21 Fla. L. Weekly Supp. 688a

Online Reference: FLWSUPP 2107BAIRInsurance — Personal injury protection — Discovery — Motion for reconsideration of order requiring medical provider to disclose reimbursement amounts it received from other insurance carriers and uninsured patients for CPT codes at issue is denied — Provider has not demonstrated that reimbursement amounts constitute trade secrets, insurer has demonstrated that disclosure of reimbursement amounts is reasonably necessary to defend against provider’s claim that its bills are reasonable, and order requiring disclosure contains sufficient safeguards to protect against disclosure of confidential information or trade secrets

VIRTUAL IMAGING SERVICES, INC. a/a/o ROSA BAIRES, 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. 12-17383 SP 23 (05). April 10, 2014. Charles Johnson, Judge. Counsel: Joseph Littman and Thomas Flanagan, for Plaintiff. Karen E. Trefzger and Thomas L. Hunker, for Defendant.

ORDER DENYING PLAINTIFF’S MOTIONFOR RECONSIDERATION

THIS CAUSE came to be heard on March 17, 2014 upon Plaintiff’s motion for reconsideration of this Court’s April 23, 2013 amended order on Plaintiff’s objection to defendant’s Interrogatory #5 concerning discovery of reimbursement amounts. After reviewing the Plaintiff’s motion and Defendant’s response and hearing argument from the parties, this Court denies Plaintiff’s motion because: (1) Plaintiff has not met its burden of demonstrating that reimbursement amounts constitute “trade secrets” under Florida law; (2) Defendant has demonstrated that reimbursements are reasonably necessary to defend against Plaintiff’s claim that its bills are reasonable; and (3) the Court’s April 23, 2013 amended order contains sufficient safeguards to protect against disclosure of confidential information or trade secrets.

FACTS

Defendant propounded interrogatories upon Plaintiff requesting Plaintiff to provide reimbursement amounts it received in 2008, 2009, and 2010 from other insurance carriers and uninsured patients for the CPT codes at issue in this lawsuit. Plaintiff objected on the grounds that the request was overbroad, burdensome, vague, and not reasonably calculated to the discovery of admissible evidence. Plaintiff also objected to this request, claiming that HMO and PPO reimbursement amounts are privileged confidential trade secrets. On April 23, 2013 (and later revised on September 11, 2013) this Court partially overruled Plaintiff’s objections by requiring Plaintiff to provide reimbursement amounts only for the year 2011 (the same year that the services were allegedly rendered in this case). However, to avoid the disclosure of any trade secret or proprietary information, the Court permitted Plaintiff to “simply identify said insurance provider by number and type of carrier, i.e., HMO#1 [reimbursement amount]; HMO#2 __; PPO#1 __; PPO#2 __, etc.” Subsequently, on November 11, 2013, Plaintiff filed its motion for reconsideration challenging this Court’s April 23, 2013 amended order.

ANALYSIS

In its motion, Plaintiff claims: (1) that the Court violated its trade secret privilege; (2) that the Court’s ruling would affect the rights of the anonymous HMO and PPO carriers; (3) that this Court could not require disclosure of the reimbursement amounts without first conducting an in camera inspection of the HMO and PPO contracts; and (4) that HMO and PPO reimbursement amounts are not relevant to the reasonableness of Plaintiff’s charges. This Court denies Plaintiff’s motion because: (1) Plaintiff has not met its burden of demonstrating that reimbursement amounts constitute “trade secrets” under Florida law; (2) Defendant has demonstrated that reimbursements are reasonably necessary to defend against Plaintiff’s claim that its bills are reasonable; and (3) the Court’s June 12, 2013 order contains sufficient safeguards to protect against disclosure of confidential information or trade secrets. Each of these points will be addressed in turn.

I.

