party should be required to escrow PIP benefits. However, for the reasons stated in this Order, this Court refuses to exercise that discretion to create a requirement that the Defendant PIP insurer escrow disputed PIP benefits.
WHEREFORE, the Defendant’s Motion to Strike Plaintiff’s Escrow Request is GRANTED in its entirety, and the Defendant, therefore, is not required to escrow any disputed PIP benefits whatsoever.
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