21 Fla. L. Weekly Supp. 362a
Online Reference: FLWSUPP 2104BORDInsurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Where insurer wrongly paid medical bills in accordance with permissive reimbursement limitation of section 627.736(5)(a)2.f despite fact that policy obligated it to pay 80% of reasonable medical expenses, insurer’s exhaustion of benefits will not shield insurer from having to pay in excess of policy limits
Y. H. IMAGING, INC. a/a/o (Bordes, Ricardo), Plaintiff(s), vs. LIBERTY MUTUAL INSURANCE COMPANY, Defendant(s). County Court, 17th Judicial Circuit in and for Broward County. Case No. 12-7706 COSO 60. October 28, 2013. Honorable Ian Richards, Judge. Counsel: Kelly M. Arias and Wajih A. Shirazi, Hollywood, for Plaintiff. Rebecca Kay, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTIONFOR SUMMARY JUDGMENT AS TO THE ISSUEOF EXHAUSTION OF BENEFITS
THIS CAUSE, having come before this Honorable Court, and the Court being otherwise fully advised in the premises, it is hereupon ORDERED AND ADJUDGED: that Plaintiff’s Motion for Summary Judgment as to Reasonableness is hereby GRANTED and Defendant’s Motion for Final Summary Judgment as to Exhaustion of Benefits is hereby DENIED. The facts of this case are as follows:
STATEMENT OF FACTS
1. This is a suit for No-Fault Personal Injury Protection (PIP) benefits pursuant to Florida Statute §627.736 for medical treatment rendered by the Plaintiff, Y.H. Imaging, Inc., to the claimant, Ricardo Bordes, on April 5, 2011 as a result of a motor vehicle accident which occurred on April 1, 2011. At the time of both the accident and treatment, Ricardo Bordes qualified for insurance under a policy issued by the Defendant, Liberty Mutual Insurance Company (“Liberty”).
2. Plaintiff provided medical treatment to the claimant and in exchange accepted an Assignment of Benefits which permitted Plaintiff to litigate the rights of the claimant in order to receive payment for PIP benefits under the subject policy issued by Liberty. Plaintiff timely submitted its bill in the amount of $2,327.00 for treatment rendered to Ricardo Bordes which was received by Liberty when there clearly was more than enough PIP benefits still remaining for Liberty to pay the Plaintiff’s bill at the full 80% in accordance with its policy of insurance.
3. In support of Plaintiff’s Motion for Summary Judgment, Plaintiff filed the Affidavit of its corporate representative, billing clerk and records custodian, Yamir Hernandez. Mr. Hernandez testified as to the medical treatment Plaintiff rendered to the claimant, the reasonableness of the usual and customary bills/charges for medical treatment, that Plaintiff’s bills were timely submitted to Liberty and that full payment was not made by Liberty.
4. In support of Defendant’s Motion for Summary Judgment, Liberty filed the Affidavit of its litigation adjuster, Joan Rose, who simply testified that the applicable insurance policy PIP limit was $10,000 and that PIP benefits were exhausted on the subject policy on or around April 23, 2012 without any testimony as to the reasonableness of Plaintiff’s bills/charges.
5. Liberty’s Explanations of Review for this claim indicates that the Plaintiff’s bill was not paid at the full 80% in accordance with its policy. Instead, Liberty chose to pay Plaintiff’s bill at a reduced amount by calculating the subject bill at 200% of Medicare Fee Schedule Part B despite the fact that Liberty never elected or endorsed its policy of insurance to reflect it would be paying using the permissive reimbursement limitations which the legislature added to the 2008 PIP Statute in §627.736(5)(a)(2)(f).
6. The Florida Supreme Court, the Fourth District and the Third District have all held that an insurer must elect in its policy the permissive reimbursement limitations set forth in Florida Statute §627.736(5)(a)(2)(f) before the insurer can avail itself of those limitations. See Geico General Ins. Co. v. Virtual Imaging Services., Inc., 38 Fla. L. Weekly S517a (Fla. July 3, 2013), 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] and Geico General Ins. Co. v. Virtual Imaging Services., Inc., 79 So.3d 55 (Fla. 3rd DCA 2011) [36 Fla. L. Weekly D2597a].
