23 Fla. L. Weekly Supp. 1075a

Online Reference: FLWSUPP 2310CORPInsurance — Personal injury protection — Expert witness — Insurer’s expert witness on reasonableness of charges is stricken where insurer has not demonstrated that proffered opinion, that reimbursement rate of 80% of 200% of Medicare fee schedule is maximum reasonable charge, is based on sufficient facts or data and product of reliable principles and methods and that witness has reliably applied principles and methods to facts of case

BEST AMERICAN DIAGNOSTIC CENTER, INC., (Angel Corporan), Plaintiff(s), vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant(s). County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE 13-014950 (53). September 16, 2015. Robert W. Lee, Judge. Counsel: Caroline Perlegas, Marks & Fleischer, P.A., Fort Lauderdale, for Plaintiff. Michael Graham, for Defendant.

ORDER ON PLAINTIFF’S MOTION TO STRIKEDEFENDANT’S EXPERT DR. EDWARD DAUERPURSUANT TO FLA. R. EVID. 90.702 (DAUBERT)

THIS CAUSE having come on to be considered before the Court on September 2, 2015 on Plaintiff’s Motion to Strike Defendant’s Expert Dr. Edward Dauer Pursuant to Fla. R. Evid. 90.702 (Daubert), and the Court having considered Plaintiff’s Motion, the record, argument of counsel and being otherwise sufficiently advised in the premises, it is hereby

ORDERED AND ADJUDGED as follows:

1. On July 27, 2015, this Court heard argument on Plaintiff’s Amended Motion for Final Summary Judgment. The sole remaining issue in this case is the reasonableness of Plaintiff’s charge. In opposition to Plaintiff’s Motion, Defendant filed the affidavit of its expert witness, Dr. Edward Dauer.

2. The Plaintiff has moved to strike Dr. Dauer as an expert witness, contending that Dr. Dauer’s opinions are not based on sufficient facts or data, and they are not the product of reliable principles and methods. The Plaintiff further contends that Dr. Simon has not reliably applied the principles and methods to the facts of this case.

3. Defendant, in making payment to Plaintiff on its claim for No-Fault benefits, utilized the fee schedule methodology and/or payment limitation contained in Fla. Stat. §627.736(5)(a)(2)(f) as its exclusive basis for reimbursement.

4. The undisputed factual record before this Court establishes that Defendant’s policy of insurance does not contain notice of an election to utilize the fee schedule methodology in Fla. Stat. §627.736(5)(a)(2)(f). Stated otherwise, Defendant’s policy does not contain the requisite notice that it would be limiting PIP reimbursements to 200% of the Medicare Fee Schedules. Accordingly, the “Medicare Fee Schedule” payments by Defendant are unauthorized by Defendant’s policy of insurance and in violation of binding precedent. See Geico General Insurance Company v. Virtual Imaging Services, Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]; Geico Indem. Co. v. Virtual Imaging Servs., Inc. (“Virtual I”), 79 So.3d 55, 58 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a]; Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63, 67 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a].

5. As to the issue of reasonableness of Plaintiff’s charge, the Defendant has listed Edward Dauer, MD as a witness that would render expert testimony and relies upon his affidavit.

6. The Court’s August 4, 2015 Order Setting Special Set Hearing (Daubert, Non-Evidentiary), required Defendant to deliver in writing, to the Court and Plaintiff’s counsel, a succinct statement that includes a clear statement of (1) the expert opinion being proffered; (2) the facts and data underlying the proffered opinion; and (3) the method used to select the underlying facts and data. Accordingly, Defendant filed its Succinct Statement Regarding the Expert Opinion in Response to Order Dated August 4, 2015 Relative to the “Daubert” Hearing dated August 28, 2015.

7. The sum and substance of Dr. Dauer’s opinion in his affidavit and in paragraphs 5 and 8 of Defendant’s Succinct Statement is that any charge or payment in excess of 200% of Medicare is unreasonable and no amounts over and above said reimbursement constitute a reasonable charge for services rendered by Plaintiff.