Reimbursement amounts are not trade secrets

“[T]here is no initial burden upon the party seeking discovery to demonstrate the need therefore . . .” Goodyear Tire & Rubber Co. v. Cooey, 359 So. 2d 1200, 1202 (Fla. 1st DCA 1978). “[A] resisting party or party seeking a protective order has the burden of showing ‘good cause.’ ” Id. (citing Fla. R Civ. P. 1.280(c)(7)). Thus, the first step in the analysis requires Plaintiff to demonstrate good cause why the reimbursement information should be exempt from discovery. In this case, Plaintiff claims that the reimbursement amounts are not discoverable because they are privileged trade secrets under section 90.506, Florida Statutes. That provision states that:

A person has a privilege to refuse to disclose, and to prevent other persons from disclosing, a trade secret owned by that person if the allowance of the privilege will not conceal fraud or otherwise work injustice. When the court directs disclosure, it shall take the protective measures that the interests of the holder of the privilege, the interests of the parties, and the furtherance of justice require. The privilege may be claimed by the person or the person’s agent or employee.

§ 90.506, Fla. Stat. “The purpose underlying the trade secrets privilege established by section 90.506 is to prohibit a party to a suit from obtaining valuable information that could be used to its own advantage, relying upon the duty of a witness to answer questions truthfully.” Freedom Newspapers, Inc. v. Egly, 507 So. 2d 1180, 1184 (Fla. 2d DCA 1987); Fortune Personnel Agency of Ft. Lauderdale, Inc. v. Sun Tech, Inc., of South Florida, 423 So. 2d 545, 546 n.6 (Fla. 4th DCA 1982).

Contrary to Plaintiff’s assertion, reimbursement amounts do not fit within any of the definitions of trade secrets under Florida law. First, “trade secrets” are defined in the Uniform Trade Secrets Act as:

[I]nformation, including a formula, pattern, compilation, program, device, method, technique, or process that:

(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

§ 688.002(4), Fla. Stat. Similarly, section 812.081, Florida Statutes defines “trade secret” as “the whole or any portion or phase of any formula, pattern, device, combination of devices, or compilation of information which is for use, or is used, in the operation of a business and which provides the business an advantage, or an opportunity to obtain an advantage, over those who do not know or use it.” § 812.081, Fla. Stat.

In this case, Plaintiff’s has not met its burden because this Court did not compel disclosure of the methodology, factors, or data considered by the HMO and PPO insurers in calculating their reimbursement amount. The June 12, 2013 order only requires disclosure of the amounts paid by the insurers. The Second District made this distinction in Summitbridge National Investments v. 1221 Palm Harbor, L.L.C., 67 So. 3d 448 (Fla. 2d DCA 2011) [36 Fla. L. Weekly D1888b], finding that a “formula resulting in a price” may be a trade secret but “the price for a single transaction” does not fall within the definition of a trade secret. Id. at 450. Thus, according to Summitbridge, mere evidence of charges and reimbursements are not trade secrets.

II.

Defendant has demonstrated that the reimbursement information is reasonably necessary to defend against Plaintiff’s claim that its bills are reasonable

Moreover, even if reimbursement amounts could be characterized as trade secrets, Defendant has overcome any privilege objection by demonstrating that such evidence is reasonably necessary to defend against Plaintiff’s claim that its bills are reasonable. “It is widely recognized that the trade-secret privilege is not absolute.” Fortune Personnel Agency of Ft. Lauderdale, Inc. v. Sun Tech., Inc. of South Florida, 423 So. 2d 545, 547 n.2 (Fla. 4th DCA 1982); Freedom Newspapers, Inc. v. Egly, 507 So. 2d 1180, 1184 (Fla. 2d DCA 1987) (“[T]he privilege provided by section 90.506 is not absolute.”). “Even trade secret information may be released upon a showing of sufficient need for the information.” Freedom Newspapers, 507 So. 2d at 1184. “In each case the judge must weigh the importance of protecting the claimant’s secret against the interests in facilitating the trial and promoting a just end to the litigation.” Fortune Personnel Agency, 423 So. 2d at 547 n.2.

