21 Fla. L. Weekly Supp. 698a
Online Reference: FLWSUPP 2107MACCInsurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — In absence of any evidence of bad faith, insurer is entitled to summary judgment where benefits were exhausted by payments to other medical providers before provider filed suit in this case — Insurer was not required to reserve funds for claim which was reduced through erroneous application of fee schedule in 2008 PIP statute and is not liable for payment of balance of reduced claim after exhaustion of benefits
WELLNESS ASSOCIATES OF FLORIDA, INC. (Meridional Maccenat), Plaintiff, vs. MGA INSURANCE COMPANY, INC., Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County. Case No. 50-2011SC005326XXXXSBRD. March 6, 2014. Reginald R. Corlew, Judge. Counsel: Charles J. Kane, Boca Raton, for Plaintiff. Erich von Unruh, Kirwan, Spellacy & Danner, P.A., Jupiter, for Defendant.
ORDER GRANTING DEFENDANTFINAL SUMMARY JUDGMENT
THIS CAUSE having come before the Court on January 23, 2014, pursuant to Defendant’s Motion for Final Summary Judgment, and the Court having reviewed the file, considered the arguments and Memorandums of Law submitted by the parties, and being otherwise fully advised in this matter, does hereby make the following findings of fact and conclusions of law:
FINDINGS OF FACT
1. The Plaintiff, Wellness Associates of Florida, Inc (Meridional Maccenat) (hereinafter referred to as “Wellness” or “Plaintiff”) in this matter is a healthcare provider who allegedly rendered treatment to the MGA Insurance Company insured, Meridional Maccenat for injuries he allegedly sustained in a motor vehicle accident which occurred on or about January 5, 2009.
2. Meridional Maccenat (the “insured”) was covered under a policy of insurance issued by the Defendant, MGA Insurance Company, Inc., (hereinafter referred to as “MGA”) which provided $10,000.00 in Personal Injury (“PIP”) benefits.
3. On December 18, 2008, Meridional Maccenat assigned his benefits to the Plaintiff, Wellness.
4. The Plaintiff timely submitted bills to MGA for the medical services rendered to Meridional Maccenat.
5. MGA received the bill from Wellness first and applied the $1,000 Deductible and then paid the 80% of the bill received at 200% of the 2007 participating level of Medicare Part B Fee Schedule.
6. MGA received bills for the insured in this case from three different providers and the insured’s benefits in this case were exhausted on May 11, 2009.
7. On June 13, 2011 the Plaintiff served its Complaint on MGA for “Damages for No-Fault Benefits”. Plaintiff’s Complaint was served on State Farm after PIP benefits were exhausted.
8. At no time before this hearing on Defendant’s Motion for Summary Judgment has the Plaintiff contended in any of its pleadings that the actions taken by State Farm in this claim were done in bad faith.
CONCLUSION OF LAW
The issue presented to this Court is whether MGA, which issued a PIP policy to an insured, has a legal obligation to pay bills submitted by the Plaintiff after the contractual amount of benefits have been exhausted prior to the Plaintiff filing suit.
The Defendant has moved for Summary Judgment based on the exhaustion of benefits claiming that Defendant has fulfilled its contractual obligations to the insured and cannot be required to pay above the contracted maximum amount of benefits. The Plaintiff has not claimed bad faith against the Defendant in any pleading filed with the Court. However, the Plaintiff has alleged that the Defendant’s Motion for Summary Judgment must fail based on, among other things, that MGA did not pay a reasonable rate.
The Defendant relies primarily on the Fourth District Court of Appeal decision, Simon v. Progressive Express Insurance Company, 904 So.2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]; and the Fifth District Court of Appeal decision, Progressive American Insurance v. Stand Up MRI of Orlando, 990 So.2d 3 (5th DCA 2008) [33 Fla. L. Weekly D1746a]
The Plaintiff has alleged that MGA misapplied the 2007 fee schedule in a policy that made no express reference to it and there were not other basis to reduce the allowed amount. Moreover the fee schedule reductions were erroneous as a matter of law pursuant to Kingsway Amigo Ins. V. Ocean Health, Inc. 63 So.3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a] Additionally, that after wrongly reducing the Plaintiff’s claim submitted in the demand, MGA paid out subsequent claims which exhausted benefits.
