19 Fla. L. Weekly Supp. 382a

Online Reference: FLWSUPP 1905GASKInsurance — Personal injury protection — Demand letter — PIP statute does not require that medical provider compute exact amount owed or reflect prior payments by insurer in demand letter — Demand letter which included HCFA claim form that provided insurer with all information needed to properly process claim complied with statute despite failure to indicate exact amount owed and to account for prior payments

EBM INTERNAL MEDICINE A/A/O JASMINE GASKIN, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 16-2011-SC-001433-XXXX-MA. December 9, 2011. Honorable Angela Cox, Judge. Counsel: Adam Saben, Shuster & Saben, Miami, for Plaintiff. James Rinaman, James C. Rinaman & Associates, Jacksonville, for Defendant.

ORDER GRANTING PLAINTIFF’S MOTION FORSUMMARY JUDGMENT AND DENYING DEFENDANT’SCROSS-MOTION FOR SUMMARY JUDGMENT AS TOCOMPLIANCE WITH F.S. 627.736 (10) (DEMAND LETTER)

THIS CAUSE came before the Court for hearing on November 21, 2011 on Plaintiff’s and Defendant’s Cross-Motions for Summary Judgment on compliance with Florida Statutes § 627.736 (10). The Parties agree that there are no material disputed issues of fact and this matter may be disposed of as a matter of law. The Court, having reviewed the motions and entire Court file; relevant legal authorities; heard argument, and been sufficiently advised in the premises, finds as follows:Background

This is a case for unpaid P.I.P. benefits. The claimant received medical services from Plaintiff from February 1, 2010 to March 9, 2010 for injuries sustained in an automobile accident on December 29, 2009. Prior to filing a lawsuit seeking the unpaid PIP benefits, Plaintiff sent Defendant a Pre-suit Demand Letter pursuant to § 627.736(10) for the above-referenced dates of service and attached the CMS-1500 forms for said dates. The Plaintiff also noted the total amount of charges incurred for treatment rendered to the claimant in the Pre-suit Demand Letter. The Demand Letter did not reference prior payment made by the Defendant, nor did it attempt to compute the exact amount owed by the Defendant.

The instant action was filed on or about March 11, 2011. In its Answer, Defendant raised the affirmative defense of failure to comply with § 627,736(10) and filed a summary judgment as to said issue, as did the Plaintiff file a summary judgment on the same issue. The Defendant’s main contentions are that the Plaintiff’s Demand Letter failed to include any prior payments and that the Demand Letter fails to state the exact amount the Plaintiff says it is owed. Plaintiffs main contentions are that the Demand Letter complied with § 627.736(10) as there is no statutory requirement to include prior payments made and that attaching the CMS-1500 forms to the Demand Letter constitutes the requisite “itemized statement” from which the Defendant can review the exact amounts at issue in a given case.Legal Conclusions:Compliance with § 627.736(10)

1. A reading of the relevant provision of § 627.736(10)(a), Florida Statutes, (2008), states, in pertinent part:

“(a) As a condition precedent to filing any action for benefits under this section, the insurer must be provided with written notice of an intent to initiate litigation. Such notice may not be sent until the claim is overdue, including additional time the insurer has to pay the claim pursuant to paragraph (4)(b).

(b) The notice required shall state that it is a “demand letter under s. 627.736(10)” and shall state with specificity:

1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured.

2. The claim number or policy number which such claim was originally submitted to the insurer.

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) . . . may be used to as the itemized statement.” (emphasis added)

2. In this case, there is no dispute that the Plaintiff attached the CMS-1500 HCFA forms to the Demand Letter. The Defendant posits that the Plaintiff has not complied with the provisions of F.S. § 627.736 (10) since it did not state that “exact amount owed”, nor did the Plaintiff account for any prior payments made by the Defendant in its Pre-suit Demand Letter. The Court notes that there is no language contained in § 627.736(10) that requires the medical provider to compute the exact amount owed or that a Demand Letter reflect prior payments made by the insurer. In fact, the Court is unclear, assuming it accepted the Defendant’s interpretation of F.S. § 627.736(10), how a claimant is supposed to be able to adjust a PIP claim to make a determination as to the exact amount owed. When factors such as application of the deductible, knowledge as to the order in which bills were received from various medical providers, and whether the claimant purchased a MedPay provision on a policy (as well as other issues) are unknown to the medical provider, knowledge as to the exact amount owed is virtually impossible. A strict construction of the statute only says that a pre-suit demand must specify “[t]o the extent applicable . . . an itemized statement specifying each exact amount . . .”. With the various factors that must be considered by the carrier when determining the exact amount to pay on a claim, and the fact that this information is readily available to the carrier and virtually never readily available to the medical provider submitting a claim, it is not reasonable to expect the provider to know the “exact amount owed” since said amount could vary amongst PIP applicants (depending on the language of each individual policy). Further, the Defendant fails to convince this Court of the consequence of failing to list the exact amount owed. This Court could surmise endless scenarios where the provider (or claimant) would need to know certain information in order to properly compute the exact amount owed based on a multitude of factors, including the ones listed above.¹ Additionally, requiring the medical provider to speculate as to the exact amount owed is inconsistent with the legislative intent of § 627.736(10), which is to provide “swift and virtually automatic payments” of PIP benefits, Custer Medical Center v. United Automobile Insurance Company, 62 So.3d 1086 (Fla. 2011) [35 Fla. L. Weekly S640a]. This Court finds that the Defendant’s interpretation of F.S. § 627.736(10) creates a system where compliance with the Pre-suit Demand Letter requirement is not virtually automatic, but virtually impossible.

