15 Fla. L. Weekly Supp. 435a
Insurance — Personal injury protection — Coverage — Medical bills — Timeliness — Waiver — Because section 627.736(5)(c)(1), which permits payment of medical bills submitted to insurer no more than 75 days after initial date of service pursuant to notice of initiation of treatment, is not statute of repose, but operates as statute of limitations or condition precedent, fact that initial set of bills sent to insurer were untimely does not bar action for later timely bills — Where insurer never advised medical provider that bills would not be paid due to late billing, explanation of benefits cited other reasons for denying claims, and insurer sent some late bills to peer review doctor for evaluation and indicated in PIP log that some of those bills would be paid, insurer waived right to assert untimeliness of bills as affirmative defense — No abuse of discretion in granting summary judgment in favor of provider
Quashed at 33 Fla. L. Weekly D1846b
UNITED AUTOMOBILE INSURANCE COMPANY, a Florida Corporation, Appellant, vs. EDUARDO J. GARRIDO, D.C., P.A., a/a/o APOLONIO CHAVEZ, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case Nos. 07-173 AP & 07-316 AP. L.T. Case No. 05-14270 SP 25. March 13, 2008. An Appeal of a summary judgment from the County Court for Miami-Dade County, entered by Jacqueline Schwartz, J. Counsel: Michael J. Neimand, Office of the General Counsel, United Automobile Insurance Company, for Appellant. Christian Carrazana, Panter, Panter, Sampedro, P.A., for Appellee.
(Before BLAKE, LANGER, MURPHY, JJ.)
(MURPHY, J.) The Appellant, United Automobile Insurance Company/United Auto, issued a personal injury protection (PIP) insurance policy for Apolonio Chavez. The policy was effective from March 16, 2005 through September 16, 2005. On April 24, 2005, Mr. Chavez was involved in an automobile accident from which he sustained injuries. He began receiving treatment for these injuries from Appellee/Assignee, Eduardo J. Garrido D.C., P.A. on May 9, 2005. Treatment for Mr. Chavez’s injuries was completed on July 25, 2005.
As required by § 627.736(5)(c)(1), Fla. Stat. (2007), Appellee Garrido mailed, via the United States Postal Service, the notice of initiation of treatment to Appellant United Auto on May 31, 2005. Subsequent to the mailing of the notice of initiation of treatment, Appellee submitted an initial set of bills to Appellant United Auto for services rendered to Mr. Chavez from May 9, 2005 through June 13, 2005 in the amount of $4,778.00. Accordingly, the bills for dates of services rendered on May 9-20, 2005 in the amount of $2,820.00 should be considered late. The notice indicating the initiation of treatment should have been mailed on May 30, 2005 to comply with that part of § 627.736(5)(c)(1) that permits payment of treatment bills submitted no later than 75 days after the initial date of service pursuant to a notice of initiation of treatment. In this instance, Appellee Garrido’s notice of initiation of treatment was mailed a day late, a fact to which Appellee readily admits. Thus, there is a possibility that the series of untimely submitted bills — May 9-20, 2005 — included within the first group bill mailing should not be reimbursed pursuant to the 75 day billing/payment cycle allowing for payment of medical treatment as provided under § 627.736(5)(c)(1).
Even so, at the behest of Appellant United Auto, Dr. Neil Fleisher D.C. conducted an independent medical exam/IME on Mr. Chavez on June 14, 2005. Once the first group of bills was received on June 24, 2005 and reviewed, Appellant United Auto submitted them in conjunction with the IME results to Dr. Fleisher for a peer review. The peer review report was completed on August 2, 2005 which was after Appellant United had received all of the bills for Mr. Chavez’s treatment. After completing his peer review, Dr. Fleisher determined that a number of the late submitted bills were compensable because they were rendered for services that had been medically necessary and related.
As indicated in its PIP log and as based on Dr. Fleisher’s recommendations, Appellant United Auto agreed to pay a reduced amount for a series of bills rendered by Appellee for services that were medically necessary and reasonably related. However, some of these bills that Appellant agreed to pay were untimely submitted. United Auto’s intention to pay the untimely bills is evidenced in their PIP log in the “Amount Allowed” column. For those bills it refused to pay, Appellant United Auto provided Appellee Garrido with an Explanation of Benefits/EOB form delineating its reasons for not paying.
