18 Fla. L. Weekly Supp. 492a
Online Reference: FLWSUPP 1805SHUT Insurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Bad faith — Where there was no binding legal authority as to whether inclusion of professional license number on claim form was required at time insurer denied medical provider’s claim on that basis, there was no bad faith that would require insurer to set aside disputed amounts — Insurer is not responsible for disputed amounts after exhaustion of policy limits on other claims
DPI OF NORTH BROWARD, LLC, (A/A/O JOHN SHUTOWICK), Plaintiff, vs. USAA CASUALTY INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 10-5075 COCE 53. February 1, 2011. Honorable Robert W. Lee, Judge. Counsel: Charles Kane, for Plaintiff. Reuven T. Herssein, Law Offices of Herssein & Herssein, P.A., North Miami, for Defendant.
FINAL SUMMARY JUDGMENT IN FAVOR OF DEFENDANT
THIS CAUSE came before the Court on January 31, 2011, for hearing of the Defendant’s Motion for Final Summary Judgment, and the Court’s having reviewed the Motion, the entire Court file, and the relevant legal authorities; having heard argument of counsel; having made a thorough review of the matters filed on record; and having been sufficiently advised on the premises, the Court finds as follows:
The issue before this Court is whether an insurer is required to pay a claim when a claim was otherwise timely received, but policy benefits were subsequently exhausted presuit.
Findings of Fact: Plaintiff, a provider of MRI services, submitted a CMS 1500/HCFA form to the Defendant for two MRI services, billed on September 4, 2009. The CMS 1500/HCFA forms were global bills, including charges for the technical and professional components of the MRIs, billed as CPT Codes 72141 and 74128. It is undisputed that Plaintiff did not include a professional license number in Box 31 of the CMS 1500/HCFA forms submitted to Defendant. On October 2, 2009, Defendant denied payment of the bills based upon its position in its Explanation of Reimbursement (EOR) which states that “CMS 1500 form needs to be submitted with Box 31 completed pursuant to Florida PIP Statute 627.736. Box 31 should contain the name of the provider or supplier who rendered the service and their professional license number.” Defendant continued to make good faith payments to legitimate claims submitted by the assignor’s other medical providers. On March 19, 2010, all PIP benefits available under the policy of insurance were exhausted. On or about April 9, 2010, Plaintiff filed the instant action against Defendant, seeking reimbursement for the claim that was denied based upon Box 31. However, Defendant was not served with this suit until April 14, 2010 — two days after all Medical Payments benefits available under the policy exhausted on April 12, 2010.
In light of the Fourth District Court of Appeals ruling in USAA Casualty Insurance Company v. Pembroke Pines MRI, Inc. (a/a/o Megan Cahill), 31 So.3d 234 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D613b] (holding that a medical provider need only provide substantially accurate responses to the all relevant information and material elements on the CMS 1500/HCFA form), the Plaintiff claims that the Defendant never had “reasonable proof” that it was not responsible for the claim, and therefore, acted in bad faith in the denial of the claim.
Conclusions of Law: Florida law has well established that an insurer is not responsible for payment of any further benefits once PIP and Medical Payments benefits have been exhausted under the policy, unless the insurer acts in bad faith in denying the claim or improperly manipulates the claim to avoid paying it. In this case, there is no dispute that the PIP and Medical Payments benefits were exhausted by paying other legitimate claims. At that time, the Defendant acted reasonably in denying the claim when the CMS 1500/HCFA forms failed to contain a professional medical license number in Box 31, although its position was later found to be legally untenable.
Most recently, the First District Court of Appeal dealt with the same factual scenario before the Court in this case. In Richard A. Sheldon, D.C., (a/a/o Travis Baliel) v. United Services Automobile Association, 2010 Fla. App. LEXIS 20245; 36 Fla. L. Weekly D23a (Fla. lst DCA 2010), the appellate court stated, “Florida courts have established that, once an insurer has paid out the policy limits to the insured (or to various providers as assignees), it is not liable to pay any further PIP benefits, even those that are in dispute. See Simon v. Progressive Express Insurance Co., 904 So. 2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]. Further, if benefits are exhausted after suit is filed, but before the suit is served on the insurer, the suit for benefits may not go forward, because the insurer has met its obligation under the contract to pay the policy amount. See Progressive American Insurance Co. v. Stand-Up MRI of Orlando, 990 So. 2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a].”
Moreover, pursuant to Progressive American Insurance Co. v. Stand-up MRI of Orlando, 990 So.2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a], Simon v. Progressive Express Insurance Co., 904 So.2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b], and Millennium Diagnostic Imaging Center, Inc. a/a/o Alfonso Taboada v. Progressive Express Insurance Company, 14 Fla. L. Weekly Supp. 938a (Fla. 11th Jud. Cir. July 19, 2007), cert. denied, 2008 Fla. App. Lexis 10301 at *1, 33 Fla. L. Weekly D1742b (Fla. 3d DCA July 9, 2008), the Court finds no bad faith on the part of this Defendant which might require the insurance company to set aside disputed amounts. Bad faith does not exist when an insurer takes a legal position, relying upon the status of the law at that time, when there is no binding authority stating otherwise. At the time the Defendant denied the Plaintiff’s claim, there was no binding legal authority as to whether a professional medical license number was required in Box 31 of the CMS 1500/HCFA form. At that time, Box 31 was a hotly contested issue, with County Court opinions finding in favor of both the Plaintiff’s and the Defendant’s positions. However, the fact that there were non-binding County Court opinions opposite of the Defendant’s legal position on the Box 31 issue does not give rise to an assertion of bad faith in the handling of the claim. The Defendant had “reasonable proof” to deny the claim, based upon the fact that the CMS 1500/HCFA forms were not properly completed, pursuant to Florida Statute §627.736(5)(d). Furthermore, the Defendant’s “reasonable proof” was supported by County Court opinions throughout the State of Florida. Although it is not the facts in this case, Plaintiff’s argument that Defendant did not have “reasonable proof” to deny the claim and acted in bad faith would hold more ground if the denial based upon Box 31 had occurred after the Cahill ruling was issued.
As noted in Stand-up MRI, supra, “. . .The Defendant did nothing wrong here. They were under a contract to the insured for a limited amount of benefits. They paid that amount in toto. They are not responsible for the insured’s over-use of the policy. The Defendant did not gain anything out of their actions. They fully performed their contract with the insured. It is to the insured that the assignees should look for any additional payments.”
Accordingly, Final Judgment in this case is hereby entered in favor of the Defendant, USAA CASUALTY INSURANCE COMPANY.
The Plaintiff shall take nothing in this action, and the Defendant shall go hence forth without day.
The Court reserves jurisdiction to determine and award reasonable attorney’s fees and costs.
