21 Fla. L. Weekly Supp. 690a

Online Reference: FLWSUPP 2107COMPInsurance — Personal injury protection — Discovery — Documents — HMO and PPO contracts between medical provider and other insurers are confidential, trade secrets, and proprietary documents that are not discoverable and cannot reasonably lead to discoverable evidence — Medicare fee schedule rates are not relevant to determine whether provider’s charges are reasonable

RIVERO DIAGNOSTIC CENTER, INC. a/a/o DISNEY R. COMPANIONI, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 13-12029 SP 25. April 21, 2014. Don S. Cohn, Judge. Counsel: Rita Baez, Rita M. Baez, P.A., Coral Gables; and Marlene S. Reiss, Marlene S. Reiss, P.A., Miami, for Plaintiff. Jessica Zlotnick-Martin, Roig, Tutan, et al., Deerfield Beach; and Joshua Blasberg, for Respondent.

ORDER ON PLAINTIFF’S MOTION FOR PROTECTIVE ORDER REGARDING DUCES TECUM ITEMS

THIS CAUSE came before the Court on April 14, 2014, on Plaintiffs Motion for Protective Order regarding certain items included in Defendant’s Notices of Taking Depositions Duces Tecum. The Court, having reviewed all pertinent documents, and having heard argument of counsel, grants the Plaintiffs Motion as Item Nos. 5 and 13. Accordingly, it is hereby

ORDERED AND ADJUDGED:

that the Plaintiffs Motion for Protective Order as to Item Nos. 5 and 13 is GRANTED.

Plaintiff RIVERO DIAGNOSTIC CENTER, is the assignee of State Farm’s insured, Disney Companioni. In connection with the lawsuit filed by Rivero to collect PIP benefits for payment of medical bills, State Farm noticed Rivero’s “Corporate Representative” and “Person With the Most Knowledge of Billing and Pricing” for depositions duces tecum on August 5, 2014, and September 4,2014.

Item No. 5 of the duces tecum notice requests that the deponent bring to the deposition:

5. Information as to methods of payment and reimbursement amounts accepted by Plaintiff (e.e., private health insurance, workers compensation, Medicare, cash, etc.)

Item No. 13 of the duces tecum notice requests that the deponent bring to the deposition:

13. A copy of any and all contracts (including addendums) between you and/or your office and any entity providing health insurance benefits to the above patient (including but not limited to any health insurance company, health maintenance organization, medicare, etc.) together with any fee or contract rate schedules applicable at the time of the services being rendered to the above patient.

With regard to Item Nos. 5 and 13, Rivero seeks a protective order on the grounds that such requested documents are confidential, trade secret, proprietary, and not relevant in the context of a claim for PIP benefits.

State Farm takes the position that it is entitled to this information to garner evidence of “payments accepted” by Rivero whether under the factors set forth in Fla.Stats. §627.736(5)(a)l.

§627.736(5)(a)2.f.Negotiated Rate Contracts to Which State Farm is a Non-Party

The Court finds that HMO and PPO contracts are confidential, trade secret, proprietary documents that are not discoverable and, further, cannot reasonably lead to discoverable information and, thus, are not relevant.

The language of Fla. Stats. §627.736(5)(a)l., which governs medical provider charges, provides in pertinent part:

(a) 1. . . . With respect to a determination of whether a charge for a particular service, treatment, or otherwise is reasonable, consideration may be given to evidence of usual and customary charges and payments accepted by the provider involved in the dispute, and reimbursement levels in the community and various federal and state medical fee schedules applicable to automobile and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment or supply.

Fla.Stats. §627.736(5)(a)l. (emphasis added).

The Court notes that §627.736(5)(a)l. makes no mention of negotiated contract rates between the medical provider “in this dispute” and other insurers.¹

Allstate Ins. Co. v. Holy Cross Hosp., Inc., 961 So.2d 328 (Fla. 2007) [32 Fla. L. Weekly S453a] supports Rivera’s position. There, the Florida Supreme Court discussed the benefits of negotiated rate contracts. In exchange for paying a reduced negotiated rate for medical services, an insurer will allow for an increase in medical benefits to be paid, from 80% to 100%, and for reduction or waiver of the standard PIP deductibles in certain circumstances. See Fla.Stats. §627.736(9).² In exchange for accepting a reduced negotiated rate, a medical provider enjoys a pool of patients that it otherwise might never reach.

In Holy Cross, Allstate paid 80% of a reduced PPO rate to Holy Cross Hospital for care provided to two of Allstate’s insureds. That payment was predicated on separate contracts that Holy Cross and Allstate each had with a provider network, Beech Street Corporation. Holy Cross argued that, because neither of its patients had PPO policies with Allstate, and because Allstate had not contracted directly with any provider, Allstate could not take advantage of the PPO reduced rates, and instead was required to pay 80% of “reasonable” charges. The Supreme Court acknowledged “the existence of enforceable contracts by which Holy Cross agreed to accept PPO rates from Allstate for any of its insureds that received treatment covered by their PIP policies.” 961 So.2d at 332, n.2.