The EOB form advised that Appellant United Auto declined to pay certain submitted bills because: 1) the charge exceeded a reasonable fee; 2) non-compliance with § 627.736(5)(a) — defective disclosure and acknowledgement form; 3) the peer review findings of Dr. Fleischer did not support payment; and, 4) the Appellant established IME cut off date for payment of treatment claims. A noticeably absent reason for explaining non-payment of some of the bills submitted was late billing. It is noted that the EOB form provided to Appellee Garrido to explain the reason for reduced or nonpayment of benefits does offer non-payment based on late bill submission as a viable option for refusing to pay claims.
Appellee Garrrido submitted a pre-suit demand letter to Appellant United Auto in August of 2005 demanding payment in the amount of $8,558.00 at 80% minus the required $1,000.00 deductible. Appellant United Auto failed to respond, thus an action to enforce the PIP policy was initiated on October 4, 2005. In response, Appellant United Auto filed both an answer and amended affirmative defense alleging late billing as a reason for non-payment. On October 25, 2006, Appellee Garrido moved for summary judgment. When initiating summary judgment proceedings, Appellee Garrido confessed that the bills for treatment services rendered before and up until May 20, 2005 were late, but United Auto waived non-compliance based on its conduct. Appellee’s motion for summary judgment was heard on February 13, 2007, and the trial court granted the motion based on the concept of waiver.
On appeal Appellant United Auto contends that the trial court applied the incorrect law when it granted Appellee’s motion for summary judgment based on the waiver defense. United maintains that § 627.735(5)(c)(1) is a jurisdictional statute of nonclaim, thus any untimely claim submitted is automatically barred. May v. Illinois National Ins. Co., 771 So. 2d 1143, 1155 (Fla. 2000); Barnett Bank of Palm Beach County v. Estate of Read, 493 So. 2d 447, 448 (Fla. 1986) (a statute of nonclaim or repose is a self-operating absolute jurisdictional bar to a tardily filed claim.). Because a statute of nonclaim or repose is a jurisdictional bar, Appellee United Auto contends that affirmative defenses argued pursuant to § 627.735(5)(c)(1) and based on the concept of late payment are not subject to waiver or extension. See May, 771 So. 2d at 1155.
This Appellate Court disagrees with Appellant United Auto’s classification of § 627.735(5)(c)(1) as a statute of repose or nonclaim. The applicable part of the section states:
With respect to any treatment or service, . . . the statement of charges must be furnished to the insurer by the provider and may not include, and the insurer is not required to pay, charges for treatment or services rendered more than 35 days before the postmark date of the statement, . . . except that, if the provider submits to the insurer a notice of initiation of treatment within 21 days after its first examination or treatment of the claimant, the statement may include charges for treatment or services rendered up to, but not more than, 75 days before the postmark date of the statement.
This Court finds after examining the applicable part of § 627.735(5)(c)(1) that it does not function as a statute of repose, but may instead, operate as a statute of limitations, or at the very least a condition precedent. The Florida Supreme Court noted that “[T]he very purpose of a statute of repose is to extinguish valid causes of action, sometimes before they even accrue. Nehme v. Smithkline Beecham Clinical, 863 So. 2d 201, 208 (Fla. 2003).
In contrasting the differences between a statute of repose and a statute of limitations in Nehme, the Supreme Court further explained that a statute of repose precludes a right of action after a specified time, while a statute of limitations establishes a time period within which the action must be brought measured from the point in time when the cause of action may have accrued. See 863 So. 2d at 208. Furthermore, a statute of repose does not work to provide a time limitation for filing a suit after the accrual of the cause of action, but prevents the cause of action from arising after its time limitation. See Houck Corporation v. New River, Ltd., 900 So. 2d 601, 603 (Fla. 2d DCA 2005).
On the other hand, a statute of limitation establishes the time period within which a cause of action must be commenced. WRH Mortgage, Inc. v. Butler, 684 So. 2d 325, 327 (Fla. 5th DCA 1996). It is a procedural statute that can prevent the enforcement of a cause of action that has accrued. See Houck Corporation, 900 So. 2d at 603. It does not determine the underlying merits of the claim but merely cuts off the right to file suit on that claim. Id. In addition, the limitation period is directly related to the date on which the cause of action accrued. WRH Mortgage, Inc., 684 So. 2d at 327.
