21 Fla. L. Weekly Supp. 487b
Online Reference: FLWSUPP 2106LEXCInsurance — Personal injury protection — Summary judgment — Reasonableness of charges — Opposing affidavits filed by insurer did not preclude summary judgment in favor of medical provider on issue of reasonableness of charges where affidavits relied relying on Medicare fee schedule to prove unreasonableness of charges, policy was purchased prior to effective date of legislation allowing such schedules to be used as alternative reimbursement method if insurers elected such method in policies, and insurer had not elected to rely on Medicare fee schedule in its policies
HIALEAH MEDICAL ASSOC., INC., A/A/O ANA LEXCANO, Appellant, v. UNITED AUTOMOBILE INSURANCE COMPANY, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 12-229 AP. L.C. Case No. 09-002910 CC 05. March 7, 2014. An appeal from a decision of the County Court for Miami-Dade County Florida. Counsel: Marlene S. Reiss, Law Offices of Marlene S. Reiss, P.A., for Appellant. Lara J. Edelstein and Michael Neimand, Office of the General Counsel, United Automobile Insurance Company, for Appellee.
(Before FIRTEL, FREEMAN, and ARZOLA, JJ.)
(ARZOLA, Judge.) Appellant Hialeah Medical Associates, Inc. (“Hialeah Medical” or Provider) is the assignee of Ana Lexcano, the insured of Appellee United Automobile Insurance Company (“United Auto” or Insurer). Hialeah Medical claimed PIP benefits for treatment rendered to Ms. Lezcano for injuries from a June 23, 2008 automobile accident.
After receiving Hialeah Medical’s demand letter, United Auto informed the provider that its charges were in excess of the amount allowable pursuant to the Medicare Part B Fee Schedule. After an IME, United Auto sent Hialeah Medical a check for $1,183.18, which represented 80% of the Medicare Part B Fee Schedule for bills through July 21, 2008. The provider cashed that check as partial payment, and in March 2009, sued for the remaining benefits due.
On March 31, 2009, United Auto filed a Partial Confession of Judgment in the amount of $2,820.00, for dates of service from June 25, 2008, through October 20, 2008, minus the $1,183.18 already paid. At that point, United Auto tendered additional checks in the amount of $1,636.82 and $126.43 for benefits and interest. The first check was characterized as being “for full & final payment of benefits and interest”. Additionally, the partial confession of judgment stated that: “Defendant hereby stipulates to Plaintiff’s entitlement to attorney’s fees and costs as related to the litigation of said Complaint, provided Plaintiff complies with Rule 1.525”. The provider refused to cash the checks for fear of accord and satisfaction. Consequently, the checks were returned to United Auto with a letter explaining that the checks were not being accepted because Hialeah Medical wanted to pursue the balance it feels it was owed.
Hialeah moved for summary judgment as to its bills on the basis of RRN (reasonable, related and necessary). In response, United Auto filed the affidavit of its litigation adjuster, who stated that the provider’s charges were above the usual and customary fees allowed by the Medicare Fee schedule. Hialeah moved to preclude United Auto from using the Medicare Part B Fee Schedule to establish that its bills were not reasonable. The basis for this argument was that Ms. Lezcano’s policy pre-dated the 2008 PIP statute and that United Auto’s policy failed to indicate it was relying on the Medicare Part B Fee Schedule when reimbursing medical bills. The motion to preclude United Auto from using the Medicare Fee Schedule was denied without prejudice.
On June 30, 2010, Hialeah Medical obtained a partial summary judgment on relatedness, but the trial court reserved ruling on the pricing of the bills and denied summary judgment as to medical necessity on all treatment after July 21, 2008. The trial court also ruled that United Auto could not rely on the Medicare Part B fee schedule to prove the reasonableness of the provider’s bills, but gave the insurer an additional 10 days to file an amended affidavit.
On July 9, 2010 United Auto filed an amended affidavit from its litigation adjuster in which he provided a “breakdown” of his opinion regarding the reasonableness of the charges. Once again, the adjuster reiterated that he considered the 2008 Medicare Fee Schedule. After this filing, Hialeah Medical filed a supplemental motion for summary judgment on pricing, arguing again that the adjuster could not have relied on the 2008 fee schedule as it did not exist in 2007 when the policy was issued.
The case went to trial on June 6, 2011. Prior to the start of trial, Hialeah Medical argued in support of its supplemental motion for summary judgment to exclude the adjuster testimony that relied on the Medicare Part B Fee Schedules. The Court denied the motion and the trial proceeded. At trial, United Auto’s then-current litigation adjuster testified that United Auto based its pricing on fee schedules in the community, which included the Medicare fee schedules. On June 9, 2011, the jury returned a verdict in favor of Hialeah Medical in the amount of $1,478.92. This amount is only 4 or 5 cents less than the amount allowed by United Auto when calculating the amount owed using the Medicare fee schedule.
Post-trial, the trial court entered a final judgment in favor of United Auto on the basis that the statutory 80% of $1,478.92 ($1,183.14) is four cents less than United Auto’s pre-suit payment, $1,183.18. Hialeah Medical filed post-trial motions, seeking a new trial, or in the alternative, JNOV. The Court subsequently denied these motions on March 2, 2102. Hialeah Medical also moved to vacate the final judgment. The Court held a hearing on February 16, 2012, and asked the parties to brief the issue of who prevailed for purposes of entitlement to attorney’s fees. On March 30, 2012, the trial court entered an order vacating the final judgment in favor of United Auto. The trial court entered final judgment in favor of Hialeah Medical in the amount of $1,636.82 (the confession amount) plus interest in the amount of $393.19, for a total of $2,030.01. Based on that order, Hialeah Medical moved for attorney’s fees and costs on April 2, 2012.