8. Plaintiff contends that the purported opinions of Dr. Dauer are neither “based on sufficient facts or data” nor the product of reliable principles and methods as required by Florida Statutes 90.702(2013). Plaintiff further contends the purported opinions of Dr. Dauer are unreliable and untrustworthy. As such, Plaintiff seeks an Order from this Court precluding Dr. Simon from testifying at trial in this matter.

9. The admissibility of expert testimony is governed by Fla. Stat. §90.702 (2013) which, in July 2013 was amended to adopt the Daubert standard, established by the United States Supreme Court in Daubert v. Merrel Dow, 509 U.S. 579 (1993). The amended statute, in pertinent part, provides that:

If scientific, technical, or other specialized knowledge will assist the trier of fact in understanding the evidence or in determining a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify about it in the form of an opinion or otherwise, if:

(1) The testimony is based upon sufficient facts or data;

(2) The testimony is the product of reliable principles and methods; and

(3) The witness has applied the principles and methods reliably to the facts of the case.

10. Under the newly amended statute, the proponent of the opinion must demonstrate to the Court that the expert’s opinion is “based on sufficient facts or data.” Pan Am Diagnostics, Inc. v. United Automobile Ins. Co., 20 Fla. L. Weekly Supp. 937a (Broward Cty. Ct. 2013). See also Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999). The trial judge is assigned the role of “gatekeeper” to ensure that an expert’s testimony is relevant and reliable. Daubert v. Merrel Dow, 509 U.S. 579 (1993).

11. Daubert established a non-exclusive list of factors for a court to consider in determining the reliability of the methodology used by an expert. Factors to consider include:

(i) Whether the expert’s technique or theory can be tested;

(ii) Whether the technique or theory has been subject to peer review and publication;

(iii) The known or potential error of the technique or theory when applied;

(iv) Whether the technique or theory has been generally accepted in the scientific community.

12. A recent case from Florida’s Third District Court of Appeal, Perez v. Bellsouth Telecommunications, 138 So.3d 492, 496 (Fla. 3d DCA 2014) [39 Fla. L. Weekly D865b] discusses in detail Florida’s shift from the Frye standard to the Daubert standard and the role of a trial judge as the “gatekeeper” of admissible evidence. Perez cites to the requirements of Fla. Stat. 90.702 holding that if appropriately qualified, an expert’s opinion will be allowed if it is “based on sufficient facts or data”, “the product of reliable principles and methods” which have been applied “reliably to the facts” of the case. Id. at 497. Another main point stressed by the Third District Court of Appeal in Perez is that “expert testimony that might otherwise qualify as pure opinion testimony is expressly prohibited.” Instead, an expert opinion must be based upon a “scientific method” of empirical testing data to ensure that conclusions are valid.

13. As reiterated by Defendant’s Succinct Statement, Dr. Dauer is of the opinion that the Medicare Fee Schedule is used by most insurance companies to determine their market value of radiology services and that any charge or payment in excess of 200% of Medicare is unreasonable. Dr. Dauer does not expect to receive reimbursement for his charges in amounts that exceed 200% of what Medicare allows as he believes amounts higher than 200% of Medicare are unreasonable.

14. Dr. Dauer’s opinion, in essence, is “pure opinion” testimony which does not appear to be based on anything other than his own experience which is specifically precluded under Fla. Stat. 90.702. Perez v. Bellsouth Telecommunications, 138 So.3d 492, 496 (Fla. 3d DCA 2014) [39 Fla. L. Weekly D865b](“expert testimony that might otherwise qualify as ‘pure opinion’ testimony is expressly prohibited”). Further there is no evidence to suggest that his opinion is the product of a “reliable” method since it completely disregards medical providers’ charges within the community for the same services rendered by the Plaintiff instead of opining that a “reasonable” charge solely equates to what is reimbursed by Medicare or HMO/PPO negotiated contracts. This opinion is not supported by any facts, data, scientific testing or any studies approving of his methodology which excludes consideration of any amounts, charges, or reimbursements that would exceed 200 of Medicare Part B. This type of opinion is clearly disallowed under the Daubert standard since it is neither “based on sufficient facts or data” nor “the product of reliable principles and methods” which have been applied “reliably to the facts” of the case.

