17 Fla. L. Weekly Supp. 606a
Online Reference: FLWSUPP 1707DIAZInsurance — Personal injury protection — Coverage — Medical expenses incurred during statutory “gap period” — Insurer correctly applied MRI fee schedule contained in 2007 PIP statute, which was in effect at time policy was issued, to MRI rendered during “gap period” created by sunsetting of PIP statute — Insurer has no legal duty to provide copy of PIP policy and declarations page upon pre-suit demand of medical provider/assignee — Demand letter that demanded amount in excess of statutory MRI fee schedule is invalid
WIDE OPEN MRI, INC. (a/a/o Ninoska Diaz), Plaintiff, vs. USAA CASUALTY INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 08-11832 COCE 55. March 23, 2010. Sharon L. Zeller, Judge. Counsel: Gary Marks and Amir Fleischer, for Plaintiff. Reuven T. Herssein, for Defendant.
ORDER GRANTING USAA CASUALTY INSURANCE COMPANY’S MOTION FOR FINAL SUMMARY JUDGMENT AND DENYING PLAINTIFF’S MOTION FOR FINAL SUMMARY JUDGMENT
THIS CAUSE, having come before this Court on USAA’s Motion for Final Summary Judgment, and Plaintiff’s cross Motion for Final Summary Judgment on February 24, 2010, and the Court having heard the respective arguments of counsel, and being otherwise fully advised in the premises, this Court finds as follows:
UNDISPUTED FACTS
1. WIDE OPEN MRI, INC. (a/a/o Ninoska Diaz) (“Plaintiff’), filed the above styled personal injury protection (“PIP”) lawsuit against USAA based on an alleged breach of an automobile insurance contract which was issued on June 12, 2007, with effective periods of July 22, 2007 through January 22, 2008. Plaintiff is a healthcare provider, who rendered a Magnetic Resonance Image (“MRI”) to Ninoska Diaz on October 4, 2007, for injuries sustained in a motor vehicle accident, occurring on or about August 31, 2007.
2. The policy of insurance specifically states that USAA will pay in accordance with the Florida Motor Vehicle No-fault Law to or for the the benefit of the covered person.
3. USAA received a CMS 1500 form from the Plaintiff on October 29, 2007, wherein Plaintiff billed using CPT Code 72141 (MRI Neck Spine without dye) charging $2,150.00, to which USAA responded with an Explanation of Reimbursement on or about November 21, 2007, explaining that Plaintiff’s charge had been allowed at $1,414.25 according to the 2001 Medicare Part B Fee Schedule with the applicable CPI adjustment as specified in Florida Statute §627.736(5)(b)(5) (2007).
4. The 2007 Florida Motor Vehicle No-Fault Law contained an MRI fee schedule, set forth in Fla. Stat. §627.736(5)(b)5., which regulated and set forth the maximum allowable amounts chargeable to PIP insurers and insureds for the rendering of MRI scans. The 2007 Florida Motor Vehicle No-Fault Law expired, or sunset by operation of law on October 1, 2007, but was re-enacted, revived, and amended as of October 11, 2007 to take effect as of January 1, 2008.
5. The Plaintiff filed suit on July 31, 2008, seeking declaratory relief to determine the propriety of USAA’s application of the MRI fee schedule set forth in §627.736(5)(b)5, as well as alleging an entitlement to a copy of the policy in response to its pre-suit demand letter. In the alternative, in the event that USAA was allowed to apply the 2007 MRI fee schedule, the Plaintiff alleged that USAA paid the incorrect amount for the MRI at issue in this case.
6. For the reasons set forth below, this Court finds that USAA is entitled to final summary judgment as a matter of law on all issues presented to this Court.
FINDINGS OF LAW
COUNT I: THE 2007 PIP STATUTE APPLIESTO SERVICES RENDERED IN THE “GAP PERIOD”
1. USAA correctly applied the fee schedule set forth in Florida Statute §627.736(5)(b)5. to the Plaintiff’s charges, and therefore the Plaintiff is not entitled to the declaratory relief sought in Count I in this case.
2. First, the analysis must begin with the plain language of the subject policy of insurance which states in pertinent part:
“Part B-1 — Person Injury Protection coverage:
Insuring Agreement: We will pay, in accordance with the Florida Motor Vehicle No-Fault Law, to or for the benefit of the covered person. . .”
3. Thus, the insurance policy made explicit reference to the 2007 Florida Motor Vehicle No-Fault Law, and as stated, Ninoska Diaz’s insurance policy was issued on June 12, 2007 with an effective period of July 22, 2007 through January 22, 2008. Thus, the policy incepted prior to the PIP sunset, and continued on through the legislative PIP revival.
