21 Fla. L. Weekly Supp. 794b

Online Reference: FLWSUPP 2108ROMAInsurance — Personal injury protection — Coverage — Emergency services — Deductible — Because insurer is mandated by statute to reserve $5,000 for emergency medical service providers, insurer should not have applied claim filed by plaintiff provider within that classification to deductible — Exhaustion of benefits is not defense to claim for portion of emergency medical service provider’s bill applied to deductible

EMERGENCY PHYSICIANS OF CENTRAL FLORIDA, LLP, as assignee of Ivan Romano, Plaintiff, v. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2012-SC-002128-O. March 26, 2014. Andrew L. Cameron, Judge. Counsel: Mark A. Cederberg, Bradford Cederberg, P.A., Orlando, for Plaintiff. Neil Andrews, Orlando, for Defendant.

This order affirmed by circuit court on appeal; circuit court appellate order was quashed by district court of appeals. 41 Fla. L. Weekly D888b (Progressive Express Ins. Co. v. Emergency Physicians of Central Florida, 5D15-3719; 4-8-2016)

ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY FINAL JUDGMENT AND GRANTING SUMMARY JUDGMENT IN FAVOR OF PLAINTIFF AS TO DEFENDANT’S EXHAUSTION OF BENEFITS DEFENSE

THIS MATTER having come before this Honorable Court on Defendant’s Motion for Summary Final Judgment Based on Exhaustion of Benefits and this Honorable Court having heard arguments of counsel, reviewed the evidence, relevant Florida statutes and case law presented and being otherwise fully advised in the premises, makes the following findings:Factual Background

This case presents with facts that are not in dispute. The Defendant, Progressive Express Insurance Company (“Progressive”) issued a policy of insurance in favor of its assignor, Ivan Romano, which provided $10,000.00 in Personal Injury Protection Benefits with a $1,000.00 deductible. Mr. Romano was involved in a motor vehicle accident on September 25, 2011 in which he sought treatment from various health care providers including the Plaintiff in this matter, Emergency Physicians of Central Florida (“EPCF”). EPCF is a group of physicians licensed under chapter 458 and/or chapter 459 who provide emergency services and care as defined in Florida Statute 395.002(9) as referenced in Florida Statute 627.736(4)(c).

Upon being placed on notice of this accident on September 28, 2011, Progressive opened a PIP claim and began processing bills. The first two (2) bills received by Progressive were from Medical Center Radiology Group in the amounts of $375.00 and $102.00. Progressive applied both of these bills to the insured’s $1,000.00 deductible. The next bill received by Progressive was from EPCF, for emergency services and care provided to Mr. Romano, in the amount of $639.00. This bill was received by Progressive on October 13, 2011 within 30 days’ notice of the loss. The Defendant then applied EPCF’s bill to the remainder of the insured’s deductible and paid 80% of the remainder resulting in a payment to Plaintiff of only $92.80. The parties disagree whether this was proper. Progressive contends that it was proper, based on the fact that EPCF’s bill was the third bill received and some of the deductible still remained. EPCF contends that it was not proper on the basis that EPCF is a protected provider under Fla. Stat. 627.736(4)(c) and its bills are to be paid out of the $5000.00 reserve of PIP benefits created for 4(c) providers, once the deductible is otherwise satisfied by non-protected providers’ bills.

Thereafter, Progressive received, processed and paid additional bills from non-protected providers and exhausted benefits on or about November 15, 2011. Progressive contends that based on the authority of Simon v. Progressive American Ins. Co., 904 So.2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b] and Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So.2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a], once benefits are exhausted, the Plaintiff’s claim is extinguished, as Progressive has satisfied its contractual obligations to its insured. EPCF contends that Progressive failed to follow the clear language contained in Fla. Stat. 627.736(4)(c) by failing to reserve for payment the timely submitted bill of a provider of emergency services and care. The Plaintiff contends that had Progressive followed the clear mandate of Fla. Stat. 627.736(4)(c), its bill could have, and should have, been paid in full. The Court agrees with Plaintiff and denies Defendant’s Motion for Summary Final Judgment and grants Summary Judgment to the Plaintiff on Defendant’s exhaustion of benefits defense.Conclusions of Law and Ruling

The issue presented is whether exhaustion of benefits is a defense to a claim by a provider of emergency services and care who timely submitted its bill for payment, and otherwise complied with the requirements set forth in Fla. Stat. 627.736(4)(c) which creates a mandatory reserve for payment of PIP benefits, but had its bill applied to the PIP deductible. The Court finds that exhaustion of benefits is not a defense to such claim under this scenario.