15. Since Dr. Dauer accepts an amount equal to or less than 80% of 200% of Medicare Part B as reimbursement for services rendered by his office he formulates a “pure opinion” that reimbursement rate of PIP insurers equal 80% of 200% of Medicare fee is viewed as the maximum charge that can be deemed reasonable in the community. He then makes a quantum leap concluding that the fees billed in this case are unreasonable.

16. As a preliminary matter, Dr. Dauer’s methodology is flawed because Defendant’s policy of insurance did not contain notice of an election to utilize the fee schedule methodology in Fla. Stat. §627.736(5)(a)(2)(f). As noted by one court, the relevant inquiry is not Defendant’s reimbursements but rather the reasonableness of Plaintiff’s charges¹. See, e.g., New Smyrna Imaging, LLC v. State Farm Mutual Auto Ins. Co., 20 Fla. L. Weekly Supp. 671a (Volusia Cty. Ct. 2013), wherein the court noted:

The relevant inquiry under Fla. Stat. §627.736(5)(a)(1) is the reasonableness of the providers charge. The inquiry is not the reasonableness of State Farm’s reimbursement. If State Farm had elected to utilize the methodology found at 627.736(5)(a)(2)(f), then its reimbursement would be the relevant inquiry because under the provisions of 627.736(5)(a)(2) the provider’s charge is irrelevant.

17. This Court has previously held that systematic and incorrect reimbursements on the part of PIP insurers cannot form the basis of an expert’s opinion that payments by a PIP insurer were reasonable, and such expert opinion is neither “based on sufficient facts or data” nor the “product of reliable principles and methods” as required by Fla. Stat. §90.702 (2013). See, e.g., Coastal Radiology, LLC v. State Fann Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 396a (Broward Cty. Ct. 2014). Indeed, for several years, most insurers erroneously believed they had adequate language in their policies to entitle them to pay at 200% Medicare rate, and most providers blithely accepted such payments. Now, Dr. Dauer purports to rely on these improper payments as a part of the basis for finding that a provider’s charge above 200% of Medicare is not reasonable. This is clearly an improper methodology. In rejecting expert testimony such as that of Dr. Dauer, this Court has previously noted that this type of opinion has been repeatedly rejected by the Courts as rendering the Florida Supreme Court’s decision in Virtual Imaging meaningless.

18. A review of other trial court decisions also reflects that said courts have likewise rejected testimony or an argument that fee schedule payments standing alone without consideration of reasonableness of amounts charged creates a factual issue as to reasonableness of a medical providers charges. See, e.g., Health Diagnostics of Fort Lauderdale, LLC v. USAA Cas. Ins. Co., 20 Fla. L. Weekly Supp. 292b (Broward Cty. Ct. 2012); Hallandale Open MRI, LLC v. State Farm, 20 Fla. L. Weekly Supp. 671a (Volusia Cty. Ct. 2012). Although these decisions are clearly not binding on this Court, the uniformity of these decisions may be persuasive. See Star Casualty v. U.S.A. Diagnostic, Inc., 855 So.2d 251, 253 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D2274a].

19. As a result, for all of the foregoing reasons, the Court finds that the Defendant has not demonstrated to this Court that the proffered opinions of Dr. Dauer are based on sufficient facts or data, nor that the testimony is the product of reliable principles and methods. To the contrary, the opinions proffered are clearly misleading. The Court further finds that, as applied to the issues in this case, Dr. Dauer’s opinions are not based on sufficient facts or data; they are not the product of reliable principles and methods; and the witness has not reliably applied the principles and methods to the facts of this case. Therefore, Dr. Dauer is stricken as an expert on the issue of reasonableness of Plaintiff’s pricing.

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¹See Physician’s Medical Center Jax., Inc. v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 706a (Duval Cty. Ct. 2014)(the issue in the case is whether the provider’s charges are reasonable, not the reimbursement).