19 Fla. L. Weekly Supp. 203a
Online Reference: FLWSUPP 1903ORENInsurance — Personal injury protection — Demand letter — Where medical provider attached HCFA claim form to demand letter, demand letter was sufficient
PROFESSIONAL DIAGNOSTIC READING A/A/O SOL IVETTE ORENGO-REYES, Plaintiff, v. UNITED SERVICES AUTOMOBILE ASS’N, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 10-SC-3130-O. August 29, 2011. Honorable Heather Higbee, Judge. Counsel: Adam Saben, Shuster & Saben, LLC, Miami, for Plaintiff. Reuven Herssein, Herssein & Herssein, North Miami, 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 July 27, 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 on September 30, 2008 for injuries sustained in an automobile accident on August 15, 2008. 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 date of service and attached the CMS-1500 form for said date of service. 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 Demand Letter did contain a paragraph headed with the words “”The Amount Due is equal to the amount billed, less any applicable deductible at 100% for PIP+MedPay or at 80% for PIP without MedPay coverage, less any prior payments”. The carrier responded to the Plaintiff’s Demand Letter advising the Plaintiff, “We are unable to process your request as it fails to comply with Florida Statute 627.736(10) in that the specified amount claimed of $300.00 is not overdue.” Nowhere in the Demand Letter response did the Defendant place the provider on notice that the Demand Letter failed to include prior payments made or failed to list the exact amount owed.
The instant action was filed on or about April 20, 2010. 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 a prior payment and that the Demand Letter fails to state the exact amount the Plaintiff says it is owed. The Plaintiff’s main contentions are that the Demand Letter complies with the requirements of F.S. § 627.736(10), and, even assuming the Demand Letter did not strictly comply (or even substantially comply), the Defendant waived the right to raise this defense since it did not put the Plaintiff on notice of any defects in its Demand Letter response.Legal Conclusions:Compliance with § 627.736(10)
1. The first issue before the Court is whether Plaintiff’s pre-suit demand letter complies with § 627.736(10)(a), Florida Statutes, (2008), which states in relevant 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.”(empharis added)
2. In this case, there is no dispute that the Plaintiff attached the CMS-1500 HCFA form to the Demand Letter.
3. The Defendant’s position is that this Court must “strictly construe” § 627.736(10). See, Luis Hernandez v. Progressive Express Insurance Company, (14 Fla. L. Weekly. Supp. 232c. Fla. 11th Judicial Circuit 2007).
4. Specifically, the Defendant argues that the Plaintiff has not complied with the provisions of F.S. § 627.736 (10) since it did not state that “exact amount owed” and failed to account for any prior payments made by the Defendant.
5. Defendant argues that the statutory requirements surrounding a demand letter are significant, substantive preconditions to bringing a cause of action for PIP benefits, and that the language of subsection 627.736(10)(b)(3) requires precision in a demand letter.
6. Taking a “strict construction” of the applicable statute, the Court notes that there is no language contained therein that requires the medical provider to compute the exact amount owed or that a Demand Letter reflect prior payments made by the insurer.
7. If the Court accepted the Defendant’s interpretation of F.S. § 627.736(10), a claimant would not be able to adjust a PIP claim to make a determination as to the exact amount owed with 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 claimant.
8. Often, knowledge as to the exact amount owed by the insurer is impossible.
9. 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 . . . .”
10. The Court is not free to edit statutes or add requirements that the legislature did not include. Meyer v. Caruso, 731 So.2d 118, 126 (Fla. 4th DCA 1999) [24 Fla. L. Weekly D990c].
11. In this case, the Defendant’s position was that the bill submitted by the Plaintiff was subject to a reduction to the Medicare Part B Fee Schedule.
12. As noted in Kingsway Amigo Insurance Company v. Ocean Health, Inc. 36 Fla. L. Weekly D1062a (Fla. 4th DCA May 18, 2001), whether an insurer can take advantage of the permissive language of F.S. § 627.736(10) depends on the wording of its policy at the applicable time.
13. Therefore, no provider (or claimant) can reasonably be expected to know the “exact amount owed” since said amount could vary amongst PIP applicants (depending on the language of each individual policy).
14. This is information easily obtainable by the insurer, but not the provider.
15. Additionally, in this case, the claimant purchased MedPay, which was also in effect at the time of the date of loss.
16. The amount owed in addition to the PIP payments under MedPay would change the “exact amount owed”.
17. So, even if the provider were able to figure out the exact amount owed under the Medicare Part B Fee Schedule (assuming the insurer chose to avail itself of the permissive language of the statute), that amount would still not be correct unless the provider was aware of the Medpay provision of the claimant’s policy.
18. Fla. Stat. §627.736 (10) states: 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 . . . The notice required shall state that it is a ‘demand letter under s. 627.736(10)’ and shall state with specificity . . . [t]o the extent applicable . . .[emphasis added] an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due [emphasis added].”
19. When the language of the statute is clear and unambiguous, and conveys a clear and definite meaning, the statute must be given its plain and obvious meaning. State of Florida v. Warren, 796 So.2d 489 (Fla. 2001) [26 Fla. L. Weekly S434b].