On January 1, 2008, the Florida legislature enacted a revised PIP statute which created a mandatory set-aside of $5,000.00 of the $10,000.00 in PIP benefits, for the payment of bills submitted by a special class of provider within a particular time frame. Florida Statute §627.736(4)(c) states:

Upon receiving notice of an accident that is potentially covered by personal injury protection benefits, the insurer must reserve $5,000 of personal injury protection benefits for payment to physicians licensed under chapter 458 or chapter 459 or dentists licensed under chapter 466 who provide emergency services and care, as defined in s. 395.002(9), or who provide hospital inpatient care. The amount required to be held in reserve may be used only to pay claims from such physicians or dentists until 30 days after the date the insurer receives notice of the accident. After the 30-day period, any amount of the reserve for which the insurer has not received notice of a claim from a physician or dentist who provided emergency services and care or who provided hospital inpatient care may then be used by the insurer to pay other claims. The time periods specified in paragraph (b) for required payment of personal injury protection benefits shall be tolled for the period of time that an insurer is required by this paragraph to hold payment of a claim that is not from a physician or dentist who provided emergency services and care or who provided hospital inpatient care to the extent that the personal injury protection benefits not held in reserve are insufficient to pay the claim. This paragraph does not require an insurer to establish a claim reserve for insurance accounting purposes. (Emphasis added.)

Fla. Stat. §627.736(4)(c) represents a departure from, and an exception to, the common law of the State governing exhaustion of benefits. That common law is outlined in cases such as Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So.2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a] and the case upon which it is at least partially based, Simon v. Progressive Express Ins. Co., 904 So.2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]. The Court is aware of, and has taken into consideration, both the Progressive American Ins. Co. v. Stand-Up MRI of Orlando decision and the Simon v. Progressive Express Ins. Co. decision as they relate to exhaustion. Notably, these decisions neither addressed the 2008 statute (i.e. Section (4)(c)), nor involved a statutorily protected class of provider. Accordingly, because these decisions pre-date the 2008 statutory revision adding Section (4)(c), they have no applicability to the mandatory reserve requirement now set forth in Section (4)(c). Implicit is the acknowledgment that the “new” 2008 version of Fla. Stat. §627.736 (including subsection (4)(c)) applies to the instant matter and the question presented is how to apply subsection (4)(c) of the PIP Statute. Up until the effective date of subsection (4)(c), insurers had no prior obligation to reserve benefits for any class of medical provider under the PIP Statute. Simon, supra. Now, subsection (4)(c) requires reservation of $5,000 of PIP benefits for the payment of a class of providers into which Plaintiff indisputably fits. Id. Indeed, the phrase used in the law to describe the insurer’s obligation is “must reserve,” which is mandatory in nature. Given the foregoing, Defendant here was required to reserve benefits for the payment of Plaintiff’s claim by virtue of Plaintiff’s status as a provider for whom the subsection requires reservation of benefits. When interpreting a Statute, Courts are required to apply the plain meaning of the language used and apply that language to the circumstances presented by a dispute under that language. Saleeby v. Rock Elson Const., Inc., 3 So.3d 1078, 1082 (Fla. 2009) [34 Fla. L. Weekly S106a]. Where the language used is plain, unequivocal and not subject to reasonable differences as to its meaning, there is no occasion to employ other rules of statutory construction and again, the plain meaning of the language used in the statute controls its application to the facts presented. Vreuls v. Progressive Employer Services, 881 So.2d 688, 690 (Fla. 1st DCA 2004) [29 Fla. L. Weekly D1990b]. Here, the language of Fla. Stat. §627.736(4)(c) is plain, unequivocal and not subject to reasonable difference as to its meaning. With regard to the statutory provision at issue in this case, Fla. Stat. §627.736(4)(c), as cited above, the Courts have already determined that the statutory provision was plain, unequivocal, clear and unambiguous.

