22 Fla. L. Weekly Supp. 463a
Online Reference: FLWSUPP 2204ARENInsurance — Personal injury protection — Demand letter — Sufficiency — PIP statute does not require that demand letter account for prior payments made by insurer or attempt to state exact amount owed by insurer — Insurer waived issue of defective demand letter by failing to raise issue before suit was filed — Mathematical errors or inconsistencies do not void otherwise compliant demand letter
L.P. MEDICAL, INC. a/a/o REGLA ARENAS, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, General Jurisdiction Division. Case No. 12-07988 SP 26 (04). October 21, 2014. Lawrence D. King, Judge. Counsel: Jonathan Friedland, Friedland Law Group, for Plaintiff. John Gioannetti, Roig Lawyers, for Defendant.
ORDER DENYING DEFENDANT’SMOTION FOR FINAL SUMMARY JUDGMENT ANDGRANTING PLAINTIFF’S CROSS MOTION FORSUMMARY JUDGMENT ON DEFENDANT’SSECOND AFFIRMATIVE DEFENSE IN THEIR ANSWERFILED ON JANUARY 23, 2013 REGARDING PLAINTIFF’SALLEGED FAILURE TO COMPLY WITHTHE PRE-SUIT DEMAND REQUIREMENTS
THIS CAUSE came before the Court for hearing on October 14, 2014, on Defendant’s and Plaintiff’s Cross-Motions for Summary Judgment on compliance with Florida Statutes §627.736 (10) regarding Plaintiff’s alleged failure to comply with the pre-suit demand requirements. The Court, having reviewed the motions and entire Court file, read relevant legal authority; heard argument, and been sufficiently advised in the above issues, finds as follows:
The Defendant’s position in this case is that the Plaintiff’s Pre-suit Demand Letter (“PDL”) fails to satisfy § 627.736(10) because it failed to account for “prior payments made” and fails to state the “exact amount owed.” Defendant advises of certain inconsistencies within the PDL. According to the Defendant, if the PDL is not exact “to the penny” as to the amount owed, it is non-compliant. The Plaintiffs position is that it satisfied the condition precedent because it properly referenced the amount billed requesting payment of unpaid PIP benefits. Next, the Plaintiff argues that the Defendant waived any defects in the Plaintiff’s PDL because the Defendant did not raise such an issue until after litigation was initiated. Third, the Plaintiff alleges that it had no duty to compute the amounts previously paid or exact amount owed as there is no such requirement in the statute. Furthermore, Plaintiff was not even in possession or made aware of any prior payments at the time of sending out its demand letter. Finally, the Plaintiff argues that the court must construe any condition precedent requirements in Fla. Stat. 627.736(10) narrowly so as to not unduly restrict a Florida citizen’s constitutionally guaranteed access to courts.I § 627.736(10)
The enumerated requirements of a PDL are contained within § 627.736 (10). The statute states, in pertinent part:
DEMAND LETTER, —
(a) As a condition precedent to filing any action for benefits under this section, the insurer must be provided with written notice of an intent to initiate litigation. Such notice may not be sent until the claim is overdue, including any additional time the insurer has to pay the claim pursuant to paragraph (4)(b).
(b)The notice required shall state that it is a “demand letter under s. 627.736(10)”and shall state with specificity:
1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured.
2. The claim number or policy number upon which such claim was originally submitted to the insurer.
3. To the extent applicable, the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment. service, or accommodation, and the type of benefit claimed to be due. A completed form satisfying the requirements of paragraph (5)(d) or the lost-wage statement previously submitted may be used as the itemized statement. To the extent that the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, the claimant shall attach a copy of the insurer’s notice withdrawing such payment and an itemized statement of the type, frequency, and duration of future treatment claimed to be reasonable and medically necessary. (emphasis added).
A plain reading of the statute shows that by the Plaintiff attaching a copy of the medical provider’s itemized ledger and stating within its PDL the named insured, copy of the assignment, claim number, policy number, dates of service, amount billed, “amount claimed to be due” in medical bills in its PDL, it has complied with the requirement of the condition precedent. Plaintiff can also send an itemized statement which gives the insurance carrier all the information it needs to confirm the dates and services at issue as well as each exact amount for that treatment, service, accommodation, or supply. The itemized statement can be a CMS-1500, or HCFA form, or any substantial equivalent to place the carrier on notice, such as the itemized ledger. Once the carrier is sent a PDL by a potential litigant, the Plaintiff cannot initiate litigation for thirty days. This “safe harbor” gives the insurance carrier a second opportunity to review the bills sent in by the provider during the treatment period and confirm that the bills were all properly received and adjusted by the insurance carrier. In this case, the facts are not in dispute. The Plaintiff attached an itemized ledger giving the insurance carrier the requisite information it needed to confirm the dates at issue, the services rendered, and the exact charge for each service.