4. Under Florida law, “An insurance policy is a contract. It is well settled in Florida that the statute in effect at the time the insurance contract is executed governs any issues arising under that contract.” Lumbermens Mutual Casualty Co. v. Ceballos, 440 So.2d 612, 613 (Fla. 3d DCA 1983). [emphasis added]; See also Allison v. Imperial Casualty & Indemnity Co., 222 So.2d 254, 256 (Fla. 4th DCA 1969)(“Because the insurance contract was issued subsequent to Section 627.0851, F.S. (Ch. 61-175 Laws of 1961, effective 1 July 1961; Amended Laws 1963, Ch. 63-148, effective 1 July 1963), the pertinent portions of that statute became a part of the insurance contract.”), Metropolitan Life Ins. Co. v. Fugate, 313 F.2d 788 (5th Cir. 1963); Poole v. Travelers Ins. Co., 130 Fla. 806, 170 So.138 (1937).
5. The Florida Supreme Court has cited Lumbermens with approval, holding that “it is generally accepted that the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.” Hassen v. State Farm Mut. Auto. Ins. Co., 674 So.2d 106, 108 (Fla. 1996). [emphasis added]
6. Moreover, “it is not the accident date that controls. When [the insured] and [the insurer] negotiated for and entered into the subject contract of insurance, its terms were set in accordance with the law in effect at that time. . .” Hausler v. State Farm Mut. Auto. Ins. Co., 374 So.2d 1037 (Fla. 2nd DCA 1979). [emphasis added]
7. On February 4, 2010, the Florida Supreme Court reaffirmed their holding in Hassen and once again cited Lumbermans and Hausler with approval and stated: “In our analysis, we look at the date of the insurance policy was issued and not the date that the suit was filed or the accident occurred, because “the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.” Hassen v. State Farm Mut. Auto. Ins. Co., 674 So.2d 106, 108 (Fla. 1996); see also Lumbermens Mutual Casualty Co. v. Ceballos, 440 So.2d 612, 613 (Fla. 3d DCA 1983) (holding that a liability policy is governed by the law in effect at the time policy is issued, not the law in effect at that time the claim arises); Hausler v. State Farm Mut. Auto. Ins. Co., 374 So.2d 1037 (Fla. 2nd DCA 1979). Holding that the date of the accident does not determine the law that is applicable to a dispute). Louis R. Menendez, Jr., et al. vs. Progressive Express Insurance Company, Inc., (Fla. 2010).
8. Accordingly, consistent with the foregoing authorities, at the time Ninoska Diaz’s policy was incepted, the 2007 Florida Motor Vehicle No-Fault Law, including the fee schedule mandated by §627.736(5)(b)5., was incorporated into the contract of insurance by and between USAA and the insured, and as Lumbermens mandates, the 2007 Florida Motor Vehicle No-Fault Law governs any issues arising under the contract.
9. Florida Statute §627.736(5)(b)5. (2007) sets forth a specific fee schedule for the allowable amounts for MRI’s, and because the fee schedule was the law in effect at the time the policy was issued, the maximum allowable amounts set forth above apply to the Plaintiff’s charges in this case, regardless of whether or not said fee schedule continued to exist beyond October 1, 2007. Therefore, in accordance with the policy of insurance and Florida law, this Court concludes that USAA properly applied the 2007 MRI fee schedule to the Plaintiff’s claims.
10. This Court is not persuaded that McKesson Corporation v. Shieffelin & Co., 499 So.2d 6 (Fla. 3d DCA 1987) stands for the proposition that the parties in this case “could have inserted provisions into the contract which would have extended the MRI payment limitation beyond October 1, 2007.”, and in fact, as argued by Defense counsel, Section 19, ch. 2003-411, provides that “(2) Insurers are authorized to provide, in all policies issued or renewed after October 1, 2006, that such policies may terminate on or after October 1, 2007, as provided in subsection (1).”
11. Thus, the Florida Legislature allowed insurers to include an automatic terminationof PIP coverage as of October 1, 2007 into their policies. The policy at issue does not contain any terms or provisions that terminate PIP coverage as of October 1, 2007, as authorized by law. As such, this Court can only assume that the parties intended and contracted for payments to be made “in Accordance with the Florida Motor Vehicle No-Fault Law” for the duration of the policy effective period.
12. Moreover, there is no requirement within the PIP statute, or under Lumbermens or Hassen that USAA explicitly state that the law in effect at the time the contract was entered into will continue to govern the rights of the parties throughout its duration. By operation of law, the law in effect at the time of the issuance of the policy governs the rights of the parties, even if the policy does not so state.
13. In fact, as the McKesson Court noted, “Unless they are waived by the parties, the laws and statutes in effect at the time that a contract is entered into are made a part of that contract.” Citing Cycle Dealers Ins. Inc. v. Bankers Ins. Co. 394 So.2d 1123 (Fla. 5th DCA 1981).