United Auto moved for relief/clarification, contending that the final judgment was inaccurate. The trial court held another hearing on April 25, 2012 on this motion, and subsequently reversed itself on May 10, 2012, and entered a final judgment in favor of United Auto. In the order, the trial court ruled that the Partial Confession of Judgment filed by United Auto had no force and effect; that after applying the agreed credit of $1,183.18 to the jury’s award, the net verdict is minus four cents, resulting in a judgment for the defendant [United Auto]; that the March 30, 2012 order was written in error; and, that final judgment is now entered in favor of United Auto. Hialeah Medical now appeals the denial of its motion for summary judgment on pricing and the [last] final judgment in favor of United Auto.
The primary issue before this panel is whether or not the trial court erred in denying Hialeah Medical’s motion for summary judgment and supplemental motion for summary judgment on pricing/reasonableness. In the alternative, in the event this panel concurs with the trial court on the latter issue, we are asked to reverse the trial court and enter judgment in favor of Hialeah Medical based on United Auto’s Confession of Judgment.
Hialeah Medical contends that it was entitled to summary judgment on the issue of the pricing/reasonableness of its pre-IME bills.1 United Auto admitted to using the 2008 Medicare Part B Fee Schedule to determine payment to the provider in response to the provider’s demand letter. The 2008 Medicare Part B Fee Schedule could not be applied retroactively to a policy purchased in 2007. See Menendez v. Progressive Express Ins. Co. Inc., 35 So. 3d 873 (Fla. 2010) [35 Fla. L. Weekly S81a]; Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996) [21 Fla. L. Weekly S102c]. Also, an insurer must elect the use of the Medicare Fee Schedule in its policy to use such fee schedules as its method to calculate reimbursement. See Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a].
Summary judgment should have been granted, the provider contends, because United Auto failed to create a genuine issue of material fact when it filed the affidavits of its adjusters, Mr. Sarabi and Ms. Serano. In both of those affidavits, the adjusters admitted relying on the Medicare Fee Schedule, in addition to other things. The affidavits were merely an attempt (which succeeded at the trial court level) to create a paper issue and avoid summary judgment, a course of action impermissible under the law; See Schneider v. Slichter, 917 So. 2d 299 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1855a]; Reflex, N.V. v. UMET Trust, 336 So. 2d 473 (Fla. 3d DCA 1976). A party may not create “paper issues” merely to avoid summary judgment. Courts may “pierce the curtain of the paper issues” and grant summary judgment where genuine issues of material fact do not appear. Schneider at 300 (citations omitted). Neither adjuster, Mr. Sarabi nor Ms. Serano, testified in their affidavits based on relevant or sufficient data, and thus, such testimony should not have been allowed.
The trial court had initially ruled correctly that United Auto could not use the Medicare Fee Schedule. The amended affidavit showing reliance on this same schedule should not have precluded Hialeah Medical’s motion for summary judgment based on reasonableness. Medicare Fee Schedules are not relevant in PIP cases, and should not be used. In 2008, the legislature allowed such schedules to be used as an alternative reimbursement method that insurers may use if they elect such a fee schedule in their policies as their chosen method of calculating reimbursement. See §627.736(5)(a)2(f), Fla. Stat.(2013); GEICO Indem. Co. v. Virtual Imaging Svcs., Inc., 79 So. 3d 55 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a]. Here, when the insurance policy was issued in 2007, the law had not been changed, nor had United Auto elected to rely on the Medicare Fee Schedule in its policies. As such, United Auto was prohibited from relying on the 2008 Medicare Fee Schedule in response to the motion for summary judgment. Accordingly, we conclude that the trial court did err in denying Hialeah Medical’s motion for summary judgment and supplemental motion for summary judgment as to pricing/reasonableness.
We REVERSE the denial of Hialeah Medical’s motion for summary judgment and supplemental motion for summary judgment on pricing/reasonableness, as well as the subsequent Final Judgment entered on behalf of United Auto, and REMAND for entry of summary judgment in favor of Hialeah Medical on the pricing/reasonableness of its pre-IME bills2.
We REVERSE the trial court’s order awarding United Auto’s attorney’s fees and costs. Where a final judgment is no longer enforceable, an attorney fee award in the lower court, based on that judgment is likewise not enforceable. See Nevarez v. Friskney, 819 So.2d 992, 993 (Fla. 5th DCA 2002) [27 Fla. L. Weekly D1506a]; Marty v. Bainter, 727 So.2d 1124, 1125 (Fla. 1st DCA 1999) [24 Fla. L. Weekly D695a]. We also REVERSE the trial court’s denial of Hialeah Medical’s entitlement to attorney’s fees.
We REMAND this matter for determination of Hialeah Medical’s attorney’s fees and costs in the underlying case, plus a determination of reasonable appellate attorney’s fees and costs to Hialeah Medical as the prevailing party pursuant to Fla. Stat. §627.428(1) and Fla. R. App. P. 9.400. United Auto’s motion for appellate attorney’s fees is DENIED. (Judges FIRTEL and FREEMAN concur.)
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1This appears to be the only issue remaining because Appellant obtained a partial summary judgment on relatedness and United Auto never challenged the medical necessity of the pre-IME bills.
2In view of this decision, this Court does not address the alternative relief requested by Hialeah Medical regarding the effect of United Auto’s Confession of Judgment.
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