16 Fla. L. Weekly Supp. 232a

Online Reference: FLWSUPP 163UNITE

Insurance — Personal injury protection — Denial of benefits — Where insurer obtained independent medical examination report opining that further treatment of insured was not reasonable, related or medically necessary and subsequently obtained peer review report opining that none of medical care received by insured was reasonable, related or necessary, trial court correctly granted summary judgment in favor of insured for treatment prior to IME since peer review report was not obtained prior to denial of benefits

CERT. GRANTED IN PART, QUASHED IN PART. 35 Fla. L. Weekly D34a.

UNITED AUTOMOBILE INSURANCE COMPANY, Appellant, v. PROFESSIONAL MEDICAL GROUP, INC., Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case Nos. 07-410 AP & 07-470 AP (Consolidated). February 3, 2009. An appeal from Final Judgment by the County Court of Miami-Dade County. Counsel: Michael J. Neimand, United Automobile Insurance Company, for Appellant. Maria Sampedro-Iglesia, Jose R. Iglesia & Associates, Inc., for Appellee.

(Before COHEN, JOHNSON and LANGER, JJ.)

OPINION

(Cohen, J.) On August 13, 2005, Marvelis Bauza (“Appellee”) was injured in a car accident. Beginning on August 18, 2005, Appellee received treatment from Professional Medical Group, Inc. (“Professional”). Professional, as assignee, sought reimbursement from United Auto Insurance Company (“United”) for the treatment rendered. An Independent Medical Exam (“IME”) was conducted on Appellee on October 10, 2005, by Dr. Musa-Ris. Dr. Musa-Ris determined that further treatment was not reasonable, related, or medically necessary, but gave no opinion as to the reasonableness, relatedness or necessity of treatment by Professional prior to October 10, 2005.

On May 5, 2006, Dr. David Goldberg conducted a peer review for the Appellant. Dr. Goldberg’s review relied upon the medical notes generated by Dr. Musa-Ris and Professional. Dr. Goldberg, unlike Dr. Musa-Ris, focused almost exclusively on the reasonableness, relatedness and necessity of treatment by Professional Medical prior to October 10, 2005. Dr. Goldberg’s peer review opined that none of the medical care received by the Plaintiff, even prior to October 10, 2005, was reasonable, related or necessary. Thus, it would appear that United denied Professional’s claim for reimbursement for all treatment based on the treatment not being reasonable, related and medically necessary.

Professional sued United for payment on July 12, 2006. In response, United asserted two Affirmative Defenses relevant to the appeal: (1) that Dr. Musa-Ris’s examination provided reasonable proof that expenses incurred subsequent to October 10, 2005, were not reasonable, related, or medically necessary; and (2) that United had reasonable proof based upon “a peer review” that it was not responsible for payment of any of the subject bills.

At the summary judgment hearing, the trial court struck the medical report of Dr. Goldberg on the grounds that it was prepared more than 30 days after Professional Medical filed its claims and granted summary judgment on those charges for medical care prior to Dr. Musa-Ris’s report on October 10th. At the same time, the court denied summary judgment as to payments denied subsequent to October 10, 2005. The county court based its ruling on the fact that Dr. Goldberg’s peer review was not submitted until more than 30 days after payment was demanded. Thus, it appears that the court predicated its ruling on the 30 day requirement in §627.736(4). This appeal followed.

The correct application of, and interplay between, §§627.736(4)(b) and 627.736(7)(a) continues to be the subject of much litigation requiring the expenditure of much court time. Not only are the county courts confused and in disagreement about how to interpret and apply the sections, but so are the circuit courts that sit in review of the county courts’ rulings. Moreover, the District Courts themselves are split over how to interpret the two sections. Compare United Auto v. Bermudez, 980 So. 2d 1213, 1215 (Fla. 3d DCA 2008) with State Farm Mut. Auto. Ins. Co. v. Rhodes & Anderson, D.C., P.A., 33 Fla. L. Weekly D839, D840 (Fla. 2d DCA 2008). Appellant United argues that the trial court erred because the Supreme Court clearly held in United Auto. Ins. Co. v. Rodriguez, 808 So. 2d 82 (Fla. 2002), that where an insurance company fails to pay a claim within 30 days of demand, and the company has not obtained reasonable proof to support the denial, then any payments owed are “overdue.” If later found to be wrongly denied, these overdue payments are subject to statutory penalties, including interest and attorney’s fees. The insurance company, however, is not foreclosed from defending its decision to deny payment just because it has failed to obtain reasonable proof within 30 days of the demand for payment. Id. at 87. The Appellee Plaintiff contends that the trial court ruled correctly but based on different grounds than those found by the court. Appellee argues that both Bermudez, 980 So. 2d at 1215-16, and United Auto. Ins. Co. v. Viles, 726 So. 2d 320, 321 (Fla. 3d DCA 1998) clearly hold that where an insurance company denies, withdraws or reduces a claim for benefits because the treatment is not reasonable, related or necessary, the insurer must strictly comply with the “conditions precedent” in section 627.736(7)(a).