7. It is undisputed that Liberty’s applicable policy of insurance promised to pay 80% of the insured’s medical bills without any election within its policy to reflect that Liberty would be calculating or paying bills using the permissive reimbursement limitations of Fla. Stat. §627.736(5)(a)(2)(f). Liberty Mutual Insurance Company’s policy of insurance states in most pertinent part:
We will pay, in accordance with the Florida Motor Vehicle No Fault Law, to or for the benefit of the injured person:
1. Medical expenses — eighty (80) percent of reasonable expenses for “medically necessary”
a. Medical, surgical, x-ray, dental, ambulance, hospital, professional, nursing and rehabilitative services; and
b. Prosthetic devices.
8. Liberty’s policy of insurance does not allow for it to use the permissive reimbursement limitations of Fla. Stat. §627.736(5)(a)(2)(f) as Liberty never elected or endorsed its policy in order to include these limitations under Fla. Stat. §627.736(5)(a)(2)(f).
9. It is also undisputed that Defendant has not filed any evidence in the form of affidavit or deposition testimony in opposition to Plaintiff’s Motion for Summary Judgment that would refute the fact that Plaintiff’s bills/charges and therefore, this Court determines that Plaintiff’s prevails on the issue of the Reasonableness of Plaintiff’s bills/charges in this case and Plaintiff’s Motion for Summary Judgment as to this issue is hereby GRANTED.
10. As a separate matter, Liberty has moved for summary judgment alleging that its exhaustion of PIP benefits under the subject policy of insurance relieves Liberty of any and all liability for having to make further payments in the absence of bad faith. Despite the fact that their policy of insurance does not allow for them to pay at 200% of Medicare Fee Schedule Part B, Liberty maintains that it is not liable for any further PIP benefits beyond the $10,000 once benefits have been exhausted in the absence of bad faith.
11. In opposition to Defendant’s Motion for Summary Judgment, Plaintiff makes the argument that Liberty improperly paid the PIP benefits due as its policy of insurance promised to pay “80% of all medically necessary expenses” without any election whatsoever within the policy to reflect that Liberty would be calculating or limiting payment using the reimbursement limitations of Fla. Stat. §627.736(5)(a)(2)(f) at 200% of Medicare Fee Schedule Part B. Plaintiff maintains that Liberty improperly exhausted PIP benefits by making reduced payments at Medicare Fee Schedule without ever electing to do so in its policy under the requirements of §627.736(5)(a) and therefore, Liberty is both responsible and liable for paying the full 80% of Plaintiff’s bills in accordance with its policy of insurance as Florida Law mandates insurance policies can offer only the same or greater coverage than the PIP Statute provides, not less.
MEMORANDUM OF LAW
This Court agrees with the Plaintiff and is not persuaded by Liberty’s argument. Liberty maintains they did nothing in bad faith and that it properly exhausted benefits by paying all bills in the order they were received under the subject policy. However, bad faith is not the only threshold to cross when determining whether an insurance company has improperly paid and/or exhausted benefits. Here, Liberty erroneously relied upon the reimbursement limitations of 627.736(5)(a)(2)(f) alleging that it reimbursed Plaintiff at a reasonable amount and therefore, Liberty argues it should not have had to pay anything further due to its subsequent exhaustion of PIP benefits under the policy.
An insurer’s payment of $10,000 in PIP benefits in the order the bills were received is not the only hurdle to clear when determining whether an insurer has appropriately exhausted benefits. A crucial factor to consider is the insurer’s chosen method and priority of making PIP payments as it relates to whether the insurer appropriately exhausted benefits under the subject policy according to the law. In general, an insurer is required to process all bills in the order in which they are received. . .The English Rule applies among assignees of PIP benefits. See Pinnacle Medical, Inc. d/b/a Iso Data Diagnostics v. Allstate Ins. Co., 5 Fla. L. Weekly Supp. 663a (Fla. 17th Cir. Ct. App. 1998); Boulevard National Bank of Miami v. Air Metal Industries, Inc., 176 So.2d 94 (Fla. 1965) and State Farm Fire and Casualty Company v. Ray, 556 So.2d 811 (Fla. 5th DCA 1990). Here, Liberty paid the bills in the order in which they were received on this PIP claim so the English Rule was properly complied with in this instance.
