14 Fla. L. Weekly Supp. 180a
Insurance — Personal injury protection — Demand letter — Sufficiency — Where medical provider is disputing full amount of claims submitted, and insurer made no payments at all on claims, provider was only required to submit either an itemized statement specifying amount, date of treatment and type of benefit claimed to be due or HCFA forms to fulfill statutory demand letter requirements — Where provider’s demand letter included both itemized statement and HCFA forms, and insurer’s failure to provide response indicating that demand letter was not in compliance breached PIP contract and statute, affirmative defense regarding sufficiency of demand letter is stricken
RAPID REHABILITATION, INC., (Verona A. Graham, Patient), Plaintiff, vs. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 06-02648 COCE 55. December 4, 2006. Eric Beller, Judge. Counsel: Andrew J. Weinstein, Weinstein & Associates, P.A., Coral Springs, for Plaintiff. Kelly Eckley, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION TO STRIKE FIRST AFFIRMATIVE DEFENSE REGARDING SUFFICIENCY OF DEMAND LETTER
THIS CAUSE came before the Court on August 28, 2006 for hearing of Plaintiff’s Motion to Strike Defendant’s Answer and Affirmative Defenses; the Court having reviewed the Motion and entire court file; heard arguments; reviewed relevant legal authorities; and been sufficiently advised on the premises, the Court finds as follows:
Background:
1. The above styled cause of action arises out of a claim for unpaid personal injury protection benefits.
2. The claimant, Verona Graham, received medical treatment from the Plaintiff as a result of injuries sustained in a motor vehicle accident.
3. The Plaintiff rendered medical treatment to the claimant from May 12, 2004 through June 14, 2004.
4. The Plaintiff submitted claims for insurance benefits, all of which were timely submitted and received by the Defendant.
5. Defendant failed to provide insurance benefits, a payout sheet and/or an explanation of benefits indicating to the Plaintiff any reason why its claims were not satisfied.
6. Plaintiff sent Defendant a demand letter on December 1, 2004. Defendant failed to either respond or address Plaintiff’s Demand Letter until filing their Answer and Affirmative Defenses on February 28, 2006, over one year later.
7. Defendant’s first Affirmative Defense, contained in its Answer and Affirmative Defenses, states in relevant part, “Plaintiff failed to meet all conditions precedent prior to filing of the law suit in that Plaintiff has failed to furnish Defendant with statutory notice pursuant to Florida Statute § 627.736(11). The demand letter is improper in this case as it only attached the HCFAs and did not delineate the exact amount overdue at 80% minus the deductible.”
8. Pursuant to F.R.C.P. 1.140, Plaintiff filed a Motion to Strike Defendant’s Answer and Affirmative Defenses.
Conclusions of Law:
9. Florida Statute § 627. 736(11) is the controlling authority on this issue and it states:
(a) As a condition precedent to filing any action for benefits under this section, the insurer must be provided with written notice of an intent to initiate litigation. Such notice may not be sent until the claim is overdue, including any additional time the insurer has to pay the claim pursuant to paragraph (4)(b).
(b) The notice required shall state that it is a “demand letter under 627.736(11)” and shall state with specificity:
1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured.
2. The claim number or policy number upon which such claim was originally submitted to the insurer.
3. To the extent applicable, the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due. A completed form satisfying the requirements of paragraph (5)(d) or the lost-wage statement previously submitted may be used as the itemized statement. To the extent that the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, the claimant shall attach a copy of the insurer’s notice withdrawing such payment and an itemized statement of the type, frequency, and duration of future treatment claimed to be reasonable and medically necessary.
(c) Each notice required by this subsection must be delivered to the insurer by United States certified or registered mail, return receipt requested. Such postal costs shall be reimbursed by the insurer if so requested by the claimant in the notice, when the insurer pays the claim. Such notice must be sent to the person and address specified by the insurer for the purposes of receiving notices under this subsection. Each licensed insurer, whether domestic, foreign, or alien, shall file with the office designation of the name and address of the person to whom notices pursuant to this subsection shall be sent which the office shall make available on its Internet website. The name and address on file with the office pursuant to s. 624.422 shall be deemed the authorized representative to accept notice pursuant to this subsection in the event no other designation has been made.
