21 Fla. L. Weekly Supp. 428b
Online Reference: FLWSUPP 2105RODRInsurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — In absence of any evidence of bad faith, where benefits were exhausted through payment of other medical providers before plaintiff -provider filed suit, insurer is entitled to summary judgment — Insurer was not required to reserve funds for claim which had been reduced through erroneous application of permissive statutory fee schedule and is not liable for balance of reduced claim after exhaustion of benefits where insurer relied upon then-existing law in reducing claim
VIRTUAL IMAGING SERVICES, a/a/o Miguel Rodriguez, Plaintiff, vs. UNITED AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 11-26028 SP 23 04. January 31, 2014. Jason Emilios Dimitris, Judge.
ORDER GRANTING DEFENDANT’S MOTION FOR FINAL SUMMARY JUDGMENT
THIS CAUSE came to be heard upon Defendant’s Motion for Final Summary Judgment Re: Exhaustion of Benefits and Request for 57.105 Sanctions on November 8, 2013 and after reviewing the record, evidence presented, all memoranda, relevant case law, statutes, and being otherwise fully advised in the premises, it is hereby:
ORDERED AND ADJUDGED as follows:
I. FACTUAL FINDINGS
1. This is a Personal Injury Protection (PIP) case arising out of an accident that occurred on September 19, 2009 involving United’s insured, Miguel Rodriguez (“Insured”).
2. Plaintiff VIRTUAL IMAGING SERVICES, INC. (“Virtual”), submitted a medical bill for two MRIs totaling $3600.00, to Defendant UNITED AUTOMOBILE INSURANCE COMPANY, based on a policy of insurance that Insured, Miguel Rodriguez, had with Defendant.
3. Pursuant to the policy of insurance, Defendant paid the Insured’s medical bills in the order in which they were received, including Plaintiff’s medical bill at a reduced rate pursuant to the terms of the policy, which states it may reduce or deny payment for any medical expenses deemed unreasonable. See Exhibit B to Defendant’s Motion for Summary Judgment. United’s policy of insurance did not provide notice to the insured of its election to pay pursuant to F.S. §627.736(5)(a)(2).
4. Plaintiff, as assignee of United’s Insured, filed the instant case on December 12, 2011.
5. The record reveals there was no allegation of bad faith in the complaint, nor a reply to Defendant’s affirmative defenses.
6. Moreover, there is no allegation of proof of bad faith by the insurer or that benefits were not paid for covered losses of the insured pursuant to the policy of insurance. All bills Defendant deemed payable were paid in the order they were received.
7. There were two providers that submitted medical bills on behalf of the Insured: Doctor’s Rehab for dates of service 9/21/09-1/26/10 in the amount of $13,935.00 and Virtual for date of service 10/19/09 in the amount of $3,600.00.
8. Virtual was paid $1,959.46 on 2/17/10 and Doctor’s Rehab was paid $8,040.55 on 2/17/10 and 5/16/11 (in two separate payments) for the medical bills submitted on behalf of the Insured.
9. The explanation of benefits and/or review sen to the providers with the payments referenced the Medicare Part B Fee Schedule and/or State Fee Schedule Guidelines as a basis for the reduction of the bills, which is acknowledged to be 200% of Medicare Part B Fee Schedule.
10. The Insured’s $10,000.00 policy was exhausted on May 16, 2011, approximately seven months before this suit was filed.
II. CONCLUSIONS OF LAW
The question presented to the Court is whether an assignee/medical provider can maintain a cause of action for breach of an insurance contract where the policy limit has been exhausted where there is no allegation or proof of bad faith and the insurer allegedly made payments at 80% of 200% of the Medicare Part B Fee Schedule and the policy does not expressly adopt the permissive limitations on reimbursements pursuant to F.S. §627.736(5)(a)(2). This Court answers this in the negative.
