15 Fla. L. Weekly Supp. 776b

Insurance — Personal injury protection — Withdrawal of benefits — Reasonable proof — Physician’s peer review report opining that treatment is not reasonable, related or necessary can constitute reasonable proof that insurer is not responsible for payment of claim even though report was prepared more than 30 days after receipt of claim — Peer review report constitutes valid report supporting withdrawal of benefits even though it is not based on physical examination by physician who prepared report

Certiorari denied at 34 Fla. L. Weekly D2177a, Partners in Health Chiropractic v. United Auto Ins. Co. (Fla. 3DCA 10/21/09)

UNITED AUTOMOBILE INSURANCE COMPANY, Appellant, vs. PARTNERS IN HEALTH, INC., A/A/O NEOCLES LEBRUN, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 06-628 AP. L.C. Case No. 05-11261-CC 05. June 5, 2008. An Appeal from Final Judgment of the County Court for Miami-Dade County, Judge Catherine Pooler. Counsel: Michael J. Neimand, Office of General Counsel, United Automobile Insurance Company, for Appellant. Dean A. Mitchell, for Appellee.

(Before DENNIS, CHUMBLEY and EMAS, JJ.)

(EMAS, J.) This appeal, from a summary judgment in favor of Plaintiff on a personal injury protection (PIP) claim, presents the following issues:

1. Whether a physician’s peer review report (in which the physician opines that the treatment, or a portion thereof, was not reasonable, related or necessary) can constitute “reasonable proof” that the insurer is not responsible for payment of the claim, where the report was prepared more than 30 days after receipt of the notice of the claim?

2. Whether a physician’s peer review report, issued for the denial of PIP benefits under section 627.736(7)(a), constitutes a “valid report” even though it is not based upon that physician’s own physical examination of the insured?

We answer both questions in the affirmative, and reverse the trial court’s granting of summary judgment.

The relevant facts are not in dispute: On March 7, 2002, Neocles Lebrun (“Lebrun”) was injured in an automobile accident. As a result of his injuries, he received medical treatment from Partners in Health, Inc. (“Partners”), and Lebrun assigned his benefits to Partners. Lebrun was treated by Partners between March and June of 2002, and Partners submitted its bills to Lebrun’s insurer, United Automobile Insurance Company (“United”). United did not pay any of the bills and Partners filed suit on July 20, 2005. United filed an answer and affirmative defenses in which it alleged, inter alia, that the medical treatment and expenses were not reasonable, related or necessary.

Partners filed a motion for summary judgment on the ground that all treatment was reasonable, related and necessary. In opposition, United submitted an affidavit and peer review report prepared by Dr. Neil Fleischer. Dr. Fleischer opined that a portion of the treatment was not reasonable, related or necessary, and based his opinion on a review of medical records and upon physical examinations conducted by other physicians. Dr. Fleischer did not conduct his own physical examination of Lebrun. Dr. Fleischer’s affidavit was executed in 2006, and his peer review report was dated August 23, 2004. Lebrun’s treatment ended in June 2002.¹

At the summary judgment hearing, Partners argued that, because the report was prepared more than 30 days after the bills were received by United, it did not qualify as “reasonable proof” under section 627.736(4)(b) and the trial court could not consider it as competent evidence. Alternatively, Partners contended that the court could not consider the peer review report because it was a “paper” review, based not on the affiant’s physical examination of the insured, but on an examination by another physician, and thus was not a “valid report” under section 627.736(7). The trial court granted summary judgment without further findings and entered a Final Judgment in favor of Partners. United appeals.

This court reviews de novo the granting of a summary judgment, viewing the evidence in a light most favorable to the non-moving party. Sierra v. Shevin, 767 So. 2d 524, 525 (Fla. 3d DCA 2000). In doing so, this court must determine whether there is a genuine issue of material fact and whether the trial court applied the correct rule of law. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).

1. Whether a physician’s peer review report (in which the physician opines that the treatment, or a portion thereof, was not reasonable, related or necessary) can constitute “reasonable proof” that the insurer is not responsible for payment of the claim, where the report was prepared more than 30 days after receipt of the notice of the claim?

Section 627.736(4)(b) states, in pertinent part:

Personal injury protection insurance benefits paid pursuant to this section shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same.

***

However, notwithstanding the fact that written notice has been furnished to the insurer, any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment. . . . This paragraph does not preclude or limit the ability of the insurer to assert that the claim was unrelated, was not medically necessary, or was unreasonable or that the amount of the charge was in excess of that permitted under, or in violation of, subsection (5). Such assertion by the insurer may be made at any time, including after payment of the claim or after the 30-day time period for payment set forth in this paragraph.

Partners argues that this provision requires that United have “reasonable proof” that the insurer is not responsible for the payment and that this reasonable proof must have been obtained by the insurer within 30 days of receipt of the bills.

