22 Fla. L. Weekly Supp. 1164b
Online Reference: FLWSUPP 2210STEWInsurance — Personal injury protection — Discovery — Where insurer unilaterally, albeit improperly, elected to use permissive statutory fee schedule to calculate reimbursement rate, neither insurer nor medical provider may compel discovery on fact-dependent method for determining reasonableness of charges
FLORIDA HOSPITAL MEDICAL CENTER, as assignee of John Stewart, Plaintiff, v. PROGRESSIVE SELECT INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2014-SC-11927-O. April 22, 2015. Steve Jewett, Judge. Counsel: William England, Bradford Cederberg, P.A., Orlando, for Plaintiff. Hector Muniz, Orlando, for Defendant.
ORDER
THIS MATTER having come before this Honorable Court on Plaintiff’s Motion to Compel Deposition of Defendant’s Corporate Representative Pursuant to Fla. R. Civ. P. 1.310(b)(6), Plaintiff’s Motion for Protective Order, Defendant’s Motion to Compel Deposition Dates, Defendant’s Motion to Compel Better Responses and Motion to Compel Responsive Documents, and Defendant’s Motion to Strike Objections and Motion to Compel Responses to Interrogatories and this Honorable Court having heard arguments of counsel and being otherwise fully advised in the premises, it is hereby,
ORDERED AND ADJUDGED that:
1. The Plaintiff, a hospital facility, submitted its medical bill for date of service 5/11/2010 seeking reimbursement from Defendant. Defendant’s explanation of benefits limits the reimbursement to 80% of 75% of the Plaintiff’s charges. Defendant’s explanation of benefits provides explanation codes “381” and “X989”, both provide an identical explanation for the limited reimbursement as follows: “[t]he allowable amount has been calculated pursuant to Florida Statute 627.736(5) which limits reimbursement to 75% of the hospital’s usual and customary charges for emergency services.” This explanation matches the schedule of maximum charges under Fla. Stat. 627.736(5)(a)(2)(b) (2010).
2. This Court relies on the opinion rendered by the Florida Supreme Court in Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a].
3. In determining whether a charge for a particular service or treatment is reasonable, there are two (2) methods by which an insurer may calculate reimbursement methods: 1) is the fact dependent method under 627.736(5)(a)1. (2009) and 2) utilizes the permissive Schedule of Maximum Charges under 627.736(5)(a)(2) (2010). These methods have been described as separate and distinct methods for evaluating the statute’s reasonable expense coverage mandate under Fla. Stat. 627.736(1)(a). The insurer must choose the one payment methodology it will utilize for reimbursement and cannot alternate between the two methods.
4. If the methodologies are separate and distinct, then it is impossible that any of the Schedule of Maximum Charges under (5)(a)(2) could be used in a (5)(a)(1) inquiry. In Virtual Imaging, supra, the Supreme Court held that the insurer had to elect clearly and unambiguously, within its policy, which section it would utilize to reimburse for medical expenses; (5)(a)(1) or (5)(a)(2).
5. The purpose of (5)(a)2 was to reduce costs and eliminate litigation regarding reasonableness of charge. In other words, since Defendant did not rely upon the remaining factors within its policy of insurance when processing the Plaintiff’s bill, it cannot now fall back upon the fact dependent inquiry to determine reasonableness of the charge. Defendant unilaterally determined “reasonableness” when it calculated reimbursement according to the schedule of maximum charges (i.e. 75% of the hospital’s usual and customary charge). To allow opposing parties to fight and compel discovery on unrelated, immaterial or irrelevant legal matters frustrates the clear intent of the statute and judicial economy. As previously noted, the legislative intent behind enacting the schedule of maximum charges was “designed to reduce costs and eliminate litigation regarding what is a ‘reasonable’ charge.” Florida Senate, “Bill Analysis and Fiscal Impact Statement” CS/SB 40-C, Oct. 4, 2007, page 18.
6. This Court is mindful of the language set forth in section 627.736(4)(b), initially enacted in 2001, which states:
This paragraph does not preclude or limit the ability of the insurer to assert that the claim was unrelated, was not medically necessary, or was unreasonable or that the amount of the charge was in excess of that permitted under, or in violation of, subsection (5). Such assertion may be made at any time, including after payment of the claim or after the 30-day period for payment set forth in this paragraph.
7. The court notes that although the decision in Florida Medical was rendered in 2010, it was interpreting the 2005 PIP statute, which did not contain the Schedule of Maximum Charges. The Schedule of Maximum Charges was not added to the PIP statute until 2008. It is logical to conclude that 4(b) was and remains applicable to claims that are processed using the fact dependent reasonableness methodology of Fla. Stat. 627.736(5)(a)(1). It is not logical to apply 4(b) in the context of this present case, where Defendant admittedly utilized, albeit improperly, the Schedule of Maximum Charges, which legislative history tells us was designed to eliminate reasonableness litigation altogether.
8. Regarding appropriate discovery for a (5)(a)(2) election and notice to the insured, the Court finds “reasonableness” discovery (depositions, better interrogatory answers and/or better request to produce responses) shall not be had in this matter by either party. See Allstate Insurance Company v. Langston, 655 So.2d 91 (Fla. 1995) [20 Fla. L. Weekly S217a](discovery in a civil case must be relevant to the subject matter of the case and it must be admissible or reasonably calculated to lead to admissible evidence).
9. Plaintiff’s Motion to Compel Deposition of Defendant’s Corporate Representative Pursuant to Fla. R. Civ. P. 1.310(b)(6) is Granted in Part and Denied in Part. Defendant shall either produce an Affidavit authenticating non-privileged claims file materials such as the medical bills, Explanations of Benefits, the entire insurance policy for the insured, and the most recent PIP payment ledger or Defendant shall produce its Corporate Representative for deposition within 90 days of this Order.
10. Plaintiff’s Motion for Protective Order is Granted.
11. Defendant’s Motion to Compel Deposition Dates is Denied.
12. Defendant’s Motion to Compel Better Responses and Motion to Compel Responsive Documents is Denied.
13. Defendant’s Motion to Strike Objections and Motion to Compel Responses to Interrogatories is Denied.
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