3. This Court reviewed First Coast Medical Center a/a/o Barbara Derouen v. State Farm Mutual Automobile Insurance Company, 17 Fla. L. Weekly Supp. 118a (4th Judicial Circuit, Duval County Order of Judge Brent Shore, November 12, 2009). In that case, State Farm’s position was that the Plaintiff’s Pre-suit Demand Letter did not satisfy a condition precedent because it failed to state exact amount owed. The Plaintiff did attach the CMS-1500 forms, just like the Plaintiff did in our case. In both cases, the Defendant paid certain benefits pursuant to the Medicare Part B fee schedule, and by doing so, Defendant’s position was that it satisfied the terms and conditions of the insurance policy at issue in the lawsuit. As stated in Derouen, “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”. In our case, Defendant was totally aware of what it paid the Plaintiff and the reasons for doing so. Plaintiff attached the relevant bills to its Demand Letter and also gave the Defendant various formulas for Defendant to compute the exact amount owed (which it was not even required to do) based on pieces of information known to the carrier, but unknown to the provider. Just like in the Derouen case, there should be “no confusion on the part of the Defendant” as to what it could have paid to avoid litigation in this case. State Farm chose to stand on its decision to pay the amounts as stated in its Explanations of Benefits and reiterated in its Demand Letter response to the Plaintiff Also see, Professional Diagnostic Reading a/a/o Sol Ivette Orengo-Reyes v. United Services Automobile Association, (Order of Orange County Judge Heather Higbee, case number 10-SC-3130-O, dated August 29, 2011) [19 Fla. L. Weekly Supp. 203a]; Professional Diagnostic Reading a/a/o Vanessa Rosa v. USAA Casualty Insurance Company, (Order of Orange County Judge Heather Higbee, case number 10-SC-2856-O dated March 28, 2011) [19 Fla. L. Weekly Supp. 205a]; Kadosh Medical Services, Inc. a/a/o Davila Perez v. State Farm Fire & Casualty Company, (Order of Miami-Dade County Judge Ana Maria Pando, case number 09-4494-SP 21 dated June 7, 2011) [19 Fla. L. Weekly Supp. 207b].

4. The responsibility to adjust the claim is on the carrier, not the provider. Once the carrier reaches a decision to pay, deny, or reduce a claim, it advises the provider with an Explanation of Benefits, which details why the claim was paid, denied, or reduced. If the provider takes issue with the decision made by the carrier, it may file suit against the carrier for unpaid PIP benefits. In this case, Plaintiff’s Demand Letter does, in fact, meet all of the statutory requirements under §627.736(10), in that Plaintiff attached an itemized statement which sets forth the name of the medical provider who rendered treatment and services, and each exact amount, date of treatment, service or accommodation, and the type of benefit claimed to be due. In short, the Plaintiff provided the Defendant with all the information necessary to properly process the claim in compliance with Florida Statute § 627.736 (10).

5. The Plaintiff relies on MRI Associates of America, LLC a/a/o Ebba Register v. State Farm Fire & Casualty Company, 61 So.3d 462 (Fla. 4th DCA, June 24, 2011) [36 Fla. L. Weekly D960b], wherein the Fourth District clearly states that a provider may use the health insurance claim form as the itemized statement, which is exactly what the Plaintiff did in this case. See, MRI Associates (Ebba Register) at 465. This Court finds that attaching a HCFA claim form, as noted is acceptable in Ebba Register, satisfies the legislative intent of F.S. §627.736(10), as it places all parties as to the amount at issue. That is, the provider is to attach all the bills previously submitted that are at issue to its Demand Letter and the insurer is given a 30-day window to review the specific charges at issue for a second time and determine whether any additional PIP benefits are due, or if it chooses to stay on its original decision as listed in its Explanation of Benefits. Until that time period runs, litigation cannot commence. Therefore, as to satisfying the requirements of F.S. §627.736(10), this Court finds that the Plaintiff’s actions in this case are in accord with Ebba Register and in accord with F.S. §627.736(10).

Therefore, it is hereby ORDERED AND ADJUDGED that Plaintiff’s Motion for Summary Judgment is GRANTED and Defendant’s Cross-Motion for Summary Judgment is DENIED.

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¹For example, if the provider lists the exact amount it thinks it is owed, and that amount is incorrect, is the Demand Letter deficient? If the Demand Letter is exactly correct as to the amount owed (at 80% of the amount billed), but the insurer chooses to apply the Medicare Part B Fee Schedule, is the Demand Letter deficient? Since the application of a deductible (and therefore the exact amount owed) may depend on the status of the claimant, is the provider supposed to be enlightened enough to know this necessary information in order to compute the exact amount owed? Even if the provider somehow knew whether the deductible applied to a claimant, the exact amount owed would still depend on the order in which the bills were received and whether all the bills received were timely and proper. These are a few of the scenarios where the amount owed may depend on information not readily in the possession of the medical provider, but should commonly be in the possession of the insurance carrier.

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