In reaching its decision in this case, the Court makes specific note of the fact that Fla. Stat. §627.739 was amended in 2003, followed by amendment in 2008 to Fla. Stat. §627.736 to add subsection (4)(c). This Court believes that the subsequent amendment of Fla. Stat. §627.736(4)(c) demonstrates the Legislature’s intent to provide an additional level of protection for emergency care providers, thus ensuring payment of their invoices/bills. Conversely, to accept Defendant’s argument would render subsection (4)(c) meaningless. There is no logical interpretation of subsection (4)(c)(which requires providers of emergency services and care to submit their invoices/bills within thirty (30) days in order to gain the protection of the protected class) that would lead this Court to find that the Plaintiff’s invoice/bill is not protected by a reservation and should be first applied to the deductible. In fact, had Plaintiff waited more than thirty (30) days to submit its invoice/bill in hopes of avoiding the deductible, the Plaintiff would have lost its standing to qualify as a member of the protected class. For the Court to find Legislative intent in such a penalty would be absurd. Here, the Plaintiff complied with the conditions of subsection (4)(c), thereby qualifying as a member of the protected class, and yet was unpaid for most of its invoice/bill because most of its invoice/bill was applied toward the deductible. It is illogical to suggest the Florida Legislature created a special class, provided for a special fund to be set aside and reserved for payment of PIP benefits to that special class, set a specific time frame during which the special class member is to submit qualifying invoices/bills then penalize the special class member for the timely submission of its claim by allowing it to be applied to the deductible and thus go unpaid.

Plaintiff’s argument that non-protected providers’ invoices/bills would have sufficiently satisfied the deductible is well-reasoned. In this case, neither Orlando Health, Inc. nor First Choice Medical Rehab Center, P.A. qualified as members of the protected class established by Fla. Stat. §627.736(4)(c). The invoices/bills of those two (2) non-protected providers should have been applied toward the deductible, thereby allowing payment in full to Plaintiff as intended under Fla. Stat. §627.736(4)(c). See Emergency Physicians of Central FL, LLP, a/a/o Asmaa Karani v. Progressive American Insurance Company, 20 Fla. L. Weekly Supp. 689a (Fla. 9th Jud. Cir. in Orange County, January 30, 2013); Emergency Physicians of Central Florida, LLP, a/a/o Oriol Saintilma v. Direct General Insurance Company, 19 Fla. L. Weekly Supp. 948a (Fla. 18th Jud. Cir. in Seminole County, July 16, 2012); Emergency Physicians of Central Florida, LLP, a/a/o Tina Watts v. Direct General Insurance Company, 19 Fla. L. Weekly Supp. 947a (Fla. 18th Jud. Cir. in Seminole County, July 16, 2012); Emergency Physicians of Central Florida a/a/o Adriel Rodriguez v. USAA General Indemnity Co., 20 Fla. L. Weekly Supp. 697a (Fla. 18th Jud. Cir. in Seminole County, February 27, 2013)(wherein Judge Collins reversed herself in Emergency Medical Associates of Florida, LLC a/a/o Recy Cochran v. Allstate Indemnity Company (Fla. 18th Jud. Cir. in Seminole County, November 13, 2012) [20 Fla. L. Weekly Supp. 186a]; Emergency Physicians of Central Florida, LLP a/a/o Tina House v. Mercury Insurance Company of Florida, Case No. 2011-SC-8734 (Fla. 9th Jud. Cir. In Orange County, October 2, 2013); Emergency Medical Associates of Florida, LLC a/a/o Janith Suddath v. Mercury Insurance Company of Florida, Case No. 2012 31231 COCI (Fla. 7th Jud. Cir. in Volusia County, August 6, 2013); Emergency Medicine Professionals, P.A. a/a/o Michael Griffin v. Progressive Select Insurance Company, Case No. 2012 31961 COCI (Fla. 7th Jud. Cir. in Volusia County, May 22, 2013) and Emergency Physicians of Central Florida, LLP a/a/o Raymond Damus v. Progressive American Insurance Company (Fla. 9th Jud. Cir. in Orange County, December 9, 2013).