In this case, Defendant’s request is relevant to dispute the reasonableness of Plaintiff’s bill by showing that the Plaintiff has demanded a higher reimbursement from Defendant than Plaintiff accepts from other payers for the same goods and services. The PIP statute lists four factors which may be considered in determining the “reasonable charge.” See Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 38 Fla. L. Weekly S517a, 2013 WL 3332385 at *7-8 (Fla. 2013); New Medical Group, Inc. a/a/o Gledys Herrera v. United Auto. Ins. Co., 21 Fla. L. Weekly Supp. 182a (Fla. Cty. Ct. 2013). Specifically, section 627.736(5)(a), Florida Statutes, states:

. . . In determining whether a charge for a particular service, treatment, or otherwise is reasonable, consideration may be given to [1] evidence of usual and customary charges and payments accepted by the provider involved in the dispute, [2] reimbursement levels in the community and [3] various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages, and [4] other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.

§ 627.736(5)(a), Fla. Stat. Subsection (5)(a) also states that “such a charge may not exceed the amount the person or institution customarily charges for like services or supplies.” Id. Thus, it is clear that the PIP statute measures the “reasonableness” of a charge based entirely upon evidence of: (1) reimbursements; and (2) amounts charged and accepted by the provider involved in the dispute. This is precisely what Defendant’s interrogatory asks Plaintiff to disclose.

In Allstate Insurance Company v. Holy Cross Hospital, Inc., 961 So. 2d 328 (Fla. 2007) [32 Fla. L. Weekly S453a], Allstate reimbursed Holy Cross’ bills at a reduced rate predicated upon separate contracts that Holy Cross and Allstate each allegedly entered into with a provider network known as Beech Street. Holy Cross sued for the difference, claiming that because the insureds did not have a preferred provider (PPO) policy with Allstate and because Allstate had not contracted directly with any health care provider, Allstate could not reimburse at the reduced rates and should pay Holy Cross’ entire bill (minus the 20% copayment). Id. at 330-31. The Supreme Court interpreted the PIP statute and rejected Holy Cross’ argument. The Court held that the provisions of the PIP statute do not prohibit an insurer from “paying a health care provider based upon a reduced rate that the provider contractually agreed to accept.” Id. at 334. The Court further explained that “[w]hat a provider customarily charges or has previously accepted are important factors for determining whether a fee is reasonable.” Id. at 335 (citing § 627.736(5)(a), Fla. Stat.). “This is especially true where the provider has agreed to accept a certain fee as reasonable payment for the services rendered.” Id. (emphasis added) (citing Nationwide Mut. Ins. Co. v. Jewell, 862 So. 2d 79, 86 (Fla. 2d DCA 2003) [28 Fla. L. Weekly D2605a]. Pursuant to Holy Cross, information regarding reimbursements accepted by Plaintiff, especially those which were based upon HMO and PPO contracts, is highly relevant to the issue of the reasonableness of Plaintiff’s charges. Thus, pursuant to Holy Cross, Defendant is entitled to discovery of reimbursements accepted by Plaintiff, “especially” if they are based upon an HMO or PPO contract. Id.; see also Pembroke Pines MRI a/a/o Elixardo Ramirez v. United Auto. Ins. Co., 20 Fla. L. Weekly Supp. 629a (Fla. Broward Cty. Ct. 2013) (citing Holy Cross) (finding that HMO and PPO agreements are relevant to a reasonableness analysis under section 627.736(5)(a) and ordering PIP plaintiff to produce HMO and PPO contracts for an in camera inspection).