(d) If, within 15 days after receipt of notice by the insurer, the overdue claim specified in the notice is paid by the insurer together with applicable interest and a penalty of 10 percent of the overdue amount paid by the insurer, subject to a maximum penalty of $250, no action may be brought against the insurer. If the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, no action may be brought against the insurer if, within 15 days after its receipt of the notice, the insurer mails to the person filing the notice a written statement of the insurer’s agreement to pay for such treatment in accordance with the notice and to pay a penalty of 10 percent, subject to a maximum penalty of $250, when it pays for such future treatment in accordance with the requirements of this section. To the extent the insurer determines not to pay any amount demanded, the penalty shall not be payable in any subsequent action. For purposes of this subsection, payment or the insurer’s agreement shall be treated as being made on the date a draft or other valid instrument that is equivalent to payment, or the insurer’s written statement of agreement, is placed in the United States mail in a properly addressed, postpaid envelope, or if not so posted, on the date of delivery. The insurer shall not be obligated to pay any attorney’s fees if the insurer pays the claim or mails its agreement to pay for future treatment within the time prescribed by this subsection.
(e) The applicable statute of limitation for an action under this section shall be tolled for a period of 15 business days by the mailing of the notice required by this subsection.
(f) Any insurer making a general business practice of not paying valid claims until receipt of the notice required by this subsection is engaging in an unfair trade practice under the insurance code.
10. Plaintiff’s demand letter does in fact meet all of the statutory requirements under §627.736(11), in that Plaintiff included an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit, Plaintiff also provided the Defendant with HCFAs which were properly completed and satisfied the requirements of paragraph (5)(d). The statute provides that either the itemized statement or the HCFA satisfies the requirement. Open MRI of Miami-Dade, Ltd. a/a/o Joseph Vincent v. Progressive Express Insurance Co., No. 049201 (Fla. 11th Cir. Ct. Dec. 25, 2005). In this case, the Plaintiff provided both.
11. At no time did Defendant provide the Plaintiff with any response or a PIP payout log, indicating that said demand letter was not in compliance. Therefore, Plaintiff was not given the opportunity to address the Defendant’s reasons for nonpayment. Instead more than one year passed before Defendant raised the allegations of a defective demand letter allowing the parties and the court to expend unnecessary time and money.
12. Pursuant to §627.736(5): “if the insurer determines that it has been improperly billed, the insurer shall notify the insured.” Id.
13. Defendant’s failure to provide the Plaintiff with any notification is a breach of the insurance policy contract. United Automobile Insurance Company v. R.J. Trapana, M.D. P.A., 12 Fla. L. Weekly Supp. 452a (2005). “The insurer’s obligation to provide an itemized statement is clear. United Automobile’s failure to provide the required specification resulted in a breach of its obligations. . .” Id.
14. Defendant may also be in violation of Florida Statute §627.4261(1)(a), which states in pertinent part:
“upon insurer’s receiving communication with respect to a claim, the insurer shall, within 14 calendar days, review and acknowledge receipt of such communication unless payment is made within that period of time or unless the failure to acknowledge is caused by factors beyond control of the insurer which reasonably prevents such acknowledgment”.
15. Defendant was obligated by its statutory and contractual duties to provide Plaintiff with notification and reasons for nonpayment, and failure to do so is a breach of the insurance policy. It is an “accepted principle of law that when parties contract upon a matter which is the subject of statutory regulation, the parties are presumed to have entered into their agreement with reference to such statute, which becomes part of the contract.” Foundation Health v. Westside EKG Associates, Nos. SC05-870 (Fla. 2006), [31 Fla. L. Weekly S669b].