This Court has taken note of the fact that Appellee initially submitted a series of bills for services rendered from May 9, 2005 through June 13, 2005. Like the Appellee admits, and this Court confirms, those bills submitted for dates of services rendered on May 9, 2005 through May 20, 2005 should be considered late. Therefore they should not be considered part of the 75 day billing/payment cycle as it exists under § 627.735(5)(c)(1). Based on the statute, there is a possibility that the bills submitted for May 9-20 need not be paid by the insurer because they were submitted late. While this possibility of nonpayment may hold true for those late bills, the action initiated for payment of the timely submitted bills — May 23, 2005 through July 22, 2005 still remains a viable action under § 627.735(5)(c)(1).
If this Court were to consider § 627.735(5)(c)(1) a statute of repose, the action initiated for payment of the remaining timely submitted bills would cease to exist. However, there is no language in the statute which suggests that the Appellee’s right to access the courts to initiate an action to obtain payment for the outstanding timely submitted bills is barred. Thus, § 627.736(5)(c)(1) cannot be used as a mechanism to bar Appellee’s cause of action for the payment of timely submitted outstanding bills. This Court recognizes that the section at issue imposes a statutory time limit to submit medical bills. See Warren v. State Farm Mut. Auto. Ins. Co., 899 So. 2d 1090, 1095 (Fla. 2005). However, it should be thought of as a statute of limitation, or in the alternative, a condition precedent to payment, the nonperformance of which could discharge an insurer’s duty of payment, but not a statute of repose. See Alzate v. United Auto Insurance Co., 11 Fla. L. Weekly Supp. 878a (Fla. 11th Cir. Ct. 2004).
Having made this decision, the Appellate Court now turns to the trial court’s decision granting summary judgment based on the doctrine of waiver. Waiver is defined as the intentional or voluntary relinquishment of a known right, or conduct which infers the relinquishment of a known right. Thomas N. Carlton Estate v. Keller, 52 So. 2d 131, 133 (Fla. 1951); see Miracle Center Assoc. v. Scandinavian Health Spa, 889 So. 2d 877, 878 (Fla. 3d DCA 2004); Miami Dolphins, Ltd. v. Genden & Bach, P. A. and Ed Gorman, 545 So. 2d 294, 296 (Fla. 3d DCA 1989); Singer v. Singer, 442 So. 2d 1020, 1022 (Fla. 3d DCA 1983). One can waive any contractual, statutory or constitutional right. Thomas N. Carlton Estate, 52 So. 2d at 133; Miami Dolphins, Ltd., 545 So. 2d at 296. Thus, a party may waive any rights to which it is legally entitled, by actions or conduct warranting an inference that a known right has been relinquished. Hammond v. DSY Developers, LLC, 951 So. 2d 985, 988 (Fla. 3d DCA 2007); Torres v. K-Site 500 Assoc., 632 So. 2d 110, 112 (Fla. 3d DCA 1994).
Appellant United Auto contends the trial court applied the incorrect law when it determined that the Insurer waived its right to rely on § 627.736(4)(b) as an affirmative defense, when after receiving the untimely bills, it continued to investigate the claim. The applicable part of § 627.736(4)(b), Fla. Stat. (2007) states:
. . . When an insurer . . . rejects a claim, the insurer shall provide at the time of the . . . 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, provided that this shall not limit the introduction of evidence at trial. . . .
This Court agrees with Appellant United Auto in that § 627.736(4)(b) does not serve to limit an insurer’s ability to defend against a lawsuit. Review of the section provides that an insurer’s ability to introduce evidence at trial on medical necessity or reasonableness of charges is not limited to the insurer’s explanation provided in the explanation of benefits form. In essence this means that an insurer is not prevented from offering evidence from some other source to support an affirmative defense justifying nonpayment.
While this may be true, this does not mean that the behavior of the insurer relying on an affirmative defense to justify nonpayment will have no effect on its ability to present, or the reviewing court’s willingness to accept the defense as a valid means to affirm the nonpayment of submitted claims. What then becomes the question is whether the otherwise valid affirmative defense of untimeliness becomes invalid based on the insurer’s behavior, thus making the concept of waiver a viable defense against an otherwise credible, and valid affirmative defense justifying an insurer’s decision not to pay a claim.
