16 Fla. L. Weekly Supp. 433b

Online Reference: FLWSUPP 165SCHUL

Insurance — Personal injury protection — Notice of loss — Disclosure and acknowledgment form — Description of service provided as “chiropractic treatment” on D&A form does not substantially comply with statutory requirement — Noncompliant D&A form only allows insurer to withhold payment for initial date of service where medical provider complied with all statutory requirements for claims for subsequent treatment

PATHWAY WELLNESS CHIROPRACTIC CLINIC, P.A., as assignee of Paul Schulz, Plaintiff, vs. USAA CASUALTY INSURANCE COMPANY, Defendant. County Court, 2nd Judicial Circuit in and for Leon County. Case No. 08-CC-3552. January 16, 2009. Ronald Flury, Judge. Counsel: Matthew Scanlan. Kimberly A. Driggers, Brooks, LeBoeuf Bennett Foster Gwartney, P.A., Tallahassee.

ORDER ON DEFENDANT’S MOTION FOR FINAL SUMMARY JUDGMENT

THIS COURT, having heard Defendant’s Motion for Final Summary Judgment on December 10, 2008, and having reviewed the pleadings and evidence, and being otherwise fully advised in the premises, ORDERS AND ADJUDGES as follows:

1. Paul Schulz incurred medical bills as a result of an automobile accident.

2. Mr. Schulz’s treating physician, Dr. Jeffery Farrah, submitted payment to the insurance carrier of Mr. Schulz, USAA CASUALTY INSURANCE COMPANY (“USAA”), for benefits under the Personal Injury Protection provisions of the insurance policy.

3. USAA denied payment of the submitted bills due to an invalid Standard Disclosure and Acknowledgment (SD&A) Form, pursuant to its interpretation of § 627.736(5)(e), Fla. Stat.

4. USAA filed the instant motion for final summary judgment, arguing Plaintiff’s SD&A form did not substantially comply with the requirements of the Personal Injury Protection statute, and this noncompliance resulted in a failure of Plaintiff to put USAA on notice. In addition, USAA alleges that the Plaintiff failed to perform a condition precedent to submitting a claim for benefits. Accordingly, USAA argued it was justified to deny payment of all bills submitted by Plaintiff on Mr. Schulz’s behalf.

5. For the reasons set out below, this court GRANTS Defendant’s motion for summary judgment as to the first day of service submitted for payment to USAA, but DENIES Defendant’s motion for summary judgment as to all other bills.

UNDISPUTED FACTS

6. On March 5, 2008, Mr. Schulz sought treatment from the Plaintiff, Pathway Wellness Chiropractic Clinic (“Pathway Chiro”).

7. Under Florida law, in order to receive payment under a PIP policy, a provider is required to present the insured with an SD&A form on the date of initial treatment. See § 627.736(5)(e), Florida Statutes. This form, created by the Department of Insurance Regulation in response to legislation passed in 2003, requires both the provider and the insured to verify that “the services set forth” on the form “were actually rendered.”

8. On the form provided by Pathway Chiro and signed by Mr. Schulz, the provider indicated that “chiropractic treatment” was the service rendered on the initial date of treatment to Mr. Schulz, and submitted the signed form, a bill for services provided, and corresponding medical records to USAA.

9. However, the bill provided to USAA for this date of service requested payment for a new patient examination, EMS, heat pack, and chiropractic manipulation.

10. While this lawsuit was pending, both Dr. Farrah and Mr. Schulz provided affidavits stating that these were the services that were actually provided and that the services were explained to the patient. In addition, deposition testimony of the claims adjuster confirmed no fraud was claimed or suspected by the Defendant.

11. USAA rejected payment on the grounds that Plaintiff did not properly fill out the required SD&A form, and thus USAA was never put on notice of the services actually provided to Mr. Schulz.

12. Plaintiff sent a Demand and Notice of Intent to Initiate Litigation to USAA, which USAA denied. This lawsuit followed, seeking payment of Dr. Farrah’s unpaid medical bills.

ISSUES

13.There are two issues before the court.

14. First, the court must decide if the SD&A form submitted by Plaintiff was in “substantial compliance” with Florida law.

15. If the court finds that the form is not in compliance, this court must then determine if an improper form allows an insurer to reject payment of all subsequent medical bills submitted by a provider.

ANALYSIS AND RULING

16. This court is mindful that the intent behind the PIP statute is to “provide swift and virtually automatic payment so that the injured may get on with his life without undue financial interruption,” Ivey v. Allstate Ins. Co., 774 So. 2d 679, 683-684 (Fla. 2000).

17. However, the court is equally aware that this intent was “significantly compromised due to the fraud and abuse that permeated the PIP insurance market”, Ch. 2003-411, Laws of Florida, § 1(2)(c), which led to the passage of the provision at issue here today. Specifically, the Legislature determined that “it is necessary to enact the provisions contained in this act in order to prevent PIP insurance fraud and abuse and to curb escalating medical, legal, and other related costs.” Id. at §1(2)(g).

18. One of the “provisions contained in this act” was the newly-added section 627.736(5)(e), at issue here, which created the requirement for the medical provider to discuss the services being provided their patient, to disclose in writing the services provided, and to have the patient sign attesting to the fact that this medical treatment was actually received and not improperly solicited.

19. This court finds that one of the purposes of § 627.736(5)(e) is to prevent fraud and to give the insurers a method to curtail billing for services not actually provided.

20. The only way for the statute to serve its intended purpose is to put the onus on the provider to indicate on the form the treatment provided, discuss the treatment with the insured, and then have both parties attest that this treatment was actually provided.

21. The purpose of the statute would be ignored if a provider is allowed to fill out the form with a broad, vague description of service, yet is allowed to bill the insurer for multiple, specific, treatments.

22. Accordingly, Plaintiff’s general description here of the services provided (i.e. “chiropractic treatment”) does not substantially comply with the statutory provision.

23. However, because the Legislature did not include a forfeiture provision in the SD&A statute, it is improper for an insurer to withhold payment for all dates of services.

24. The SD&A form is only required with respect to the initial date of service. § 627.736(5)(e)(9), Fla. Stat. For all subsequent bills, providers must maintain a patient log consistent with the services rendered. Id.

25. Because the SD&A form is only required on the initial date of service, only bills associated with this date of service are improperly submitted.

26. Plaintiff’s compliance with all statutory prerequisites following the initial date of service precludes Defendant from denying payment for these dates of service.

27. Accordingly, this court GRANTS partial summary judgment for Defendant as to the first date of service, but DENIES Defendant’s motion as to all other subsequent dates of service.