22 Fla. L. Weekly Supp. 637a
Online Reference: FLWSUPP 2205LEIVInsurance — Personal injury protection — Coverage — Exhaustion of policy limits — In absence of any evidence of bad faith, where benefits were exhausted in payment of other medical providers before assignee of medical provider filed suit for balance of reduced claim, insurer is entitled to summary judgment — Insurer was not required to reserve funds for claim reduced through erroneous application of statutory fee schedule and is not liable for balance of reduced claim after exhaustion of benefits
GABLES INSURANCE RECOVERY A/A/O VIVIAN A. MONTEAGUDO LEIVA, Plaintiff, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 12-24280-SP-05 (01). October 8, 2014. Shelley J. Kravitz, Judge. Counsel: Robert N. Pelier, General Counsel, Coral Gables, for Plaintiff. Patrick J. Gerace and Neil V. Singh, Law Offices of Neil V. Singh, Fort Lauderdale, for Defendant.AMENDED FINAL ORDER GRANTINGDEFENDANT’S AMENDED MOTIONFOR FINAL SUMMARY JUDGMENT
THIS CAUSE having come before the Court on September 24, 2014, pursuant to Defendant’s Amended Motion for Final Summary Judgment on Exhaustion of Benefits, the Court having reviewed the file, affidavits, pleadings, considered the arguments of Counsel 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 FACTS
1. The above-captioned case involves a suit for personal injury protection (“PIP”) benefits.
2. On or about July 11, 2008, the Plaintiff’s assignor, VIVIAN A. MONTEAGUDO LEVIA, was allegedly involved in an automobile accident. Thereafter, she sought treatment from and in that process assigned her rights to various medical providers.
3. On or about July 14, 2008, VIVIAN A. MONTEAGUDO LEVIA sought treatment from and assigned her benefits to Plaintiff’s predecessor in interest, All X Ray Diagnostic Services, Corp. (“All X-Ray”).
4. On or about August 4, 2008, the Defendant received bills from AZJ Medical Center, Inc., for dates of service July 14, 2008, through July 31, 2008, in the amount of $8,780.00. The Defendant reduced these charges to the allowed amount(s) under 200% of the Medicare Part B fee schedule and the Worker’s Compensation fee schedule. The Defendant paid (80% of $4,848.32) $3,878.66 to AZJ Medical Center, Inc., on or about August 15, 2008.
5. On or about August 11, 2008, the Defendant received bills from Manuel A. Hidalgo, D.C., for date of service July 12, 2008, in the amount of $300.00. The Defendant reduced these charges to the allowed amount(s) under 200% of the Medicare Part B fee schedule. The Defendant paid (80% of $198.76) $159.01 to Manuel A. Hidalgo, D.C., on or about August 21, 2008.
6. On or about August 25, 2008, the Defendant received another set of bills from AZJ Medical Center, Inc., for dates of service August 4, 2008, through August 18, 2008, in the amount of $4,620.00. The Defendant reduced these charges to the allowed amount(s) under 200% of the Medicare Part B fee schedule and the Worker’s Compensation fee schedule. The Defendant paid (80% of $2,423.52) $1,938.82 to AZJ Medical Center, Inc., on or about September 4, 2008.
7. After previously receiving a notice of initiation of treatment from All X-Ray on or about July 24, 2008, the Defendant received bill(s) from All X-Ray (on or about August 25, 2008) for treatment provided to VIVIAN A. MONTEAGUDO LEVIA on date of service July 14, 2008, in the amount of $1,800.00. The Defendant reduced these charges to the allowed amount(s) under 200% of the Medicare Part B fee schedule. The Defendant paid (80% of $298.52) $238.82 to All X-Ray on or about September 4, 2008.
8. After receiving payment, All X-Ray executed a subsequent assignment of any rights it had to the Plaintiff to pursue collection of the difference between what the Defendant already paid at the reduced rate of reimbursement and the amount charged.
9. The Defendant continued to receive bills from other providers covered under the subject PIP policy with the Defendant. The Defendant continued to reduce the bills received and paid the claims as they became due.
10. On or about October 31, 2008, the Defendant paid $90.40 to AZJ Medical Center, Inc., exhausting the full $10,000.00, in PIP benefits under the subject policy of insurance.
11. More than four years after paying All X-Ray, the Defendant was served with Plaintiff’s initial Statement of Claim (“Complaint”) on December 6, 2012. The Complaint seeks damages for overdue No-Fault Benefits for date of service July 14, 2008, under a breach of contract theory.