A party moving for summary judgment must establish that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Holl v. Talcott, 191 So.2d 40 (Fla. 1966); Calarese v. Weissfisch, 87 So.3d 1225 (Fla. 3rd DCA 2012) [37 Fla. L. Weekly D1238c]. As set forth above, the record conclusively establishes that there are no genuine issues of material fact regarding Defendant’s payment of $10,000.00 in policy limits towards Mr. Rodriguez’s PIP benefits. The question then becomes whether Defendant is entitled to judgment as a matter of law on its exhaustion affirmative defense.
In the instant case, Plaintiff seeks benefits beyond the contractual amount set forth by the policy. United’s actions of continuing to pay the bills as submitted, and not setting aside monies to satisfy potential disputes, satisfies the purpose and design of the PIP statue, and allowed the insured to continue receiving medical treatment for his injuries. There is no requirement that an insurance company set aside a reserve fund for claims that are reduced or denied. See Dr. Robert D. Simon v. Progressive Express Ins. Co., 904 So.2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]; see also, Millennium Diagnostic Imaging Center, Inc. v. Progressive Express Ins. Co., 3D07-2628 (Fla. 3rd DCA 2008) [33 Fla. L. Weekly D1742b](Court adopted the holding in Simon that an insurance carrier has no obligation to reserve PIP benefits). In the absence of bad faith, a PIP insurer is not liable for benefits once benefits have been exhausted. The right to contest the denial of a PIP claim, absent a showing of bad faith, can be extinguished through an exhaustion of benefits by the insured after the claim has been submitted. See Progressive American Ins. Co., 990 So.2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]. Further, in Sheldon, D.C. v. United Services Automobile Association, 55 So.3d 593 (Fla. 1st DCA 2011) [36 Fla. L. Weekly D23a], the Court explained that “the reason an insurer that has paid out policy limits may not be held liable on a claim for disputed benefits is that it has already fulfilled its contractual obligation to pay a given amount of benefits, and it cannot be required to pay more than it agreed to pay under the policy.” Id. at 595-596 (emphasis added).
Plaintiff does not contend Defendant acted in bad faith but that Defendant made a “mistake” in how the medical bills were reduced in that Defendant used the Medicare Fee Schedule to determine a reasonable amount to reimburse the two providers in this case. Plaintiff relies on the recent 11th Circuit Court’s Appellate Opinion of Geico Indemnity Co. v. Gables Ins. Recovery, Inc. a/a/o Rita M. Lauzan, 20 Fla. L. Weekly Supp. 862a (June 25, 2013) in opposition to Defendant’s Motion. In that decision, the 11th Circuit Court determined that an insurer’s payment was “wrongful” because it paid pursuant to the Medicare Fee Schedule without specifically electing to do so in its policy. After determining that the insurer made a “wrongful” payment, the Court found that the benefits were “wrongly exhausted” and, therefore, the insurer was liable for benefits that exceeded the policy limits. However, the Geico v. Gables a/a/o Rita Lauzan opinion did not cite any binding District Court of Appeal case law on the issue of exhaustion of benefits, such as Simon, Stand-up MRI or Sheldon.