14. The plain and unambiguous terms of the policy at issue does not evidence that the parties intended to, or did in fact waive the laws and statutes in effect at the time the contract was entered into, which in this case was the 2007 Florida Motor Vehicle No-Fault Law. On the contrary, the policy by its very terms indicates that USAA will pay PIP benefits in accordance with the Florida Motor Vehicle No-Fault Law.
15. As the case law cited by the Plaintiff’s Motion for Summary Judgment provides, “Where a contract is simply silent as to a particular matter, that is, its language neither expressly nor by reasonable implication indicates that the parties intended to contract with respect to the matter, the court should not, under the guise of construction, impose contractual rights and duties on the parties which they themselves omitted. . . .Courts may not rewrite, alter, or add to the terms of a written agreement between the parties and [they] may not substitute their judgment for that of the parties in order to relieve one from the alleged hardship of an improvident bargain. . . . The words found in a contract are to have a meaning attributed to them, and are the best possible evidence of the intent and meaning of the contracting parties.” Jacobs v. Petrino, 351 So.2d 1036 (Fla. 4th DCA 1976) [emphasis added].
16. The only proper interpretation of the plain, unambiguous language of the contract which is consistent with Florida law, is that the parties contracted for PIP coverage in accordance with the 2007 PIP statute — including the mandatory MRI fee schedule — from July 22, 2007 through January 22, 2008.
17. Finally, this Court finds that Florida Beverage Corp. v. Division of Alcoholic Beverages and Tobacco, et. al., 503 So.2d 369 (Fla. 1st DCA 1987) applies to the facts of this case, and further validates USAA’s application of the MRI fee schedule to the Plaintiff’s claim. In Florida Beverage Corp., the First District Court of Appeal held:
“The laws in force at the time of the making of a contract enter into and form a part of the contract as if they were expressly incorporated into it. . . . the statutory rights and obligations which had become a part of the contract between the parties were not affected by the Statute’s repeal. At the time the parties entered into their brand distribution agreement, when the subject Statute was in force, they are presumed, consistent with the authorities mentioned above, to have agreed that the brands could not be withdrawn during the term of the agreement absent good cause therefor. Assuming, as we must, that such was legally regarded as a part of their agreement, to adopt Barton’s assertion regarding the effect of the statute’s repeal would constitute a prohibitive impairment of the obligations of the contract.” [emphasis added]
18. In this case, USAA had an obligation to pay Ninoska Diaz’s medical providers in accordance with the 2007 Florida Motor Vehicle No-Fault Law. The expectation and method of payment is a legally regarded part of the agreement by and between USAA and its insured. Because the laws in force at the time of the making of a contract enter into and form a part of the contract, the rights and obligations arising thereunder cannot be affected by the PIP Statute’s expiration.
COUNT II: THE PLAINTIFF IS NOT ENTITLED TO A COPY OF THE POLICY AT PRE-SUIT
1. The Plaintiff alleged that by virtue of the Florida Statute §627.4137, USAA is required to furnish an insurance policy and declarations page in response to Plaintiff’s PIP pre-suit request, as “all or a portion of the Plaintiff’s claim could be made under uninsured motorist coverage which Defendant is ‘required to offer’ and thus ‘may provide.’ ” [emphasis added].
2. In Progressive American Insurance Company v. Rural/Metro Corporation of Florida, 975 So.2d 1202 (Fla. 5th DCA 2008) the Fifth District Court of Appeal ruled on this very issue, holding that “because [section 627.4137] is limited to information regarding liability insurance coverage, and because PIP coverage is not the same as liability coverage, section 627.4137 does not create a legal duty for an insurance company to provide insurance information to an assignee medical provider.” Clearly, Florida Statute §627.4137 applies to “Each insurer which does or may provide liability insurance coverage. . .”, however under Florida law, PIP insurance is not liability insurance. Fla. Stat. §627.4137 (2008); Sallade v. Colonial Ins. Co. of Cal., 465 So.2d 1307, 1309 (Fla. 1st DCA 1985).
3. The Fifth District Court of Appeal, citing Southern Group Indemnity, Inc. v. Humanitary Health Care, Inc. (a/a/o Martha Lopez), 975 So.2d 1247 (Fla. 3d DCA 2008), held that “subsection 627.736(6) does not require pre-suit disclosure to an assignee medical provider”. [emphasis added].
4. Consequently, the Plaintiff is not entitled to the declaratory relief sought in Count II, as this issue has already been decided under Florida law.
COUNT III: THE PLAINTIFF’S PRE-SUIT DEMAND LETTER IS INVALID
1. Finally, as an alternate count, the Plaintiff has alleged that in the event USAA properly applied the 2007 MRI fee schedule contained in §627.736(5)(b)5., that USAA paid the incorrect amount.