12. On January 10, 2013, upon receipt of Defendant’s answer and affirmative defenses the Plaintiff moved for leave to amend its Statement of Claim to allege three (3) counts: Breach of Contract (Count I), Request for Declaratory Judgment (Count II), and Breach of Implied Covenant of Good Faith and Fair Dealing (Count III).
13. On March 18, 2013, the Court entered an Order denying Plaintiff’s motion to amend Statement of Claim to add Count II Request for Declaratory Judgment and Count III Breach of Implied Covenant of Good Faith and Fair Dealing. On June 8, 2013, the Court entered an Order denying Plaintiff’s motion for rehearing/reconsideration on the March 18, 2013, ruling denying Plaintiff’s motion to amend.
14. Moreover, there is no 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 and payments were issued to providers for timely submitted bills.
15. The Defendant fully performed its contractual obligations under the insurance contract by paying 100 percent of the insurance benefits available under the PIP portion of the subject policy to VIVIAN A. MONTEAGUDO LEVIA’S medical providers and entities, including All X-Ray, lawfully entitled to receive said PIP benefits.
16. Accordingly, there is no coverage for the Plaintiff’s claim for PIP benefits as the limits of insurance coverage available under the policy, $10,000.00 in PIP benefits, were exhausted.
QUESTION PRESENTED
The question presented to the Court is whether the exhaustion of benefits absolves the insurer from any responsibility to pay an otherwise valid claim where the exhaustion occurred after the insurer paid an amount that the provider claims is less than required by the contract; specifically where the Defendant paid the provider (Plaintiff’s assignor) at 80% of 200% of the Medicare Part (B) Fee Schedule without a clear election in the policy.DISCUSSION
The Court answers this question in the affirmative extending the reasoning of Northwoods / Wellness, Simon, Standup MRI, and Sheldon. In Northwoods / Wellness, the Fourth District Court of Appeal held that “post-suit exhaustion of benefits should be treated no differently than pre-suit exhaustion of benefits, as long as the benefits’ compensability under PIP has not been established. Once the PIP benefits are exhausted through the payment of valid claims, an insurer has no further liability on unresolved, pending claims, absent bad faith in the handling of the claim by the insurance company.” Northwoods Sports Medicine and Physical Rehab, Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
Specifically, the Fourth DCA addressed whether a post-suit exhaustion of benefits absolves the insurer from any responsibility to pay an otherwise valid claim where the exhaustion occurred after the insurer “paid an amount that the provider claims is less than required by the contract.” Id. at 5 (addressing the fourth certified question 4(a) in Wellness). The Fourth DCA answered this question in the affirmative clearly extending the reasoning of Simon, Stand-up MRI, and Sheldon in that it rejected the reserve or hold theory that when an insurer reduces a provider’s claim, it must set up a reserve in case it is later required to pay the full claim. Id. at 5-6 (noting adherence to Simon and its progeny); see Simon v. Progressive Express Ins. Co., 904 So. 2d 449, 450 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]; Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]; Sheldon v. United Services Auto. Ass’n, 55 So. 3d 593 (Fla. 1st DCA 2010) [36 Fla. L. Weekly D23a]. See Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab, Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
Plaintiff, GABLES INSURANCE RECOVERY INC. as assignee of the insurance contract is entitled to only those rights and benefits set forth in the policy and cannot gain more from the insurance company than the contractual benefit amount. See Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]; see also Allstate v. Shilling, 374 So. 2d 611 (Fla. 4th DCA 1979); GEICO v. Robinson, 581 So.2d 230 (Fla. 3rd DCA 1991); Atkins v. Bellefonte Ins. Co. 342 So.2d 837 (Fla. 3rd DCA 1977); Dixie Ins. Co. v. Lewis, 484 So. 2d 89 (Fla. 2nd DCA 1986). It appears that in the instant case, Plaintiff, in its breach of contract suit, seeks benefits beyond the contractual amount set forth by the policy. Progressive’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 statute, and allowed the insured to continue receiving medical treatment for her injuries. There is no requirement that an insurance company set aside a reserve fund for claims that are reduced or denied. Dr. Robert D. Simon v. Progressive Express Ins. Co., 904 So.2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]. As such, Defendant is not responsible for the insured’s over use of the policy and the court has found that the assignees should look to the insured for any additional payments. See Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d at 6-7 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]. It is undisputed that Defendant, as in Simon, paid the insured’s claims as they were received and attempted to settle as many claims as possible with the limited amount of money and time available. In Millennium Diagnostic Imaging Center, Inc. v. Progressive Express Ins. Co., 3D07-2628 (Fla. 3d DCA 2008) [33 Fla. L. Weekly D1742b], in denying Millennium’s petition for certiorari of the 11th Judicial Circuit Appellate Court’s ruling in Progressive Express Ins. Co. v. Millennium Diagnostic Imaging Center, Inc. 14 Fla. L. Weekly Supp. 938a (Fla. 11th Cir Appellate July 2007)(insurer not required to hold remaining PIP benefits in reserve funds each time claims are reduced or denied), the Third District Court of Appeals adopted the holding in Simon, that an insurance carrier has no obligation to reserve PIP benefits. See Farinas v. Florida Farm Bureau General Ins. Co., 850 So.2d 555, 560 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D1023b].