Merely eight days after the 11th Circuit’s opinion in Geico v. Gables a/a/o Rita Lauzan the Florida Supreme Court decided Geico General Ins. Co. v. Virtual Imaging Services, Inc., 2013 WL 3332385 (Fla. 2013) [38 Fla. L. Weekly S517a]. In its opinion, the Florida Supreme Court stated in a footnote that “although we agree that there are two payment methodologies for satisfying the PIP statute’s coverage mandate, we emphasize that we do not conclude that limiting reimbursement pursuant to section 627.736(5)(a)(2) would never satisfy this reasonable medical expenses coverage mandate.” Geico General Ins. Co. v. Virtual Imaging Services, Inc., 2013 WL 3332385, ftn. 8 (emphasis not in original). This language is also consistent with the Florida Standard Jury Instruction on the issue of reasonableness of charges which states that in deciding whether the amount of a charge is reasonable, the jury may consider reimbursement levels in various federal and state medical fee schedules applicable to automobile coverages among other factors as laid out in the instruction. In re: Std. Jury Instructions in Civ. Cases (No. 06-02), 966 So.2d 940 (Fla. 2007) [32 Fla. L. Weekly S563a]. Therefore, any statement that an insurer’s use of the Medicare fee schedule as a basis to limit a provider’s reimbursement was “wrongful” directly contradicts the Florida Supreme Court approved standard jury instruction and language in Geico General Ins. Co. v. Virtual Imaging Services, Inc., 2013 WL 3332385 (Fla. 2013) [38 Fla. L. Weekly S517a] which specifically stated such a payment could satisfy this coverage mandate despite the failure of the insurer to notify the policy holder of the fee schedule election. See also, Universal X-Ray Corp a/a/o Mark Porter [v. Progressive Express Ins. Co.], Case No. 12-23294 SP 23 (5), Miami-Dade County Court, Judge Charles Johnson (October 3, 2013) [21 Fla. L. Weekly Supp. 84a] (an insurer may use the Medicare fee schedule as a basis to limit a provider’s reimbursement); New Medical Group, Inc., a/a/o Gledys Herrera, Case No. 11-01870 SP 26 (04), Miami-Dade County Court, Judge Lawrence King (October 8, 2013) [21 Fla. L. Weekly Supp. 182a] (UAIC was not required to expressly elect a particular payment methodology when disputing reasonableness of charge); and Pan Am Diagnostic Services, Inc. DBA Wide Open MRI, Inc., a/a/o: David K. Welch, Case No. 12-2768 SP 26 (03), Miami-Dade County Court, Judge Michaelle Gonzalez-Paulson (October 31, 2013) [21 Fla. L. Weekly Supp. 274a] (Plaintiff’s interest extinguished where payments made on behalf of insured exhausted PIP benefits pre-suit and there was no evidence of bad faith).
In the instant case, at the time United received and processed the bills, United had reasonable proof to reimburse Plaintiff’s charges based upon its reliance on the plain language of F.S. §627.736(5)(a)(1)(f) and the fact that there was no binding authority prohibiting it from taking such a position. Bad faith does not exist when an insurer takes a legal position, relying upon the status of the law at that time, when there is no binding authority stating otherwise. See DPI of North Broward, LLC a/a/o John Shutowick v. USAA, Case No. 10-05075 COCE 53, Broward County Court, Judge Robert Lee (February 1, 2011) [18 Fla. L. Weekly Supp. 492a]; see also, Pembroke Pines MRI, Inc. a/a/o Jack Paris v. USAA Casualty, CASE NO. 09-09458 COCE 51, Broward Court, Judge Martin Dishowitz (April 11, 2011) [18 Fla. L. Weekly Supp. 613a]; Pembroke Pines MRI, Inc. a/a/o Coleen Carcelli v. United Service Automobile Ass’n, 10-08138 COCE 54, Broward County Court, Judge Lisa Trachman (April 8, 2011).
This Court also recognizes that to follow Plaintiff’s argument and require an insurer to maintain a reserve fund for possible or disputed claims would undoubtedly disrupt the flow of prompt payments to medical providers who provided reasonable, related and medically necessary services to the insureds and unfortunately require the Court system to become the claim adjustment mechanism for the insurance carriers. This is the antithesis of why the No-fault scheme was enacted. See Ivey v. Allstate Ins. Co., 774 So.2d 679, 683-84 (Fla. 2000) [25 Fla. L. Weekly S1103a] (“Without a doubt, the purpose of the no-fault statutory scheme is to ‘provide swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption.’ ”) (internal citations omitted).
Thus, taking into account the holdings on the issue of benefits exhausted from the Third, Fourth, Fifth District Courts of Appeal, and the Florida Supreme Court, Plaintiff’s interest is extinguished as the payments made on behalf of Miguel Rodriguez exhausted all PIP benefits and there is no allegation or evidence of bad faith.
Wherefore, for the foregoing reasons, the Court hereby orders and adjudges that:
1. Defendant’s Motion for Final Summary Judgment is HEREBY GRANTED.
2. Defendant’s request for 57.105 sanctions was not addressed at the hearing due to time constraints and may be addressed at a later date.
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