As Liberty’s policy clearly states that it will pay 80% of reasonable expenses, the question presented is whether or not Liberty was permitted to use the payment methodology of 200% of Medicare Fee Schedule Part B without electing to do so in its policy of insurance and then rely on an exhaustion of benefits defense despite the fact that all payments were improperly made without any election of the reimbursement limitations found in Fla. Stat. §627.736(5)(a)(2)(f)? This Court answers this question in the negative. If Liberty did not want to pay 80% of Plaintiff’s reasonable charges, then Liberty could have properly elected in its policy to utilize the reimbursement limitations found in §627.736(5)(a)(2)(f), and then perhaps the amount of payment would have been the relevant inquiry. Here, Liberty merely applied 200 percent of Medicare Part B and reimbursed Plaintiff’s bill at that rate. Liberty chose to take the gamble that it was entitled to avail itself of the limitations set forth in 627.736(5)(a)(2)(f) in adjusting its claims without properly electing to do so in its own policy of insurance. See Geico General Ins. Co. v. Virtual Imaging Services., Inc., 38 Fla. L. Weekly S517a (Fla. July 3, 2013); 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]; and Geico General Ins. Co. v. Virtual Imaging Services., Inc., 79 So.3d 55 (Fla. 3rd DCA 2011) [36 Fla. L. Weekly D2597a].
Moreover, this Court is persuaded by the recent 11th Circuit Court Appellate decision issued in Geico Indemnity Co. v. Gables Insurance Recovery, Inc. a/a/o Rita M. Lauzan, 20 Fla. L. Weekly Supp. 862a (Fla. 11th Cir. Ct. App. 2013) where the Court answered the following questions in the affirmative. “First, whether a trial court can require an insurer to pay PIP benefits when all benefits under the policy have been exhausted. Second, whether the trial court’s reliance on Geico v. Virtual Imaging was proper as that case was wrongly decided and the issue is subject to reconsideration by the Florida Supreme Court.” The 11th Circuit Court sitting in its appellate capacity determined that the insurer’s payment was wrongful because instead of paying in accordance with the clear and unambiguous language of its policy (its contractual promise to its insured to pay 80% of reasonable medical expenses), the insurer chose to “roll the dice” on the permissive provision in §627.726(5)(a)(2)(f). “The fact that Geico may have believed its payment was made in accordance with the 2008 PIP Statute is of no import. The fact remains that Geico promised its insured that it would pay 80% of reasonable medical expenses and it broke that promise on the mistaken belief that it could avail itself of the permissive “safe harbor” reimbursement limitations in §627.726(5)(a)(2)(f).” See Id. above.
Finally, Coral Imaging Services a/a/o Virgilio Reyes v. Geico Indemnity Ins. Co., 955 So.2d 11 (Fla. 3rd DCA 2006) [31 Fla. L. Weekly D2478a] offers further direction to the Court in situations where providers are paid in a manner not contemplated by Florida Statute §627.736. Coral Imaging is a case where the Third District held that the insurer was required to pay in excess of its $10,000 policy limits because it had paid bills to a medical provider who submitted those bills untimely. The Coral Imaging decision held that those wrongful payments should be considered gratuitous in nature, and therefore, the fact that the insurer exhausted benefits did not shield it from paying above the policy limits of liability. See Progressive Express Ins. Co. v. South Florida Institute of Medicine, Inc., 14 Fla. L. Weekly Supp. 520a (Fla. 11th Cir. Ct. App. 2007) citing Coral Imaging Services a/a/o Virgilio Reyes v. Geico Indemnity Ins. Co. above. The law is clear that insurance contracts are construed in accordance with the plain language of the policy and insurance policies should be construed in a manner most favorable to the insured where there is any ambiguity in the policy. See Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29 (Fla. 2000) [25 Fla. L. Weekly S211a] and Flores v. Allstate Ins. Co. 819 So.2d 740 (Fla. 2002) [27 Fla. L. Weekly S499a].
In the case at bar, Liberty incorrectly paid Plaintiff’s bills by calculating the bills at 200% of Medicare Fee Schedule Part B without properly electing to do so in its policy, thereby wrongfully exhausting PIP benefits under the subject policy. As such, Liberty is prohibited from asserting that benefits were appropriately exhausted on this claim or that insufficient benefits remain for the full 80% payment of Plaintiff’s bills. Therefore, the Court finds that Liberty must pay the full 80% of Plaintiff’s bill pursuant to what Liberty promised to pay in its policy of insurance (“80% of reasonable expenses”). As previously stated herein, Plaintiff’s Motion for Summary Judgment is hereby GRANTED as to the issue of Reasonableness of Plaintiff’s Bills/Charges. As to the issue of exhaustion of benefits, Defendant’s Motion for Final Summary Judgment is hereby DENIED.
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