The Defendant alleges that § 627.736 requires the Plaintiff to include prior payments made by the Defendant in the PDL. This Court rejects the Defendant’s reading as there is no such language supporting such a requirement. Furthermore, specifically in this case the Plaintiff’s counsel was not even in receipt of any prior payment from the Defendant where State Farm failed to mail PIP benefits to the correct address and payment for said benefits were not received and posted until after Plaintiff’s demand letter had been sent to the Defendant. Further, the Court fails to understand how including such payments, which the Defendant, as the payor, is already aware of, fosters resolution of any claim. This Court also rejects the Defendant’s contention that the Plaintiff includes the exact amount owed.
This Court notes that other courts around the State of Florida have already rejected the Defendant’s arguments. In EBM Internal Medicine a/a/o Bernadette Dorelien v. State Farm Mutual Automobile Insurance Company, 19 Fla. L. Weekly Supp. 410a, the Honorable Gary Flower heard both contentions (“amounts previously paid” and “exact amount owed”) and rejected both:
“[T]he Court is unclear, assuming it accepted the Defendant’s interpretation of F.S. § 627.736(10), how a claimant is supposed to be able to adjust a PIP claim to make a determination as to the exact amount owed, When factors such as application of the deductible, knowledge as to the order in which bills were received from various medical providers, and whether the claimant purchased a MedPay provision on a policy (as well as other issues) are unknown to the medical provider, knowledge as to the exact amount owed is virtually impossible. A strict construction of the statute only says that a pre-suit demand must specify “[to] the extent applicable. . . an itemized statement specifying each exact amount. . .” With the various factors that must be considered by the carrier when determining the exact amount to pay on a claim, and the fact that this information is readily available to the carrier and virtually never readily available to the medical provider submitting a claim, it is not reasonable to expect the provider to know the “exact amount owed” since said amount could vary amongst PIP applicants (depending on the language of each individual policy). Further, the Defendant fails to convince this Court of the consequence of failing to list the exact amount owed. This Court could surmise endless scenarios where the provider (or claimant) would need to know certain information in order to properly compute the exact amount owed based on a multitude of factors, including the ones listed above.” Dorelien, at 410.(emphasis in original)
The burden to adjust the claim is on the insurance company, not the provider. The provider has a duty to supply the insurance carrier with its bills in a timely manner, which was done in this case. Therefore, once the provider supplied this information to the carrier a second time in the form of an itemized ledger and other specificities mentioned above within its PDL, it complied with the requirements of § 627.736. Therefore, the Court finds that the Plaintiff substantially complied with Florida Statute 627.736(10). State Farm paid the claim at the Medicare Part B Fee Schedule pursuant to the demand letter and the reimbursement of the medical bill is the issue in this case and therefore the Defendant cannot claim any prejudice. Plaintiff’s second demand letter which was sent on August 16, 2012 was sent prior to payment and posting of State Farm’s payment and is therefore correct at the time the demand letter was sent. This court distinguishes the Venus Health Center (a/a/o Joaly Rojas) v. State Farm Fire and Casualty Company, 21 Fla. L. Weekly Supp. 496a, FLWSUPP 2106ROJA (Fla. 11th Jud. Cir., Miami-Dade Cty. (Civil Division), March 13, 2014) case as Plaintiff does not need to list every line item of every payment listed in the demand letter. Finally, the demand letter was satisfactory since nowhere in the statute does it state that you need to demand med pay specifically within the demand letter since State Farm is in the better position to determine what coverages apply in the specific policy as quite often the Plaintiff is not in possession of same.
II-WAIVER
The Plaintiff argues that, even assuming its PDL was deficient for not computing the exact amount owed, prior payments made, or containing math errors, the Defendant waived these deficiencies by not raising any issue with the PDL until after litigation was initiated, which constitutes a waiver. In United Automobile Ins. Co. v. Juan Manuel Perez, 18 Fla. L. Weekly Supp. 31a (Fla. 11th Cir. Ct. 2010), the insurance carrier, United Automobile, raised numerous issues in its motion for summary judgment challenging the Plaintiff’s PDL. The Court rejected the carrier’s arguments, stating that the questions raised could have been remedied if the Defendant made some inquiry. Instead “the insurance company waited until after suit was filed to make known the reason it did not pay the bill, by including the existence of the defective demand letter in its amended affirmative defenses. By failing to raise that easily remedied issue until after suit was filed; the insurance company waived it.” Like in Perez, here the Defendant failed to raise any issue with the Plaintiff’s PDL until after suit was filed. In the case at hand, a simple phone call could have resolved any and all issues with the amount demanded and the insurance company was in the best position to advise Plaintiff of any defects in its demand letter.
Once an insurance carrier sends a PDL and the response fails to take issue, with any specificity, of the alleged non-compliance with the Plaintiff’s PDL, then the carrier cannot come back post-litigation and raise the issue for the first time once litigation is initiated. To allow such conduct would encourage carriers not to send demand letter responses or send demand letter responses without raising any issue as to the demand letter and allow them to “sit on their hands” instead of trying to respond or investigate a claim. Then, after suit is initiated, a carrier can look for any technical defect, even if such a defect had no effect on the ability of the Defendant to evaluate the claim during the 30-day “safe harbor” period, and move to have a case dismissed on summary judgment. Therefore, since the Defendant failed to raise any objection in response to the Plaintiff’s PDL prior to litigation, the defense is now waived.
