15 Fla. L. Weekly Supp. 745b
Insurance — Personal injury protection — Explanation of benefits — Summary judgment is entered in favor of medical provider as to count alleging breach of contract for failure to provide EOB where insurer provided no EOB prior to suit and, in response to demand letter, provided letter stating reasons for denial that was neither itemized nor correct
NDNC NEUROLOGICAL TREATMENT CENTERS, INC. (a/a/o Sadinet Fertilien), vs. UNITED AUTOMOBILE INSURANCE COMPANY. County Court, 17th Judicial Circuit in and for Broward County. Case No. 06-010152 COCE (55). April 22, 2008. Sharon L. Zeller, Judge. Counsel: Emilio R. Stillo, South Florida Trial Lawyers LLC, Sunrise, for Plaintiff. Catherine L. Massard, Office of the General Counsel of United Automobile Insurance Company; and Heather Burns, Houck Anderson PA, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AS TO COUNT II OF PLAINTIFF’S COMPLAINT (BREACH OF CONTRACT SEEKING ITEMIZED SPECIFICATION OF UNPAID CHARGES/EOB)
THIS CAUSE came before the Court on March 31, 2008 for hearing on Plaintiff’s Motion for Final Summary Judgment (Count II — Breach of Contract seeking itemized specification of unpaid charges/EOB), and the Court’s having reviewed the motion and entire Court file; reviewed the relevant legal authorities; heard argument, and been sufficiently advised in the premises the Court finds as follows:
Background. On or about July 10, 2006, having not received from Defendant the required statement of the reasons for non-payment of its charges, the Plaintiff filed its Complaint against the Defendant for Breach of Contract seeking an itemized specification of unpaid charges/Explanation of Benefits itemizing the charges received by Defendant from Plaintiff and detailing the reasons for nonpayment. The gist of Count II is that the Defendant failed to provide the explanation of benefits required by Florida Statute § 627.736(4)(b).
In fact, Defendant’s own adjuster testified in deposition as follows:
Q: Now, what day did United receive the bill from NDNC?
A: On April 1st of ‘02.
Q: Between April 1, 2002 and May 1, 2002, did United furnish NDNC with an itemized specification of benefits?
A: No.
Q: At any point in time in 2002 did United furnish an explanation of benefits?
A: No.
On June 12, 2006 Plaintiff submitted a pre-suit Demand Letter. On June 29, 2006, the Defendant responded to the pre-suit Demand Letter stating various reasons for the denial including that the Plaintiff failed to comply with Florida Statute § 627.736(5)(e) and “Peer Review on file”. The Defendant had never previously issued any correspondence denying the claim. The Defendant did not enclose a copy of the Peer Review in their response. The Defendant did not assert that Plaintiff failed to comply with Florida Statute § 627.736(5)(e) in its Answer and Affirmative Defenses and same was never a basis for denial of Plaintiff’s claim.
Defendant’s litigation adjuster with the most knowledge testified as follows as to basis for denial on the Pre-Suit Demand response:
Q: What peer review are you relying upon to contest the MD bill from NDNC?
A: The peer review was done on the other bills, and I’m not sure why the adjuster put that for another reason.
Conclusions of Law. As pertains to the issue in this Motion, Florida Statute § 627.736(4)(b) provides: “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, [. . .]; 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” (emphasis added). This is generally informally referred to as an “explanation of benefits.”
The Plaintiff is correct that the provisions of the Florida Statutes governing insurance become part of the insurance contract between the parties, Grant v. State Farm Fire & Casualty Co., 638 So. 2d 936, 938 (Fla. 1994), and that accordingly, the provision of Florida Statute § 627.736(4)(b) requiring the insurer to furnish the claimant with an itemized specification of unpaid charges became part of the contract and a breach of contract action is proper. See e.g. United Automobile Ins. Co. v. R.J. Trapana, M.D., P.A., 12 Fla. L. Weekly Supp. 452 (Decision of Judge Richard Eade, Circuit Court, Broward County in its appellate capacity 2005); United Automobile Insurance Co. v. Stat Technologies, Inc. 13 Fla. L. Weekly Supp. 37c (Decision of Judge John Luzzo, Circuit Court, Broward County, in its appellate capacity 2005); Fidel S. Goldson, D.C. P.A. (a/a/o Jon Gray) v. United Automobile Insurance Company, 12 Fla. L. Weekly Supp. 161b, (17th Judicial Circuit, 2004. Hon. Robert W. Lee). As a result, Defendant was obligated to furnish Plaintiff with an itemized specification of the unpaid charges and the reasons for non-payment. The policy is sound (avoiding needless litigation and fostering open communication regarding claims submissions). It is also expressly mandated by the statute.
The Defendant contends that its response to the Demand Letter constitutes an itemized specification of benefits. The response was neither “itemized” or “specified”. The response also included basis for denial which were not correct such as “peer review”. This Court has previously rejected the argument that a demand need not be correct or understandable. R.J. Trapana M.D., P.A. (Jesus Zuleta) v. United Automobile Insurance Company, 14 Fla. L. Weekly Supp. 99b (17th Judicial Circuit, 2006. Hon. Sharon Zeller). The Court again rejects this argument and finds that such an approach would turn the legislative intent on its head and do nothing to explain to consumers how their claims are being processed so that needless litigation is avoided.
ORDERED AND ADJUDGED THAT: the Plaintiff’s Motion for Summary Judgment is GRANTED in favor of Plaintiff as to Count II of the Complaint as to liability and at a minimum nominal damages. As to Count II, Plaintiff is the prevailing party. Pursuant to Florida Statute 627.428, Plaintiff is entitled to recover from Defendant attorney’s fees and costs as to this Count in an amount to be determined at a later hearing, for which, the Court reserves jurisdiction.
