22 Fla. L. Weekly Supp. 101b
Online Reference: FLWSUPP 2201BRAYInsurance — 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 — By attaching itemized statement to demand letter, medical provider complied with requirements of section 627.736(10) — Compliant demand letter is not rendered non-compliant by provision of additional information that is mathematically inconsistent with itemized statement — Insurer waived any deficiencies in demand letter by failing to object to letter prior to filing of suit
NEUROLOGY PARTNERS, P.A. D/B/A EMAS SPINE & BRAIN A/A/O SCOTT BRAY, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 16-2013-SC-002069-XXXX-MA (CC-G). August 7, 2014. Scott Mitchell, Judge. Counsel: Adam Saben, Shuster & Saben, for Plaintiff. David Gagnon, Taylor, Day, Grimm & Boyd, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FORSUMMARY JUDGMENT AND DENYING DEFENDANT’SCROSS-MOTION FOR SUMMARY JUDGMENT AS TOCOMPLIANCE WITH F.S. 627.736(10) (DEMAND LETTER)
THIS CAUSE came before the Court for hearing on July 29, 2014 on Plaintiff’s and Defendant’s Cross-Motions for Summary Judgment on compliance with Florida Statutes § 627.736(10). The Court, having reviewed the motions and entire Court file, read relevant legal authority; heard argument, and been sufficiently advised in the premises, 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”. Further, Defendant advises of certain mathematical 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 Plaintiff’s position is that it satisfied the condition precedent because it attached an itemized statement to its PDL. Next, 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. Third, 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. Finally, the Plaintiff argues that the court must construe any condition precedent requirements in § 627.736(10) narrowly so as to not unduly restrict a Florida citizen’s constitutionally guaranteed access to courts.1I – §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 if the Plaintiff attaches an itemized statement to its PDL, it has complied with the requirement of the condition precedent. An itemized statement 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. 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 statement 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. 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 include the exact amount owed. This Court notes that sister courts around the State of Florida, and most notably, within Duval County, 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 “[t]o 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)2
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 statement, it complied with the requirements of § 627.736. Therefore, the Court finds that the Plaintiff complied with requirement to attach a proper itemized statement
.II – 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 statement, 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 “non-compliant” by the inclusion of the additional calculations. The Court rejects this position for three 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) A sister court already addressed this exact issue. In Robert J. Indelicato, D.C. a/a/o Ruby Kish v. State Farm Mutual Automobile Insurance Company, 21 Fla. L. Weekly Supp 184b, the Plaintiff attached a ledger sheet to its PDL that contained more than the requisite information which was required under § 627.736(10), Further, there were mathematical inconsistencies between the ledger totals and the calculations on the front of the PDL. However, Judge Mark Singer correctly stated and explained:
“The Court was made aware of the calculation discrepancy between the total on the ledger sheet and the page 1 of the Notice of Intent. But, as stated above, the statute does not require an exact total of the amount claimed to be due. A total included in the Notice or attached ledger sheet, even if miscalculated or misstated, as in this case, is immaterial to the issue of whether or not the Notice is compliant with the statutory requirements.”
Kish, at 184, footnote 2 (emphasis in original and emphasis added).
This Court agrees with its sister Court in Kish, for to rule otherwise would allow an insurance carrier to look for any technical defect or miscalculation as a ground to attack an otherwise compliant PDL, especially when the itemized statement already contains the information needed to evaluate the claim.
3) 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.
Therefore, based on all the above reasons, the Court finds that any mathematical errors or inconsistencies on the Plaintiff’s PDL do not void the otherwise compliant PDL.
III – 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.
The Defendant argues that § 627.736(10) imposes no duty on it to advise the Plaintiff of anything. This Court agrees that there is no duty to send a response to a PDL contained within §627.736(10). However, once an insurance carrier opts not to send one, or if it sends a response and 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 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.
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 compliant3, 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 So.2d 544 (Fla. 1st DCA 1994).
Therefore, it is ORDERED and ADJUDGED that Plaintiff’s Motion for Summary Judgment is GRANTED and Defendant’s Cross-Motion for Summary Judgment is DENIED.
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1The Plaintiff is NOT challenging the constitutionality of requiring a PDL prior to filing a lawsuit pursuant to § 627.736. The parties, in fact, stipulate to its constitutionality. The challenge at issue here by the Plaintiff is whether the Defendant’s assertion that a PDL must state the exact “amount owed, to the penny” rises to a level that effectively prohibits potential litigants from having access to courts.
2Also see, EBM Internal Medicine a/a/o Jasmine Gaskin v. State Farm Mutual Automobile Insurance Company, 19 Fla. L. Weekly Supp. 382a, wherein Duval County Court Judge Angela Cox ruled similarly, finding no such requirement to include prior payments made or exact amount owed in an PDL; Professional Diagnostic Reading a/a/o Vanessa Rosa v. USAA Casualty Ins. Co., 19 Fla. L. Weekly Supp. 205a (Order of Orange County Court Judge Heather Higbee, March 28, 2011); Mauricio Chiropractic Group a/a/o Rafael Quinones v. USAA Casualty Insurance Company, 18 Fla. L. Weekly Supp. 82b (Order of Orange County Court Judge Antonette Plogstedt, September 1, 2010); Mark S. Scherer, D.C., P.A. a/a/o Natasha Champagne v. MGA Insurance Company, 19 Fla. L. Weekly Supp. 289a, (Order of Palm Beach County Court Judge Deborah Moses-Stephens, November 18, 2011); and, Glenn D. Berger, D.C., P.A., a/a/o Marie Jean v. United Automobile Insurance Company, 16 Fla. L. Weekly Supp. 267b (Order of Broward County Court Judge Martin Dishowitz January 6, 2009).
This Court notes the rationale of Judge Flower was also followed by Manatee County Court Judge Mark Singer in Robert Indelicate, D.C., a/a/o Ruby Kish v. State Farm Mutual Automobile Insurance Company, 21 Fla. L Weekly Supp. 184b, when he denied Defendant’s Motion for Summary Judgment on the same issue with the same arguments advanced by the same insurance carrier as the case before this Court.
3The Court reviewed the Plaintiff’s PDL, which was admitted into evidence by the Plaintiff and authenticated through Request for Admissions propounded to the Defendant. Plaintiff’s PDL lists the “Amount at Issue” on page one as $1,421.63 Therefore, Defendant’s assertion that it must be able to look at the PDL and know how much “it could write a check for to avoid being sued” is inconsistent with a plain reading of the Plaintiff’s PDL. The Defendant actually argues, in effect, that the Plaintiff’s calculations must mirror those of the Defendant in order to be compliant, Again, there is no language in § 627.736(10) to support that standard of compliance.