Although Plaintiff in this case met all of the conditions necessary under Fla. Stat. §627.736(4)(c) to gain protected payment status, Defendant exhausted benefits by making payments to “unprotected” providers. Exhaustion of benefits is not a defense under this set of facts. Judges from this circuit, as well as other circuits, have ruled consistently on this issue. See Orthopaedic Clinic of Daytona Beach, P.A. a/a/o Charles Murray v. State Farm Mutual Automobile Insurance Company, 17 Fla. L. Weekly Supp. 1145a (Fla. 7th Jud. Cir. 2010)(rejecting State Farm’s exhaustion defense finding that State Farm was required to reserve $5,000 for payment to physicians licensed under chapter 458; whether Defendant acted in good faith is not the issue; issues boil down to whether Plaintiff timely filed its claim, whether the claim was for “emergency services and care,” whether the services were related to the accident and whether the charges were reasonable); Orthopaedic Clinic of Daytona Beach, P.A. a/a/o William Futch v. State Farm Mutual Automobile Insurance Company, Case No. 2012-31889 COCI (Fla. 7th Jud. Cir. 2011)(adopting the conclusions of law in Murray); Emergency Physicians of Central Florida, LLP a/a/o Barbara Maughan v. USAA, 19 Fla. L. Weekly Supp. 746a (Fla. 9th Jud. Cir. in Osceola County 2012)(noting that Progressive American Ins. Co. v. Stand-Up MRI of Orlando and Simon v. Progressive Express Ins. Co. interpreted a version of the PIP Statute prior to the changes in 2008 (to add (4)(c)) and finding that since the Plaintiff’s claim was timely submitted and met the definition of emergency services and care, exhaustion of benefits was not a defense to the matter) and Florida Emergency Physicians Kang and Associates, M.D., P.A. a/a/o Oswaldo Pedroza v. GEICO General Insurance Company, Case No. 2011-SC-6994-O (Fla. 9th Jud. Cir. in Orange County- pending hearing on certification and executed Order from Judge Faye Allen)(finding that the emergency physician’s bill was improperly applied to the PIP deductible in derogation of Fla. Stat. §627.736(4)(c) and therefore exhaustion of benefits was not a defense to the claim). The Court also finds persuasive several recent court rulings addressing analogous situations rejecting the auto insurance carriers’ defense of “exhaustion of benefits” involving improper payments of bills under PIP coverage. See GEICO Indemnity Company v. Gables Ins. Recov., Inc. a/a/o Rita Lauzan, 20 Fla. L. Weekly Supp. 862a (Fla. 11th Cir. Ct. App. 2013)(finding that GEICO’s payment was wrongful because it did not make payment in accordance with the clear and unambiguous language of its policy and finding that “an insurer’s exhaustion of PIP benefits, in and of itself, does not shield the insurer from liability for benefits that exceed the policy limits) citing to DCI MRI, Inc. a/a/o Endong Zhao v. State Farm Mut. Auto. Ins. Co., Case No. 2009-SC-2755 SB (Palm Beach Cty. Ct., November 5, 2010)(rejecting exhaustion defense and granting summary judgment in favor of insured where State Farm paid in accordance with permissive reimbursement limitation in Fla. Stat. §627.736(5)(a)(2)); Virtual Imaging Services, Inc. a/a/o Aurora Mitev v. USAA Cas. Ins. Co., Case No. 07-12468-SP-23(a)(Miami-Dade Cty. Ct., March 12, 2012) [19 Fla. L. Weekly Supp. 588a](rejecting exhaustion defense where USAA did not pay medical bills in order received and exhausted benefits to detriment of provider who earlier submitted bills) and Y.H. Imaging, Inc. v. Allstate Prop. & Cas. Ins. Co., Case No. 11-011193 COSO 60 (Broward Cty. Ct., November 7, 2012) [21 Fla. L. Weekly Supp. 445a](granting summary judgment to Plaintiff and rejecting exhaustion defense where Allstate paid bills out of order and depleted PIP benefits to detriment of provider who timely submitted earlier bills).

In conclusion, this Court agrees with Plaintiff and, pursuant to Carpineta v. Shields, 70 So.2d 573 (Fla. 1954), grants summary judgment in favor of Plaintiff on Defendant’s exhaustion of benefits defense and denies Defendant’s Motion for Summary Final Judgment on its exhaustion of benefits defense. By so ruling, this Court finds that PIP insurers are required to reserve $5,000 of the PIP benefits exclusively for payment to the protected class defined in Fla. Stat. §627.736(4)(c) and that the $5,000 reserve may be used only to pay the claims of the protected class of providers who timely submit their claim(s), and may not apply the amount of such claim(s) towards any PIP deductible. The Court finds that the deductible must be satisfied by application of the invoices/bills submitted to the insurer by non-protected providers, and upon satisfaction of the deductible in such manner, then the protected provider is entitled to have its invoice/bill paid. The Court further finds that exhaustion of benefits is not a defense to the protected provider’s claim if the protected provider has complied with Section (4)(c)(timely submission of bill for emergency services and care) and the Defendant applied the protected provider’s invoice/bill to the PIP deductible.

Accordingly, it is ORDERED AND ADJUDGED that:

Defendant’s Motion for Summary Final Judgment Based on Exhaustion of Benefits is hereby DENIED and Summary Judgment is GRANTED in favor of Plaintiff as to Defendant’s Exhaustion of Benefits defense.

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