20. If the intent is clear from the content of the statute, the Court’s function is to interpret the act so as to effectuate that intent if the Court can do so by the application of acceptable rules of statutory construction. Armstrong v. City of Edgewater, 157 So.2d 422 (Fla. 1963). “To suggest that the requirements of the statute may be easily circumvented would be to thwart the legislative will”. Progressive Express Insurance Company, Inc. v. Louis R. Menendez, Jr. and Cathy Menendez, 979 So.2d 324, (Fla. 3d DCA 2008) [33 Fla. L. Weekly D811a] citing Ingersoll v. Hoffman, 589 So. 2d 223, 224 (Fla. 1991). The Florida Supreme Court, in Allstate Insurance Company v. Holy Cross Hospital, Inc., 961 So. 2d 328 (Fla. 2000) [32 Fla. L. Weekly S453a] observes:
21. 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 facts.
22. The legislative intent of § 627.736(10) 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].
23. In this case, Plaintiff’s Demand Letter of February 23, 2010 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).
24. As noted in Horizon Medical Group, Inc. v. United Automobile Insurance Company, 15 Fla. L. Weekly Supp. 823a (Fla. 11th Judicial Circuit April 16, 2008, Order of Judge Eli Breger), an insurer, such as the Defendant, which retains records as to amounts paid, the total amount of bills received, the order in which bills have been received, the manner in which bills have been applied to the deductible, and the remaining insurance benefits, is possessed of greater knowledge with regard to any given PIP claim as compared to an insured or medical provider to determine the amount which remains payable or may be payable under the policy of insurance.
25. Also see, Mauricio Chiropractic Group a/a/o Rafael Quinones v. USAA Casualty Insurance Group, 18 Fla. L. Weekly Supp 82b (Fla. 9th Judicial Circuit, September 1, 2010, Order of Judge Antoinette Plogstedt, “The statute does not require the Plaintiff, or any claimant, to provide an insurer, including the Defendant, with the exact amount of PIP benefits which are ultimately determined to be due in a specific claim and/or case nor does the statute state that any alleged accounting oversight nullifies an otherwise compliant demand. Such an interpretation would frustrate the legislative intent of the PIP statute; especially in this case where the Defendant was not prejudiced and was able to investigate the claim and determine which amounts were paid and which amounts were not.”)
26. The Defendant 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] for its position that the Demand Letter is deficient for not stating the exact amount owed.1
27. As in Ebba Register, the Defendant stated in its Demand Letter response that the payment was not overdue, therefore the Demand Letter was premature.
28. However, the Court stated that the health insurance claim form submitted by MRI Associates exceeded what was allowed by the statute. In footnote two of the opinion, the Court explains that, at the time of the submission of the bill a charge for an MRI “could not exceed 175 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001, subject to certain adjustments.”
29. In other words, when the medical service given was an MRI, and the service was provided before the 2008 amendment to the PIP statute, wherein the payment schedule was changed for all medical services, an MRI provider could determine the exact amount owed for an MRI and use the bill ledger (or a HCFA form) as the itemized statement attached to the Pre-suit Demand Letter.
30. The failure of the MRI provider (before 2008) to list the exact amount in its HCFA form (where the amount owed was clearly governed by statute) caused the Pre-suit Demand Letter in Ebba Register to be premature.
31. In the case before this Court, the service provided was not an MRI and the date of service is after the 2008 amendments to the PIP statute. To that extent, Ebba Register is inapplicable.
32. Conversely, the Court in Ebba Register 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.
33. 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).
34. At the hearing on the cross motions for Summary Judgment the Plaintiff raised the issue of waiver, arguing that USAA waived it’s deficient pre-suit demand letter defense.
35. The Court does find, however that both the response letter from USAA to the Plaintiff and the Affirmative Defenses raised in the pleadings preserve the issue of the defective demand letter defense.
36. The Court is entering the ruling listed below and making findings as further detailed above, but is not making a finding of waiver in this action.
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.
__________________
1This Court notes that the Ebba Register opinion was a denial by the Fourth District Court of Appeal on a second-tier writ of certiorari challenging the Order of a circuit court sitting in its appellate capacity. Finding that the circuit court applied the correct law, the Fourth District denied the writ. As the Fourth District noted,
In a second tier certiorari review of an appellate decision of a circuit court, a district court of appeal’s scope of review is narrow. As the supreme court recently wrote:
[W]hen a district court considers a petition for second-tier certiorari review, the “inquiry is limited to whether the circuit court afforded procedural due process and whether the circuit court applied the correct law,” or, as otherwise stated, departed from the essential requirements of law. The departure from the essential requirements of law necessary for granting a writ of certiorari is something more than a simple legal error. Rather, a district court should exercise its discretion to grant review only when the lower tribunal has violated a clearly established principle of law resulting in a miscarriage of justice.
Custer Med. Cir. v. United Auto Ins. Co. 62 So.3d 1086 (Fla. 2010) [35 Fla. L. Weekly S640a].
* * *