The law is well settled in this area. There is no requirement that a peer review report (or other evidence constituting “reasonable proof”) be obtained by the insurer within 30 days following receipt of a notice of loss, where the insurer is contesting the reasonableness, relatedness or necessity of the treatment. §627.736(4)(b), Fla. Stat. (2003); United Auto. Ins. Co. v. Rodriguez, 808 So. 2d 82 (Fla. 2001); Gurney v. State Farm Mut. Auto. Ins. Co., 795 So.2d 1118 (Fla. 5th DCA 2001); State Farm Mut. Auto. Ins. Co. v. Jones, 789 So.2d 504 (Fla. 1st DCA 2001); United Auto. Ins. Co. v. Tienna, 780 So.2d 1010 (Fla. 4th DCA 2001); AIU Ins. Co. v. Daidone, 760 So.2d 1110 (Fla. 4th DCA 2000). As the Fourth District stated in Daidone:

We conclude that the thirty-day period in section 627.736(4) applies only to benefits which are reasonable and necessary as a result of the accident. Section 627.736(4), Florida Statutes, begins with the words “benefits due” and states in subsection (b) that “personal injury protection benefits paid pursuant to this section shall be overdue if not paid within thirty days.” If an insured submits a bill for medical treatment which is not related to the accident, there are no “benefits due.” If benefits are not due, they cannot be “overdue.”

***

Failing to obtain proof that it is not responsible for payment. . . does not deprive the insurer of its right to contest payment.

Daidone, 760 So.2d at 1113. (emphasis in original).

In other words, the failure to obtain reasonable proof within the 30-day period provided by statute will subject the insurer to statutory penalties of interest and attorney’s fees, but only if it is later determined by a judge or jury that the bills were reasonable, related and necessary. The insurer does not forfeit the right to contest reasonableness, relatedness or necessity (and to acquire proof of same) simply because it fails to do so within the 30-day period. However, the insurer acts at its own peril in failing to conduct an investigation within the 30-day period: if it is later determined that the bills were in fact “due” (i.e., the insurer was responsible for payment) then the failure of the insurer to act within the 30-day period renders the bills “overdue”, subjecting the insurer to the statutory sanctions of interest and attorneys’ fees.

2. Whether a physician’s peer review report, issued for the denial of PIP benefits under section 627.736(7)(a), constitutes a “valid report” even though it is not based upon that physician’s own physical examination of the insured?

At the summary judgment hearing, Partners argued that the peer review report submitted by United in opposition to the summary judgment motion was not competent evidence, because the statute requires that such a report be based upon a physical examination personally conducted by the physician preparing the report. United countered that the peer review report was a “valid report” under section 627.736(7)(a) and that the statute does not require that the physician preparing the report conduct his or her own physical examination of the insured.

Section 627.736(7)(a), Florida Statutes, provides in pertinent part:

An insurer may not withdraw payment of a treating physician without the consent of the injured person covered by the personal injury protection, unless the insurer first obtains a valid report by a Florida physician licensed under the same chapter as the treating physician whose treatment authorization is sought to be withdrawn, stating that treatment was not reasonable, related, or necessary.

To constitute a “valid report” the statute requires that it be:

[P]repared and signed by the physician examining the injured person or reviewing the treatment records of the injured person and is factually supported by the examination and treatment records if reviewed and that has not been modified by anyone other than the physician.

Fla. Stat. §627.736(7)(a).

This issue was recently decided in United Auto. Ins. Co. v. Bermudez, 33 Fla. L. Weekly D1201, 2008 WL 1883650 (Fla. 3d DCA April 30, 2008). Bermudez held that under section 627.736(7)(a), a medical report issued for the withdrawal of personal injury protection benefits may be based on a physical examination of the insured conducted by a physician other than the physician preparing the report.²

In the instant case, Dr. Fleischer’s affidavit and report states that he reviewed all prior examinations of the insured and, based upon his review, the treatment provided by Partners was not reasonable, related and necessary. The trial court erred in failing to consider the medical report prepared by a physician who did not personally examine the insured, and in failing to consider the medical report prepared after the expiration of the 30-day period provided by section 627.736(4)(b).³

For these reasons, the order granting summary judgment in favor of Appellee is REVERSED, and this cause is REMANDED to the trial court for further proceedings consistent with this opinion.

Accordingly, Partner’s Motion for Attorney’s Fees is DENIED.

REVERSED and REMANDED. (DENNIS and CHUMBLEY, JJ., concur.)

__________________

¹United concedes that the affidavit and the peer review report were prepared long after the 30-day period following its receipt of the bills from Partners.

²In the alternative, United contends that the statutory requirement of a valid report does not apply where the insurer denies benefits from the outset, but applies only where the insurer, having previously authorized benefits, intends to withdraw further benefits. Although Bermudez involved a withdrawal rather than a denial of benefits, the Third District reaffirmed its previous holding in United Auto. Insur. Co. v. Viles, 726 So.2d 320 (Fla. 3d DCA 1998), that “a valid report is required where an insurer attempts to reduce, withdraw, or deny PIP benefits on grounds of reasonableness, necessity, or relationship.” Bermudez, 33 Fla. L. Weekly at D1202, 2008 WL 1883650 at *3. Therefore, the Court’s holding on what constitutes a valid report is fully applicable to the instant case. On the limited issue of whether the “valid report” requirement is limited to a withdrawal of further benefits, Bermudez recognized and certified direct conflict with the Second District’s opinion in State Farm Mut. Auto. Ins. Co. v. Rhodes & Anderson, D.C., P.A., 33 Fla. L. Weekly D839, 2008 WL 786856 (Fla. 2d DCA March 26, 2008).

³The Bermudez opinion was filed on April 30, 2008. The trial court did not have the benefit of this decision when ruling upon Partners’ motion for summary judgment.