The PIP statute is not unique in defining “reasonable charge” based on reimbursements and amounts accepted. As the First District in Baker County Med. Svcs. v. Aetna Health Management, LLC, 31 So. 3d 842, 845 (Fla. 1st DCA 2010) [35 Fla. L. Weekly D438b] held, the term “charge” is not defined as the amount appearing on the face of medical bill. Rather, “charge” means “the fair market value of the services provided.” Id. And “fair market value” is “the price that a willing buyer will pay and a willing seller will accept in an arms-length transaction.” Id. Accordingly, the court held that evidence of other payments is relevant and admissible to challenge the reasonableness of the hospital’s bill.¹

Other courts have held similarly. See Columbia Hosp. (Palm Beaches) Ltd. P’ship v. Hasson, 33 So. 3d 148, 150 & n.3 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D1067a] (“Defendants sufficiently explained below why they needed the information: in order to dispute, as unreasonable, the amount of medical expenses that the plaintiff will seek to recover from them, if the hospital charges non-litigation patients a lower fee for the same medical services.”) (“[A]ctual charges are not instructive on what is reasonable . . . a realistic amount is what hospitals are willing to accept.”); Katzman v. Rediron Fabrication, Inc., 76 So. 3d 1060, 1065 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D2790a] (“[S]uch discovery is permitted as it is calculated to lead to the discovery of admissible evidence regarding the reasonableness of medical expenses, that is, whether the health care provider ‘charges non-litigation patients a lower fee for the same medical services.’ ”); Giacalone v. Helen Ellis Mem’l Hosp. Found., 8 So. 3d 1232, 1235-36 (Fla. 2d DCA 2009) [34 Fla. L. Weekly D881b] (holding that a hospital’s charges and discounts granted to the various categories of patients it serves, e.g., self-pay patients, Medicare patients, Medicaid patients, charity care patients, and privately insured patients, were both “relevant” and “critical” to dispute the reasonableness of the hospital’s prices).

III.

This Court’s order implemented sufficient safeguards

Lastly, this Court implemented sufficient safeguards by restricting the disclosure of all but the dollar amounts of the reimbursements received by Plaintiff in the year 2011. Thus, it is impossible to even identify the carriers reimbursing the particular amounts much less use it against them for economic advantage. Accordingly, this Court’s order is sufficiently balanced because it is “limited to items necessary for a court to determine contested issues.” McDonald’s Rests. of Fla., Inc. v. Doe, 87 So. 3d 791, 793 (Fla. 2d DCA 2012) [37 Fla. L. Weekly D592a].

CONCLUSION

For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that the Plaintiff’s motion for reconsideration is DENIED. Plaintiff shall have thirty days (30) from the date of this order, in which to comply with this Court’s April 23, 2013 amended order. If Plaintiff fails to comply with this order, it shall pay to Defendant $100 per day for every day beyond the 30th day following the rendition of this order.

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¹The Baker court indicated that there is “one exception” to this rule: in evaluating the reasonableness of a hospital charge for emergency medical services, consideration may not be given to evidence of Medicare and Medicaid reimbursement rates because hospitals are required by both state and federal law to accept Medicare and Medicaid patients at the government mandated rates. Baker, 31 So. 3d at 846; 42 U.S.C. § 1395dd; § 395.1041, Fla. Stat. Therefore, Medicare and Medicaid reimbursements to hospitals are not necessarily reflective of the “fair market value” because they are not “arm’s-length” transactions. Thus, this exception does not apply in cases involving a non-hospital provider that is not required to accept Medicare patients. See id. (indicating that unlike hospitals, “private providers have [the option] to refuse to provide services to Medicare or Medicaid patients”). Also, Medicare evidence is admissible in a PIP case to determine the reasonable charge pursuant to the section 627.736(5)(a)(1) factors. See Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 2013 WL 3332385 at *7-8 (Fla. 2013) [38 Fla. L. Weekly S517a]; New Medical Group, Inc. a/a/o Gledys Herrera v. United Automobile Insurance Company, 21 Fla. L. Weekly Supp. 182a (Fla. Cty. Ct. 2013).

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