16. Defendant’s failure to provide a PIP log in response to the specific request made in the demand letter further reinforces this argument. “Requiring PIP insurers to provide assignee health care providers with the payout logs before the latter file suit makes eminent common, good sense on public policy grounds. . . . Frivolous, unnecessary litigation may thus be avoided. To rule otherwise would place a provider in the untenable ‘Catch-22′ position of having to sue when it is in the dark,” Integra Diagnostics v. Reliance National Indemnity Company, 8 Fla. L. Weekly Supp. 394c (Fla. 17th Cir. Ct. Mar. 14, 2001).
17. In support of its position, the Defendant relies on the following cases: Urgent Care Center v. Progressive Ins. Co., 12 Fla. L. Weekly Supp. 673b; Mandarin Chiropractic v. Progressive Ins. Co., 12 Fla. L. Weekly Supp. 564b; Universal Health Care Center v. Progressive Express Insurance Co., 11 Fla. L. Weekly Supp. 932b (2004); T&R Rehabilitation Professional Corp. v. Insurance Corporation of NY, 12 Fla. L. Weekly Supp. 1085a (2005); Rose Radiology v. State Farm, 13 Fla. L. Weekly Supp. 729a (2006). All of these cases are distinguishable from the instant claim, in that partial payments were made and/or charges were reduced, neither of which occurred in the instant claim. The cases relied on by the Defendant specifically hold that providing HCFAs or an itemized statement without further explanation as to what is being claimed is not sufficient only when the Plaintiff is not claiming the full amount.
18. The Plaintiff demanded the full amount set forth in the claims submitted and therefore Plaintiff needed only to attach either the HCFAs or an itemized statement to satisfy the statutory requirements. See Open MRI of Miami-Dade, Ltd. a/a/o Joseph Vincent v. Progressive Express Insurance Co., No. 04-9201 (Fla. 11th Cir. Ct. Dec. 25, 2005); Chiro-Medical Rehabilitation of Orlando, Inc. v. Progressive Express Insurance Company, 12 Fla. L. Weekly Supp. 162b (2004).
19. When the Plaintiff is claiming the full amount of benefits the insurer is in a better position to determine the amount due because the insurer possesses all policy information including but not limited to the applicable deductibles. “The court notes that an insurer, such as the Defendant, which retains records as to the amounts paid, the total amounts of bills received, the manner in which bills have been applied to the deductible, and the remaining insurance limits, is possessed of greater knowledge with regard to any given PIP claim as compared to an insured or medical provider. . .” Id.
20. The purpose of the no-fault statute is to provide swift, virtually automatic payment of automobile injuries without regard to fault. Dunmore v. Interstate Fire Ins. Co., 301 So.2d 502 (Fla. 1st DCA, 1974); cited with approval in Amador v. United Auto. Ins. Co., 748 So.2d 307 (Fla. 3rd DCA, 1999); see also Ivey v. Allstate Insurance Co., 774 So.2d 679 (Fla. 2000).
21. The public policy behind the pre-suit demand requirement found with Section 627.736(11), Fla. Stat., is to permit a pre-suit investigation and to facilitate prompt resolution and settlement of claims, thereby avoiding litigation. Open MRI of Miami-Dade, Ltd. a/a/o Joseph Vincent v. Progressive Express Insurance Co., No. 049201 (Fla. 11th Cir. Ct. Dec. 25, 2005); See generally Patry v. Capps, 633 So.2d 9 (Fla. 1994); See also Rabinowitz v. Town of Bay Harbor Islands, 178 So.2d 9 (Fla. 1965).
22. Plaintiff is disputing the full amount of the claims submitted, and no payments have been made at all, therefore Plaintiff is only required to submit either an itemized a statement or HCFA forms to fulfill the demand letter requirements under Florida Statute § 627.736(11).
Accordingly, it is ORDERED AND ADJUDGED, that Defendant’s First Affirmative Defense is stricken with prejudice.