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. v. Stand-up MRI of Orlando, 990 So. 2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]. Additionally, in Sheldon, D.C. v. United Services Automobile Association, 55 So.3d 593 (Fla. 1st DCA 2011) [36 Fla. L. Weekly D23a], the Court found in that case that Florida courts have established that, once an insurer has paid out the policy limits to the insured (or to various providers as assignees), it is not liable to pay any further PIP benefits, even those that are in dispute. (Emphasis added).
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. The 11th Circuit Court sitting in its appellate capacity in Lauzan determined that an insurer’s payment was “wrongful” because instead of paying in accordance with the clear and unambiguous language of its policy to pay 80% of reasonable medical expenses it paid pursuant to the Medicare Fee Schedule. First, in Lauzan, the Circuit Court failed to cite any of the binding DCA case law on the issue of exhaustion of benefits such as Simon, Stand-up MRI, or Sheldon. These cases were recently reaffirmed by the Fourth DCA in the consolidated case of Northwoods /Wellness. See Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab., Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
Specifically, in Northwoods / Wellness, the Fourth District Court of Appeal addressed whether a post-suit exhaustion of benefits absolves the insurer from any responsibility to pay an otherwise valid claim where the exhaustion occurred after the insurer “paid an amount that the provider claims is less than required by the contract.” Id. at 5 (addressing the fourth certified question in Wellness). Florida appellate courts have “decline[d] to create a requirement that an insurance company set aside a ‘reserve’ fund for claims that are reduced or denied.” Simon v. Progressive Express Ins. Co., 904 So. 2d 449, 450 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]; accord Stand-Up MRI, 990 So. 2d at 5. According to the Fourth District Court of Appeal, imposing a “reserve” or “hold” requirement on a PIP insurer who reduced or denied a claim “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.” Id. Furthermore, requiring insurers to allocate “reserve” funds for prospectively disputed claims would be contrary to the legislative intent of the PIP statute, which mandates prompt payment of medical bills. See Stand-Up MRI, 990 So. 2d at 6; Simon, 904 So. 2d at 450. Northwood Sports Medicine and Physical Rehabilitation, Inc. vs. State Farm Mutual Automobile Insurance Company, 18 Fla. L. Weekly Supp. 1201a (Fla. Palm Beach Cty. Ct. Aug. 25, 2011); Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab., Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
Further, this Court finds that the Plaintiff’s reliance on Coral Imaging Service v. GEICO Indemnity Insurance Company, 955 So. 2d 11 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D2478a], is misplaced. The insurer in Coral Imaging improperly paid untimely, non-compensable claims and subsequently denied timely and compensable claims alleging that benefits had been exhausted. Unlike in Coral Imaging, the insurer in this case, Progressive, did not pay any claims that were non-compensable as a matter of law. The Court finds that holding of Coral Imaging is not applicable to the instant case and declines to extend that holding further in conflict with the well reasoned opinion in Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab., Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
In addition, the Court finds that the following language in Northwoods / Wellness citing to Simon and its progeny, entitled the Defendant to entry of a final summary judgment despite the fact that Progressive 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 contend 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 also the prerogative of insurance companies to pay, reduce, or deny claims. Simon 904 So.2d 449 Id.
In sum, this Court finds that it is bound by the decisions of the Florida District Court of Appeals. The Fourth DCA opinion in Northwoods / Wellness is controlling over this Court and effectively quashes the holding of GEICO Indemnity Company vs. Gables Insurance Recovery a/a/o Rita M. Lauzan, 12-069 AP, Trial Case No.: 10-000985SP26(03) [20 Fla. L. Weekly Supp. 862a]. See Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab., Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a]. (The decisions of the district courts of appeal represents the law of Florida unless and until they are overruled by this Supreme Court); See Stanfill vs. State, 384 So.2d 141, 143 (Fla. 1980). [Emphasis supplied].RULINGS
It is therefore ORDERED AND ADJUDGED as follows:
1. Defendant’s Amended Motion for Final Summary Judgment is hereby GRANTED.
2. 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 Defendant’s attorney’s fees and taxable costs.
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