14 Fla. L. Weekly Supp. 835a
Insurance — Personal injury protection — Discovery — Software used to reduce medical bills — Appeals — Insurer asserting certiorari challenge to order compelling production of information and documents pertaining to software and database used to reduce medical bills has not shown that discovery order will cause irreparable or material harm where insurer has option to use evidence other than computer program to support defense that amounts charged exceed reasonable amounts for services rendered — Trial court did not depart from essential requirements of law in ordering insurer to produce underlying data upon which it based determination of reasonable charge where order does not state absolute requirement that insurer produce materials allegedly not in its possession, but merely establishes condition that if insurer wants to use program and database in defense it must produce requested discovery — No merit to argument that medical provider is not entitled to discovery on issue because burden to prove reasonableness of charges is on provider, not insurer, where insurer raised excessiveness of charges as affirmative defense
SENTRY CASUALTY COMPANY, Petitioner, vs. 1st HEALTH, INC., as assignee of ERNESTO IBARRA, Respondent. Circuit Court, 12th Judicial Circuit (Appellate) in and for Sarasota County. Case No. 2006-CA-10565-NC, Division A. L.C. Case No. 2005-SC-6140-NC. July 10, 2007. Petition for Writ of Certiorari from the Sarasota County Court, Kimberly C. Bonner, County Judge, and Judy Goldman, County Judge. Counsel: Douglas H. Stein, Anania, Bandklayder, Blackwell, Baumgarten, Torricella & Stein, Miami, for Petitioner. Thomas Andrew Player, Weiss Legal Group, P.A., Maitland, for Respondent.
OPINION
[Editor’s note: County court order published at 13 Fla. L. Weekly Supp. 1210a]
(BOB McDONALD, J.) Petitioner, Sentry Casualty Company, the Defendant below, seeks review of the trial court’s “Order Granting Plaintiff’s Motion to Compel Better Responses to Discovery”, entered October 4, 2006 [13 Fla. L. Weekly Supp. 1210a]. The Court has reviewed proposed Opinions submitted by the parties. With a minor change, the Court accepts and adopts the Opinion submitted by 1st Health, Inc. This Court is mindful of the concept of law pertaining to a court adopting one party’s proposed order verbatim. (See Perlow v. Berg-Perlow, 875 So. 2d 383 (Fla. 2004) and T.D. vs. DCF, 924 So. 2d 827 (Fla. 2d DCA 2005).) In this instance, however, the proposed order adopted reflects this Court’s opinions, findings, and the law. Additionally, the opposing party was given an opportunity to submit their own proposed order. This Court has made its own thoughtful and independent analysis. Under the circumstances, no valid purpose would be served by simply “rewording” the adopted proposed order.FACTS
1st Health sued Sentry on November 10, 2005, for breach of contract after Sentry reduced payment for certain charges submitted to Sentry for treatment rendered to its insured, Ernesto Ibarra, for injuries sustained in an automobile accident which occurred on January 28, 2005. Ibarra sought treatment for his injuries from 1st Health and assigned his personal injury protection benefits thereto. 1st Health alleged that the reductions made by Sentry were wrongful and violated § 627.736, Fla. Stat. (2005), which requires that an insurer pay personal injury protection benefits at eighty percent of all reasonable expenses for medically necessary health care services related to a bodily injury, arising out of the ownership, maintenance, or use of a motor vehicle.
1st Health conducted discovery to determine how and why Sentry took the reductions and denials to the bills at issue herein. By deposition of Sentry’s adjuster Stacey Ellis, 1st Health learned that the sole basis for the reductions and denials was Sentry’s reliance on a computer program licensed to Sentry by non-party Mitchell Medical, which in turn utilizes a database provided by non-party Ingenix. 1st Health served a request for admissions, interrogatories, and a request to produce seeking information related to the software system and database Sentry relied upon in making its decision to pay less that 80% of the amount billed by 1st Health. Sentry did not produce any documents and objected to 1st Health’s discovery directed to the Mitchell Medical software based upon attorney-client privilege, work product privilege, and an assertion of trade secret protection. 1st Health moved to compel better responses to the discovery requests, and on July 28, 2006 the trial court ordered Sentry to make a proffer of evidence to the court and to 1st Health showing the information Sentry’s witnesses will be able to testify to regarding the Mitchell Medical software and the data used in adjusting the subject bills. The proffer from Sentry included only a transcript of a deposition of Michelle Iacobacchi, a corporate representative of Mitchell Medical, from an unrelated case, and a statistical summary and charge distribution graphs from Ingenix, the company that supplies the database utilized by the Mitchell Medical software.