The issue before the Court in Holy Cross was whether Allstate could pay the reduced rate based upon the PPO contracts notwithstanding that it had not complied the PIP Statute’s PPO provision (the statute requires a PIP insurer to offer a nonpreferred provider policy if it offers a preferred provider policy to an insured). Because Allstate had contracted with Beech Street, a provider network, with which Holy Cross had also contracted, the Court determined that Allstate could pay the reduced PPO rate even though it had not issued PPO policies to its insureds. The contractual relationship amongst the parties in Holy Cross is key to the Supreme Court’s decision to allow Allstate to pay the reduced PPO rate.

This case is different. Here, State Farm has not entered into a PPO or HMO contract with Rivero, nor is any third party provider network involved with which any of the parties may have contracted. This is simply a case in which State Farm seeks to avail itself of the reduced negotiated rates under contracts between Rivero and other insurers to which State Farm is not a party. Nothing prevented State Farm from directly entering into a PPO or HMO contract with Rivero if it desired to avail itself of reduced negotiated rates.

Because negotiated rates and the “reasonable” amount that State Farm’s policy obligates it to pay are apples and oranges, this Court determines that any such negotiated rate contracts that Rivero may have with other insurers are not relevant to a determination of what price State Farm must pay for Rivera’s services in this case.

Equally important is the Court’s finding that negotiated rate contracts are trade secret and proprietary and generally include specific confidentiality provisions. See Holmes Regional Med. Center v. ACHA, 731 So.2d 51 (Fla. 1st DCA 1999) [24 Fla. L. Weekly D810a](waiver of trade secret managed care arrangements where expert witness voluntarily disclosed such information); Fla. Stats. §90.506. Indeed, black letter law protects the confidential contents of a contract from disclosure to a non-party to the contract. Courts cannot force a litigant to breach a contract with a non-party to the litigation.

The Court takes judicial notice of the Motions for Protective Order filed by CIGNA and Blue Cross/Blue Shield in the case styled Pan Am Diag. Svcs., Inc. d/b/a Wide Open MRI (a/a/o Todd Martin) v. State Farm Mut. Auto. Ins. Co., Case No. 13-01283 CONO 73, which were granted on the basis that negotiated rate contracts between those insurers and their medical provider networks were protected by the trade secret privilege. To the extent that insurers in the marketplace are competitors or potential competitors, one insurer cannot be forced to disclose its negotiated contracts with medical providers to another insurer.Medicare Fee Schedules are Not Relevant in PIP

With regard to Medicare Fee Schedules, the Court finds that, based on the recent 11th Circuit Court appellate opinion issued in Hialeah Med. Assoc, Inc. (a/a/o Ana Lezcano) v. United Auto. Ins. Co., Case No. 12-229 AP (Fla. 11th Jud. Cir. March 7, 2014), rhng. den., the Medicare fee schedule rates are not relevant in PIP where the reasonableness of a medical provider’s charges are at issue. See Atkins v. Allstate Ins. Co., 382 So.2d 1276 (Fla. 1980)(“Medicare is a social welfare program and not an insurance or reimbursement plan within the everyday and ordinary meaning of these terms.”); American RiskAssur. Co. v. Benrube, 407 So.2d 993 (Fla. 3d DCA 1981)(“The waiver authority is consistent with prior judicial determinations that Medicare is a social welfare program and not an insurance or reimbursement plan within the ordinary meaning of these terms.”)

Although discovery is generally broader than what evidence may be admissible at trial, matters may only be discoverable if they are “relevant to the subject matter of the pending action.” Fla.R.Civ.P. 1.280(b)(1).

The Court finds that Medicare fee schedule rates are not relevant in PIP to determine whether a medical provider’s charges are reasonable.³

Accordingly, the Court GRANTS Plaintiffs Motion for Protective Order as to Item Nos. 5 and 13 in the duces tecum notices.

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¹The Court notes that, in 1992, the PIP Statute was amended to allow insurers to enter into PPO contracts with medical providers, currently numbered as §627.736(9).

²In Holy Cross, the Supreme Court discussed PPO policies:

PPO policies are in essence a managed care option to insurance, in which insurers “strongly encourage [ ] [policyholders] to choose a ‘preferred’ provider. . . [through] economic incentives such as no copayments, lower deductibles, and higher coverage.”

Holy Cross, supra at 335 n.5, quoting Provider-Based Preferred Provider Organization: A Viable Alternative Under Present Federal Antitrust Policies?, 66 N.C. L.Rev. 253, 255 (1988).

³For PIP litigation involving policies purchased on or after January 1, 2008, an insurer may utilize the reimbursement limitations, which include 200% of the Medicare Part B Fee Schedules, set forth in Fla. Stats. §627.736(5)(a)2.f. provided the insurer has clearly and unambiguously elected that method of reimbursement in its policy. See GEICO Indem. Co. v. Virtual Imaging Svcs., Inc., 38 Fla. L. Weekly S517a)(Fla. July 3, 2013); DCI MRI, Inc. v. GEICO Indem. Co., 79 So.3d 840 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D170e]; GEICO Indem. Co. v. Virtual Imaging Svcs., Inc., 79 So.3d 55 (Fla. 3d DCA 2011)[36 Fla. L. Weekly D2597a]; Kingsway Amigo Ins. Co. v. Ocean Health, Inc. (a/a/o Belizaire Gomez), 63 So.3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]. To the extent that §627.736(5)(a)2.f. was not State Farm’s elected method of reimbursement in this case, that provision is not at issue.

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