The facts in Rodriguez are strikingly similar to this case. In Rodriguez, United admitted coverage but failed to pay any of the insured’s bills within 30 days of demand based on the defense that the bills were not reasonable, related or necessary. The insurance company denied payment without obtaining reasonable proof to support its denial until three months after the demand was made. Id. at 83. The Court in Rodriguez reversed the trial court’s summary judgment based on its reading of §627.736(4), holding that only statutory penalties, i.e., attorney’s fees and interest, could be imposed on the insurance company if and when its denial of benefits was found to be improper. Id. at 86. Justice Pariente’s concurring opinion in Rodriguez specifically found a difference between a denial and a withdrawal of benefits. (“In my view, this interpretation of the ‘reasonable proof’ requirement in section 627.736(4)(b) and the medical report requirement of section 627.736(7)(a) give meaning and effect to both statutory provisions, with each section operating independently of the other.”). Indeed, the Second District Court of Appeals, in a recent case, made a distinction between a denial of benefits based on questions of reasonableness, relatedness and necessity and the withdrawal of benefits based on those same grounds. See State Farm Mut. Auto. Ins. Co. v. Rhodes & Anderson, D.C., P.A., 33 Fla. L. Weekly D839, D840 (Fla. 2d DCA 2008) (section 627.736(4) applies to situations where an insurer denies benefits instead of withdrawing benefits). Finally, in a recent dissent wherein the Third District Court of Appeals declined to accept second-tier certiorari from a circuit court decision in a PIP case, Judge Shepherd agreed with the Second District Court of Appeals and argued that The Third District Court of Appeals had led to confusion in the lower courts by failing to distinguish between, and follow the clear statutory language of, §§627.736(7)(a) and 627.736(4)(b). Judge Shepherd argued that there is a clear difference between a complete denial of benefits by an insurance company pursuant to §627.736(4)(b) and a withdrawal of benefits already being paid pursuant to §627.736(7)(a). Judge Shepherd went so far as to ask his court to correct its “dicta” in Bermudez and Viles, wherein the court specifically found no distinction between a denial, reduction or withdrawal of benefits. Granada Ins. Co. v. Mark A. Cereceda, D.C., P.A., 34 Fla. L. Weekly D58a (Fla. 3d DCA 2008), Shepherd, J., dissenting.

Notwithstanding the above, the Third District has recently affirmed its holding in Viles that whenever a payment is denied, reduced or withdrawn based on the reasonable, related and necessary defense, a report compliant with §627.736(7)(a) is required as a condition precedent to the insurance company defending a suit based on reasonable, related and necessary. Bermudez, 980 So. 2d at 1216. In rejecting the holding in Rhodes &Anderson, the Bermudez court held that §627.736(4) only applies to the timing of when insurance benefits must be paid. In contrast, a denial or withdrawal of benefits based on the claim that the medical treatment was not reasonable, related or necessary must always be analyzed pursuant to §627.736(7)(a). Id. at 1217.

Section 627.736(7)(a) does not contain a 30 day requirement, but rather provides:

Whenever the mental or physical condition of the injured person covered by personal injury protection is material to any claim that has been or may be made for past or future personal injury protection insurance benefits, such person shall, upon the request of an insurer, submit to mental or physical examination by a physician or physicians. The costs of any examinations requested by an insurer shall be borne entirely by the insurer. . . 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. A valid report is one that is prepared 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.

Since Dr. Goldsmith’s peer review claiming that the insured’s medical treatment was not reasonable, related and necessary was not performed prior to United’s denial of benefits to the insured, the trial court was correct in granting the insured a summary judgment for all payments prior to October 10, 2005. Bermudez at 1216; Viles at321. Accordingly, even though the trial court made the right decision for the wrong reason, that decision should be affirmed. D.R. Horton, Inc. — Jacksonville v. Peyton, 959 So. 2d 390 (Fla. 1st DCA 2007).

Moreover, §627.736(7)(a) has requirements for both the insured and insurer. If either of these condition precedents are not met then the statute would appear to prevent both parties from maintaining their respective position. In the same way that the insurer must comply with the conditions precedent in §627.736(7)(a) before denying or withdrawing benefits, so must an insurer comply with the insurer’s reasonable request for an independent medical exam before benefits must be paid. In United Auto. Ins. Co. v. Custer Med. Ctr., 990 So. 2d 633, 634-635 (Fla. 3d DCA 2008), the court outlined the nature of conditions precedent in section 627.736(7)(a):

A plain reading of this statute makes clear that an insured’s submission to an IME is a condition precedent to coverage. Goldman v. State Farm Fire Gen. Ins. Co., 660 So.2d 300, 304 n. 5 (Fla. 4th DCA 1995) (“A condition precedent is one that is to be performed before the contract becomes effective.”). Courts throughout the state that have had applied section 627.736(7) have so held. See 635 United Auto. Ins. Co. v. Prof’l Med. Group, 14 Fla. L. Weekly Supp. 1021, 1021-22 (Fla.Cir.Ct.2007) (stating that section 627.736(7)(a) “makes submission to one or more reasonably set IMEs a condition precedent for reimbursement of medical bills incurred before the termination of benefits, but received after the termination”). See also De Ferrari v. Gov’t Employees Ins. Co., 613 So.2d 101, 103 (Fla. 3d DCA 1993) (“Submission to the reasonably requested I.M.E. was a condition precedent to coverage.”); United Auto. Ins. Co. v. Zulma, 661 So.2d 947, 948 (Fla. 4th DCA 1995) (indicating that attendance at an IME is a condition precedent).

Accordingly, the court’s summary judgment on the denial of payments prior to October 10, 2005 is Affirmed.

Appellee’s Motion for Attorney’s Fees is Granted pursuant to §627.428, Fla. Stat. (JOHNSON and LANGER, JJ., CONCUR.)