On September 7, 2006, a subsequent hearing on 1st Health’s motion to compel better responses was held, wherein 1st Health argued that Sentry’s evidence proffer was not responsive to 1st Health’s discovery requests and failed to indicate what Sentry was willing to produce; that the proffer only gave an incomplete summary of Ingenix’s statistical analysis and methodology, and offered no information regarding Mitchell Medical’s use of the database; 1st Health asserted that the information was insufficient to allow proper preparation for trial and does not give details necessary to challenge the evidence that Sentry indicated it intends to present in defense of this case, and that failure to allow discovery of the data relied upon by Sentry would be highly prejudicial to 1st Health by rendering it incapable of properly presenting its case or effectively cross-examining Sentry’s witnesses.
On October 4, 2006, the trial court granted 1st Health’s motion to compel better responses to discovery and ordered that:
Within 30 days from the date of this order, the Defendant shall completely respond to the Plaintiff’s First Set of Interrogatories, First Request to Produce, Supplemental Interrogatories and Supplemental Request to Produce. If the Defendant fails to completely respond, it shall be prohibited from relying upon or utilizing the Mitchell Medical/Ingenix software or the recommendations of Mitchell Medical and/or Ingenix in any way in its defense of this case.
Sentry filed a Petition for Writ of Certiorari of the trial court’s Order November 2, 2006, in which it argues only two points; first, that the trial court’s order departed from the essential requirements of law by requiring Sentry to produce documents that are not in its possession, custody, or control, and second, that the requested documents are not relevant to 1st Health’s claim.
LEGAL ANALYSIS
A petition for certiorari must pass a “three-pronged” test before an appellate court can grant relief from an erroneous interlocutory order:
A petitioner must establish (1) a departure from the essential requirements of the law, (2) resulting in material injury for the remainder of the action (3) that cannot be corrected on post-judgment appeal.
The final two prongs of the test are jurisdictional. The appellate court must conduct the jurisdictional analysis before it is empowered to determine whether to grant relief on the merits, i.e., whether the non-final order departs from the essential requirements of the law. Barker v. Barker, 909 So. 2d 333, 336 (Fla. 2nd DCA 2005) (quoting Parkway Bank v. Fort Myers Armature Works, Inc., 658 So. 2d 646, 648 (Fla. 2nd DCA 1995).
The Petition for Writ of Certiorari alleges that the Order of the lower tribunal will cause irreparable harm by requiring disclosure of documents the petitioner alleges are not in its possession. However, Sentry has not shown how it will suffer any material or irreparable harm, particularly where the record supporting the petition shows that Sentry has the option of introducing other evidence, apart from the Mitchell Medical/Ingenix information, to support their defense that the amounts charged by 1st Health exceed the reasonable amounts for the subject health care services. The court’s order does not foreclose Sentry from asserting this defense, and therefore Sentry cannot show any irreparable or material harm.
Even if Sentry could overcome the jurisdictional hurdle of showing material harm that cannot be remedied by plenary appeal, it is not a departure from the essential requirements of law for the Court to order that Sentry produce the underlying data upon which Sentry has based its determination of the “reasonable charge” for the services provided by Respondent, because that order is not absolute. The court did not state as an absolute that Sentry must produce materials that are allegedly not in its possession, custody, or control, but rather simply ordered that if Sentry intends to rely on the Mitchell Medical/Ingenix determination in the defense of this case, that it must produce the underlying data.
Sentry relies on Progressive Express Insurance Co. v. Bixon Chiropractic Center, P.A., No. 04-115-AP (Fla. 18th Cir. Ct. Nov. 18, 2005) in support of its argument. However, Bixon is distinguishable from, and not inconsistent with, the order in the instant case because, unlike the order in Bixon, the order to produce the materials in this case was not absolute, it wasconditional; if Sentry wants to use Mitchell Medical in defense of the case, then it must provide the discovery sought by Respondent.
