17 Fla. L. Weekly Supp. 118a
Online Reference: FLWSUPP 1702DERO
Insurance — Personal injury protection — Demand letter is sufficient where, although letter stated differing amounts claimed, insurer’s correspondence demonstrates that it was provided information it needed to know exact amount of overdue claim and amount required to resolve claim without litigation
FIRST COAST MEDICAL CENTER, INC., (as assignee of Barbara Derouen), Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a foreign corporation, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 16-2009-SC-004793, Division C. November 12, 2009. Brent D. Shore, Judge. Counsel: Vincent P. Gallagher, BeachLifeLaw, LLC, Jacksonville Beach, for Plaintiff. James B. Eubanks, Rinaman & Associates, PA, Jacksonville, for Defendant.
ORDER ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
Plaintiff, First Coast Medical Center, Inc., sued Defendant, State Farm Mutual Automobile Insurance Company for breach of contract alleging that Defendant failed to properly pay for medical treatment rendered to Defendant’s insured, Barbara Derouen. Defendant’s insured, Derouen, was allegedly injured in a motor vehicle accident on October 24, 2008. Derouen sought treatment with Plaintiff, and Plaintiff timely billed Defendant for various dates of treatment.
State Farm scheduled Derouen for a Compulsory Medical Exam, CME, and as a result of that examination, notified Plaintiff that Defendant would only pay for three more chiropractic visits. Subsequent to the CME, Derouen received chiropractic treatment on February 16, 18, 23 and February 27, 2009. The February 27 chiropractic treatment also included a separate medical treatment rendered by Sandra Snyder, ARNP.
State Farm paid for three chiropractic visits, but declined payment for the February 27, 2009 treatment rendered by Plaintiff’s chiropractor and ARNP. Plaintiff sent a Pre-Suit Demand, PSD, to Defendant on April 9, 2009 requesting payment for February 27 treatment. Plaintiff attached the CMS 1500, copies of which were previously sent to State Farm, one CMS was for chiropractic care in the amount of $122.00, and the second CMS was for the ARNP treatment in the amount of $115.00. The PSD letter was on a printed form which contained all the required statutory language. Plaintiff however added a separate space on the PSD form which suggested that the amount due was $233.32 plus interest and penalty. In fact, the amount claimed as detailed above, was $237.00.
As a result of the PSD, Defendant agreed to pay the ARNP charges, but denied the February 27, 2009 chiropractic charges. State Farm, in a May 1, 2009 letter stated that: “Based on the findings of an Independent Medical Examination, chiropractic benefits for Barbara Derouen were discontinued. . . .Therefore, we are unable to consider the treatment rendered by Grady L. Carter, D.C. . . .”
Plaintiff filed suit for the denied February 27, 2009 chiropractic benefits. Defendant answered the complaint and alleged via an affirmative defense, that Plaintiff’s pre-suit demand letter under the Florida Motor Vehicle No-Fault Act failed to comply with the express requirements of Section 627.736(10), Florida Statutes. More specifically, Defendant alleged “Plaintiff’s (pre-suit demand letter) failed to provide an itemized statement specifying: the exact amount at issue.” Defendant alleged that the Plaintiff incorrectly listed the wrong amount due, therefore preventing Defendant from being able to understand what amount was actually due, and thus Plaintiff had failed a condition precedent to filing suit.
Although there are several requirements for Pre-Suit Demand letters under the relevant Florida statute, the provisions at issue are as follows:
(b) The notice required shall state that it is a “demand letter under s. 627,736(10)” and shall state with specificity
3. To the extent applicable, the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due. “A completed form satisfying the requirements of paragraph (5)(d) or the lost-wage statement previously submitted may be used as the itemized statement. . .”
Defendant asserts that Plaintiff’s demand letter failed to specifically set forth the exact amount owed by the Defendant. This position is inconsistent with the documents attached to the demand letter, and the Defendant’s admissions filed herein.