III – MATHEMATICAL INCONSISTENCIES.
The Defendant also states that the PDL is non-compliant because of “mathematical inconsistencies” within the Plaintiff’s PDL. That is, even assuming the Plaintiff attached an itemized ledger and substantially complied with Fla. Stat. 627.736(10), the PDL still is not compliant because the additional information supplied by the Plaintiff in an attempt to enumerate the prior payments made and exact amount owed created “confusion” for the Defendant. Therefore, an otherwise compliant PDL is now made “noncompliant” by the inclusion of the additional calculations. The Court rejects this position for several reasons:
1.) The duty to adjust the claim rests solely on the insurance carrier, not the provider. Therefore, even assuming the provider included incorrect mathematical calculations, such information does not shift the non-delegable duty from the carrier to the provider.
2.) The insurance carrier, not the provider, is the only party in a position to accurately determine the exact amount owed. When an adjuster must account for numerous factors, such as whether there is a deductible, whether the policy contains Med-Pay, whether other providers submitted bills that must be accounted for; and, which payment methodology the carrier intends to rely on for payment, it is virtually impossible for a provider to calculate the exact amount owed. If such a calculation is futile and not mandated by statute, the Plaintiff should not be penalized for gratuitously attempting to include additional information.
3.) As noted in Horizon Medical Group, Inc. v. United Automobile Insurance Company, 15 Fla. L. Weekly Supp. 823a (Fla. 11th Judicial Circuit April 16, 2008, Order of Judge Eli Breger), an insurer, such as the Defendant, which retains records as to amounts paid, the total amount of bills received, the order in which bills have been received, the manner in which bills have been applied to the deductible, and the remaining insurance benefits, is possessed of greater knowledge with regard to any given PIP claim as compared to an insured or medical provider to determine the amount which remains payable or may be payable under the policy of insurance. Also see, Mauricio Chiropractic Group a/a/o Rafael Quinones v. USAA Casualty Insurance Group, 18 Fla. L. Weekly Supp 82(b) (Fla. 9th Judicial Circuit, September 1, 2010) Order of Judge Antoinette Plogstedt, “The statute does not require the Plaintiff, or any claimant, to provide an insurer, including the Defendant, with the exact amount of PIP benefits which are ultimately determined to be due in a specific claim and/or case nor does the statute state that any alleged accounting oversight nullifies an otherwise compliant demand. Such an interpretation would frustrate the legislative intent of the PIP statute; especially in this case where the Defendant was not prejudiced and was able to investigate the claim and determine which amounts were paid and which amounts were not.”)
Therefore, based on all the above reasons, the Court finds that any mathematical errors or inconsistencies on the Plaintiffs PDL do not void the otherwise compliant PDL.
IV – ACCESS TO COURTS
Finally, this Court is also mindful of its constitutional duty to allow litigants access to courts. In Pierrot v. Osceola Mental Health, 106 So.3d 491 (Fla. 5th DCA 2013) [38 Fla. L. Weekly D131a], the Fifth District mandated that conditions precedent must be construed narrowly in order to allow Florida citizens access to courts. A PDL is a condition precedent to filing a lawsuit pursuant to §627.736. Therefore, when examining a potential litigant’s burden in complying with a condition precedent, “Florida courts are required to construe such requirements so as to not unduly restrict a Florida citizen’s constitutionally guaranteed access to courts.” Apostolico v. Orlando Regional Health Care System, 871 So.2d 283 (Fla 5th DCA 2004) [29 Fla. L. Weekly D750b]. Requiring the Plaintiff to calculate the exact amount owed or include prior payments made is nowhere listed as a requirement to satisfy §627.736(10). In fact, the Defendant’s position is that, not only must this information be included, but if the calculations do not mirror those of the insurance carrier, the PDL is still not compliant. This language is absent from § 627.736 (10). For the court to hold a potential litigant to the high standard suggested by the Defendant would effectively result in a constitutional denial of access to courts. While the Fifth District Court of Appeal in Apostilico and Pierrot addressed conditions precedent in a medical malpractice paradigm, the rationale of allowing full and unencumbered access to courts applies equally in a PIP context with respect to a PDL. See, Apostilico, at 286 (“While it is true that presuit requirements are conditions precedent to instituting a malpractice suit, the provisions of the statute are not intended to deny access to courts on the basis of technicalities”) (emphasis added), citing, Archer v. Maddux, 645 So2d 544 (Fla. 1st DCA 1994).
Therefore, it is ORDERED and ADJUDGED that Defendant’s Motion for Summary Judgment is DENIED and Plaintiff’s Cross-Motion for Summary Judgment is GRANTED.