The fact that Sentry does not have, and apparently cannot obtain, the underlying data is a consequence of the business arrangement it entered into with Mitchell Medical. When Sentry entered into its agreement with Mitchell Medical it may have lacked the foresight to anticipate the evidentiary quandary it now faces. However, Respondent should not be penalized for Sentry’s poor judgment by having its ability to challenge Sentry’s evidence compromised; to do so would allow Sentry to use the Mitchell Medical program asboth a shield and a sword and would be highly prejudicial to Respondent. The Court’s order is consistent with well-established rules of evidence and does not violate Fla. R. Civ. P. 1.350 because even if Sentry is unwilling or unable to obtain the relevant discovery from Mitchell Medical, it may still be able to independently support its determination of the “reasonable charge” for the subject services without any reference to the Mitchell Medical program or its results.
There is no departure from the essential requirements of the law. Sentry has not been forced to produce anything. The court has simply stated that if Sentry intends to rely on the Mitchell Medical/Ingenix program in its defense, then it must produce discovery relevant to that defense; if Sentry chooses not to produce that information, or cannot because of the terms of a contractual relationship that it chose to enter into, then it is free to introduce other discoverable evidence to support its defense. If this creates what Sentry perceives to be a “catch-22” with respect to its use of Mitchell Medical, then it is a “catch-22” of its own construct.
Sentry’s second point is that the order requires documents to be produced that are not relevant to the issue of the reasonable amount of 1st Health’s bills. Sentry reasons that because the burden is on 1st Health to prove the reasonableness of its medical bills, its defenses to the claim are irrelevant and discovery should be prohibited as to those defenses. In support of this argument, Sentry cites several cases including Derius v. Allstate Indemnity Company, 723 So. 2d 271 (Fla. 4th DCA 1998) and State Farm Mut. Auto. Ins. Co. v. Sestile,821 So. 2d 1244 (Fla. 2nd DCA 2002). These cases hold that the Plaintiff has the burden of proof asto the reasonableness of the bill. However, it is axiomatic that in paying a reduced amount Sentry is asserting that the amount paid is reasonable, and once a Plaintiff provides evidence and argument as to the reasonableness of the medical bill, the Defendant must then provide a defense. Further, Sentry raised an affirmative defense which alleged that Respondent’s charges were in excess of what is customarily charged; it is Sentry’s burden to prove its affirmative defense, and Respondent is entitled to discovery regarding that defense. Sentry’s evidence proffer made clear that Sentry intends to rely upon the use of the Mitchell/Ingenix database at trial to support its defense, wherein it states to proffer “the evidence Ms. Carla Gee of Ingenix will provide at trial.” If Sentry wishes to introduce testimony concerning the accuracy of the database or how the database determines the recommended charges, evidence of the underlying data and methodology for determining the amount paid becomes very relevant and discoverable pursuant to § 90.402, Fla. Stat. (2005) and § 90.705, Fla. Stat. (2005), since such testimony would necessarily have to come from an expert witness.
In its Petition, Sentry alludes that State Farm Mut. Auto. Ins. Co. v. Sestile,821 So. 2d 1244 (Fla. 2nd DCA 2002), stands for the proposition that an insurer can utilize a database to reduce bills and defend its reduction on that basis without having any obligation to produce the data upon which it relies. However, although Sestile holds that an insurer’s use of adatabase to determine payment amounts does not violate the Florida No-Fault law, Sestile does not address the issue of whether an insurer must produce the data if it intends to rely on such at trial. Sestile also says that it is the insured’s burden to prove the accuracy, or lack thereof, of the insurer’s database, and this aspect of the holding clearly supports production of the data in order to give the Respondent a meaningful opportunity to challenge the evidence.
1st Health has the right to conduct discovery regarding the information being relied upon by Sentry to deny and reduce the Plaintiff’s medical bills. It is incumbent upon the Defendant to produce the evidence upon which it intends to rely for defense of its case; it is not the responsibility of Plaintiff to independently obtain this evidence if it is in the possession of a party other than the Defendant.
The order does not cause Sentry material harm that cannot be remedied by plenary appeal, nor does the order depart from the essential requirements of law; further, to the extent that Sentry wishes to rely on the Mitchell Medical/Ingenix software program and database in the defense of this case, the materials that are the subject of the discovery order are relevant and discoverable. Accordingly, the Petition for Writ of Certiorari is DENIED.
It is therefore,
ORDERED AND ADJUDGED that the County Court’s October 4, 2006 Order Granting Plaintiff’s Motion to Compel Better Responses to Discovery [13 Fla. L. Weekly Supp. 1210a] is hereby AFFIRMED.