2. In reaching its conclusion as to Count III, this Court has considered the arguments of counsel and case law presented on this issue as well as the specific language of the Plaintiff’s pre-suit demand letter itself. It is important to note that the Plaintiff’s demand specifically demanded that USAA pay $588.60 in order to avoid suit. This amount is calculated as the difference between the actual charge, which exceeds the MRI fee cap set forth in §627.736(5)(b)5. ($2,150.00), at 80%, minus the payment previously made by USAA.
3. In Wide Open MRI (a/a/o Susana Hinestroza) v. Mercury Insurance Group of Florida, 16 Fla. L. Weekly Supp. 513b (17th Cir. App. Ct. March 2009), the Seventeenth Judicial Circuit, sitting in its appellate capacity cited two cases with approval on this precise issue. The Hinestroza Court cited Fountain Imaging of West Palm Beach, L.L.C. (a/a/o Charlotte Jenkins) v. Progressive Express Ins. Co., 14 Fla. L. Weekly Supp. 614a (15th Cir. App. Ct. March 2007), wherein it was held that:
“[Plaintiff] should have claimed what it was owed or, at a bare minimum, provided Progressive with the information it needed to compute the amount owed, and sued only if that amount was not paid. Under Fountain Imaging’s reading of the statute, it could claim any sum in excess of a reasonable amount that it wanted, leaving Progressive to correctly guess the reasonable amount and pay it in order to avoid penalties and fees.” [emphasis added]
4. Moreover, the Hinestroza Court cited Florida MRI, Inc. (a/a/o Edouard Joseph) v. Allstate Indemnity Co., 12 Fla. L. Weekly Supp. 989a (17th Cir. Cty. Ct. 2005) for the proposition that “A condition precedent to filing a cause of action under §627.736 is the submission of a demand letter to the insurer that specifies a compensable amount which the insurer could pay the provider to avoid litigation. An amount that is in excess of the maximum compensable amount as per § 627.736(5)(b)(5) is not a proper compensable amount”. [emphasis added].
5. The Florida MRI Court granted summary judgment in favor of the insurer, and specifically held:
“The purpose of such specific requirements of §627.736(11), Florida Statutes, is to put the insurer on notice of a claim and have the opportunity to know from the Demand Letter the exact amount of the overdue claim, and to know that if the insurer pays said amount, the claim will be resolved without litigation. If ALLSTATE INDEMNITY COMPANY cannot, in good faith, comply with the amount stated on the Demand Letter, the purpose of putting the insurer on notice of the exact amount to pay in order to avoid litigation would be defeated. In this instant case, Plaintiff failed to satisfy a condition precedent to the filing of this action by submitting a Demand Letter to ALLSTATE INDEMNITY COMPANY, seeking an amount in excess of the maximum compensable amount as set forth by the Legislature pursuant to § 627.736(5)(b)(5), Florida Statutes, thus failing to specify the proper compensable amount which ALLSTATE INDEMNITY COMPANY could pay to avoid litigation.” [emphasis added].
6. In this case, the Plaintiff did not bill or submit a demand letter which reflected a legally compensable amount for the services rendered in this case. More importantly, the Plaintiff did not request payment of a missed CPI adjustment until the filing of its Second Amended Complaint. Therefore, if this Court was not aware that the Plaintiff sought a missed CPI adjustment in this case until September, 2009, how can USAA be deemed to have been put on notice of or had the opportunity to pay what Plaintiff now claims is the “true” amount due and owing when Plaintiff’s pre-suit demand letter sought payment for the full amount billed? If the only way for USAA to avoid suit was to issue payment upon the missed CPI adjustment, the Plaintiff could have, and should have served a pre-suit demand letter which specifically requested this amount. However, until the filing of the Plaintiff’s Second Amended Complaint, its position has been that the 2007 MRI fee schedule does not apply to the charges at issue. Consistent with its position, it submitted a demand letter which sought the difference between the billed amount, and the payment already received.
7. Therefore, consistent with the aforementioned authorities, the Plaintiff’s pre-suit demand letter is invalid, as it demanded payment upon a claim in an amount that exceeds the statutory fee schedule. Because the Plaintiff’s pre-suit demand letter did not permit USAA to have its statutory right to know what is actually at issue and payable in order to avoid suit, the Plaintiff’s demand is invalid, and the Plaintiff has not satisfied a statutory condition precedent to filing suit. Based upon the foregoing, it is hereupon
ORDERED AND ADJUDGED that USAA CASUALTY INSURANCE COMPANY’s Motion for Final Summary Judgment as to Count I, Count II, and Count III of the Plaintiff’s Second Amended Complaint be, and same is hereby GRANTED. Plaintiff’s Motion for Final Summary Judgment is DENIED. The Defendant shall go hence forth without day. This Court reserves jurisdiction to tax attorney’s fees and costs.