In its Pre-Suit Demand (“PSD”) letter, Plaintiff relied on the information communicated in the CMS 1500 Forms, as well as the information contained in the treatment notes for Barbara Derouen. State Farm has admitted that it received the PSD, and that it contained the CMS forms for the dates of service at issue.1 (See Response to Plaintiff’s Request for Admissions 1 and 2.)2 Sec. 627.736(5)(d), Florida Statutes, provides that all statements and bills for medical services rendered by any physician shall be submitted to the insurer on a properly completed Centers for Medicare and Medicaid Services (CMS) 1500 form. Furthermore, Sec. 627.736(10)(b)(3) expressly recognizes that use of the CMS 1500 Form satisfies the requirement of an “itemized statement”. There is no contention by Defendant that the submitted CMS 1500 forms in this case were not compliant with Paragraph (5)(d).
The PSD in this case covered three separate services on the same date — two of which were performed by a chiropractor, and the other of which was performed by an ARNP. After receiving and reviewing the PSD, State Farm responded by making payment to Plaintiff for the ARNP service designated by CPT 99213, but did not make payment for the chiropractic services designated by CPT 98941 and CPT 97140. (See Response to Plaintiff’s Request for Admissions 20.)
Although Defendant claims that it is uncertain as to how Plaintiff arrived at the claimed amount of $233.32 on the PSD letter, Defendant also admits that the Medicare fee schedule applies to the services and treatments that form the basis of the claim at issue in this lawsuit. (See Response to Plaintiffs Request for Admissions 19.) Defendant further admits that upon receipt of the PSD letter, Defendant was aware that it could limit reimbursement based on the Medicare fee schedule, and by doing so satisfy the terms and conditions of the insurance policy at issue in this lawsuit. (See Response to Plaintiff’s Request for Admissions 23.) Defendant’s knowledge of the foregoing is significant in light of its claim that it is “uncertain” how Plaintiff arrived at the amount of $233.32 as the claim amount. A review of the 2009 fee schedule shows that the claimed amount is based on 200% of the fee schedule for CPT 98941 ($67.10) and 97140 ($51.22), and that the provider’s charge of $115.00 for CPT 99213 is less than 200% of Medicare such that the charged amount is the “allowed amount.”
Although the specific amount set forth on page 1 of the PSD letter is not 80% of the “allowed amount”, the provider does not necessarily know at the time of the demand whether the insurance policy at issue is a “full-pay” PIP policy, or whether there is “Medical Payments” coverage for the other 20% of the “allowed amount.” Nonetheless, Defendant was fully aware that payment of 80% of the amounts submitted by Plaintiff would satisfy the terms and conditions of the insurance policy at issue in this lawsuit. (See Response to Plaintiff’s Request for Admissions 22.)
There should also be no “confusion” on the part of Defendant as to whether the amount at issue in this lawsuit is $233.32 or $97.60. (See Paragraph 9 of Defendant’s Motion.) Defendant has admitted that at the time it received the lawsuit in this case, Defendant was aware that Plaintiff had not received payment for CPT 98941 and CPT 97140, and further that the amount charged by Plaintiff for these services was $122.00 in the aggregate. Consistent with policy provisions, payment at 80% is $97.60, which is the amount sought in the lawsuit.
A review of the entire PSD letter together with the Defendant’s Responses to Requests for Admissions makes clear that the Defendant was provided with the information it needed to know, as to the exact amount of the overdue claim, and know that if that amount is paid, the claim will be resolved without litigation. See Physical Therapy Group, LLC v. Mercury Ins. Co. of Florida, 13 Fla. L. Weekly Supp. 889c (11th Judicial Circuit, Miami-Dade County, June 2, 2006). This is made even clearer upon consideration of the fact that Defendant paid and satisfied the claim for services rendered by the ARNP which were presented in the PSD letter.
Plaintiff’s PSD form contained all the statutory required elements, and Defendant’s own correspondence clearly demonstrates that Defendant was not confused as to what amount was due. Defendant’s Motion for Summary Judgment is denied.
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1In Paragraph 7 of Defendant’s Motion, Defendant claims that it only received “a single CMS 1500 Form” with the PSD, but this assertion is inconsistent with its Responses to the cited Requests for Admissions.
2Rule 1.370(b), Fla. R. Civ, P. provides: “Effect of Admission. Any matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission.”