The Court finds the arguments of both parties to be compelling. The Defendant submits that it is only obligated to make payments of benefits up to the limit that it contracted with its insured. Once these limits have been exhausted then the Defendant has met its contractual obligations, and barring bad faith, there can be no damages awarded in this lawsuit. When the Plaintiff accepted the Assignment of Benefits from the patient, they did so knowing that there was a finite limit in benefits and that there were possible other providers that would be getting paid from those benefits even after suit was filed.
In addition to the Plaintiff claiming that the State Farm underpaid this claim pursuant to Kingsway, the Plaintiff submits legal theories which include the theory that benefits are not exhausted as subsequent payments made to other providers were gratuitous and that according to the English Rule of Priorities that interest owed Northwood has been marked as benefits, and such, are still available. Moreover, the Plaintiff submits that as MGA made a unilateral mistake in law by applying F.S. 627.736(5)(a)2f to Plaintiff’s claim that it should not be provided with any relief. See Feldman v. Kritch, 824 So.2d 274 (Fla. 4th DCA 2002) [27 Fla. L. Weekly D1904a] The Plaintiff also theorizes that State Farm could have reduced a portion of the damage it caused by these disservices by issuing checks or using interpleader after December 5, 2008 while its fee schedule issue made its way through the courts. See Margiotta v. State Farm Mut. Auto. Ins. Co., 622 So.2d 135 (Fla. 4th DCA 1993).
The Court finds that the following language in Simon, 904 So.2d 449 entitled the Defendant to entry of a final summary judgment despite the fact that MGA had notice prior to exhaustion of benefits:
We decline to create a requirement that an insurance company set aside a ‘reserve’ fund for claims that are reduced or denied. Simon does not content that the denial or reduction of its claim was made in bad faith, or that Progressive had manipulated, or acted improperly in reducing it. If we were to accept Simon’s theory that a ‘reserve’ or ‘hold’ provision be automatically applied to any funds at the time a claim is submitted, it would result in unreasonable exposure of the insurance company and would be to the detriment of the insured and other providers with properly submitted claims. Under such a theory, all potential payments to a service provider that were denied, or were subject to a reduction, would have to be held in reserve until the statute of limitations period expired or a suit was filed and concluded. This would delay and reduce availability of funds for the payment of claims to other providers and would be inconsistent with the PIP statutes prompts pay provisions.
See §627.613, and 627.662(7), Fla. Stat. (provision established to expedite payment to service providers). It is the obligation of insurance companies to attempt to settle as many claims as possible. See Farinas v. Florida Farm Bureau General Ins. Co., 850 So.2d 555 (Fla. 2003) [28 Fla. L. Weekly D1611b]. It is the also the prerogative of insurance companies to pay, reduce, or deny claims. Id.
Moreover, in Stand Up MRI of Orlando, 990 So.2d 3, the Fifth District Court of Appeal followed the Simon court’s reasoning that an insurer cannot hold money in a reserve fund, while going further to comment that a demand letter does not require an insurer to hold funds in reserve it is merely a condition precedent to filing suit. The Court also agreed with the common-sense reasoning of the Circuit Court in Neuro-Imaging Associates. P.A. v. Nationwide Insurance Co., 10 Fla. L. Weekly Supp. 738A (Fla. 15th Jud.Cir.Ct.2002), a case in which benefits were exhausted after suit was filed and served.
Thus the foregoing language indicates that the Court in Simon and subsequently followed by Stand Up MRI of Orlando, contemplated that an insurance company would receive claims from providers after a lawsuit was filed and approved the company’s payment of these later claims to other health care providers. It is therefore
ORDERED AND ADJUDGED that the Defendant’s Motion for Final Summary Judgment is hereby granted. Judgment is entered in favor of the Defendant and the Plaintiff shall take nothing by this action and the Defendant shall go hence without a day. The Court reserves jurisdiction to determine attorneys’ fee and taxable costs.
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