This Court finds in this instance that the Appellee has effectively made a case for waiver, and as a consequence, we must affirm the lower court’s award of summary judgment. The elements of waiver are 1) the existence at the time of the waiver of a right; 2) a privilege or advantage or benefit which may be waived; 3) actual or constructive knowledge of the right; and, 4) the intent to relinquish that right. Capital Bank v. Needle, 596 So. 2d 1134, 1135 (Fla. 4th DCA 1992); Taylor v. Kenco Chemical & MFG. Corp., 465 So. 2d 581, 587 (Fla. 1st DCA 1985).
The record reveals that Appellant United never advised the Appellee that the bills for services rendered from May 9-May 20, 2005 would not be paid because they were submitted late. In fact when providing their explanation of benefits form to the Appellee, Appellant United Auto cited the following reasons for reducing or denying certain claims: 1) the charge exceeds the reasonable fee; 2) Noncompliance with § 627.736(5)(d) — i.e., defective disclosure and acknowledgment forms; 3) the peer review findings of Dr. Fleischer D.C. advised nonpayment; and, 4) the established IME cut off date for payment of treatment claims. While the choice of late payment was available at the bottom of the EOB form as a reason for nonpayment, this reason was not offered by Appellant United Auto to justify nonpayment of some of the treatment bills received.
Appellant United Auto’s litigation adjuster conceded during his deposition that the EOB form did not provide the Appellee with notice that payment for the bills submitted for May 9-20 was declined based on late billing. He further admitted that this series of bills along with others had been forwarded to Dr. Fleischer for his evaluation regarding the necessity of the services provided. In turn, Dr. Fleischer determined that some of the untimely submitted bills should be paid. On its PIP log, in the “Amount Allowed” column, United indicated that a reduced amount was payable on some of bills submitted and among these bills were those that had been submitted late.
Appellant United Auto’s actions more than satisfy the elements indicating waiver. Under § 627.736(5)(c)(1), United had an existing right not to pay medical bills that were not timely submitted. This remains true whether one considers that section of the statute one of repose/nonclaim, limitation, or a condition precedent. Furthermore, this right existed at the time that the untimely bills were submitted. Like everyone else, United Auto is imputed with both active and/or constructive knowledge of any Florida statute and any of its requirements that may affect its rights.
Also, Appellant United’s behavior with regard to its continued use of the untimely submitted bills in its analysis regarding the necessity, reasonableness and relatedness of the treatment provided, as well as, its need to provide payment for claims submitted, evidences behavior diametrically opposed to that of someone claiming an existing right of nonpayment. See Alzate v. United Auto Insurance Co., 11 Fla. L. Weekly Supp. at 878a. In addition, there is nothing in the record which would support a claim that United Auto intended to deny payment of certain bills based on late payment. As mentioned before, a party’s conduct can warrant an inference that a right has been relinquished. Miami Dolphins Ltd., 545 So. 2d at 295. As there was no evidence presented in the record that shows that the delay in the receipt of the medical bills prejudiced United, this Court finds that the Appellant’s actions tend to prove that it had every intention to pay the untimely submitted bills. See Alzate, 11 Fla. L. Weekly Supp. at 878a. Thus, Appellant United Auto waived its right to employ the statutory bar to payment as provided by § 627.736(5)(c)(1). Id.
Absent an abuse of discretion involving a misconception of a controlling principle of law, this Appellate Court must affirm the decision of summary judgment rendered by the lower court. See Applegate v. Barnett Bank of Tallahassee, 377 So. 2d 1150, 1152 (Fla. 1979). We find that in this instance, the trial court did not misconceive the controlling principle of law involving waiver. Id. Thus, an affirmative defense based on untimeliness to justify nonpayment of a claim is subject to the doctrine of waiver. Alzate, 11 Fla. L. Weekly Supp. at 878a. At the summary judgment hearing, the Appellee successfully demonstrated that there were no genuine issues of material fact involving Appellant United Auto’s waiver of its right to assert the statutory bar precluding payment of late bills pursuant to § 627.736(5)(c)(1), Fla. Stat. (2007). As no abuse of discretion occurred involving a misapplication of the law, this Appellate Court affirms the decision of the lower court granting summary judgment.
This matter is therefore AFFIRMED and REMANDED to the trial court for proceedings consistent with this opinion.
