23 Fla. L. Weekly Supp. 58b
Online Reference: FLWSUPP 2301MCNAInsurance — Personal injury protection — Discovery — Insurer that allowed full amount of charge when applying charge to deductible without notice that services were unrelated or unnecessary or that charges were unreasonable, cannot dispute reasonableness, relatedness or medical necessity of charge and is not entitled to discovery on those issues
EMERGENCY MEDICAL ASSOCIATES OF TAMPA BAY, L.L.C., as assignee of Shawn Mcnally-Plast, Plaintiff, v. PROGRESSIVE SELECT INSURANCE COMPANY, Defendant. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2013 32455 COCI, Division 82. May 27, 2014. Christopher Kelly, Judge. Counsel: Steven Dell, Bradford Cederberg, P.A., Orlando, for Plaintiff. Eric Biernacki, Orlando, for Defendant.
ORDER
THIS MATTER having come before this Honorable Court on April 16, 2014 pursuant to Defendant’s Motion to Compel Deposition, Defendant’s Motion to Compel Verified Interrogatories, Plaintiff’s Motion to Compel Deposition and Plaintiff’s Motion for Protective Order and this Honorable Court having reviewed the file, heard and considered arguments of counsel and legal authority submitted by the parties, and being otherwise fully advised in the premises, does hereby make the following findings of fact and conclusions of law:
FINDINGS OF FACT
1. This action involves a claim for personal injury protection insurance benefits filed by the Plaintiff, EMERGENCY MEDICAL ASSOCIATES OF TAMPA BAY, L.L.C. (hereinafter “Plaintiff’) as assignee of Shawn Mcnally-Plast (hereinafter “Claimant) against the Defendant, PROGRESSIVE SELECT INSURANCE COMPANY (hereinafter “Defendant”), on July 10, 2013, arising out of an accident that occurred on February 26, 2013.
2. On March 14, 2013 the Defendant appears to have received Plaintiff’s medical bill submitted for reimbursement under the policy for emergency services and care rendered to Claimant February 26, 2013. Defendant allowed the submitted medical bill in full and applied the full amount of the bill to an alleged policy deductible of $1,000.00.
3. On March 8, 2013 the Defendant appears to have received a medical bill submitted by St. Joseph’s Hospital. The Defendant allowed 75% percent of the hospital’s charges, applied $149.00 of the allowed amount to the deductible and then paid the bill in an amount of $6,033.97.
4. The legal issue raised by the Plaintiff involves whether or not the enactment of Fla. Stat. §627.736(4)(c), which requires insurance carriers to set aside $5,000 in PIP benefits for payment to physician providers of emergency services and care rendered in a hospital setting, insulates those protected bills from application to a PIP policy deductible.
5. The Defendant contends while the deductible application is an issue, it is not the sole legal issue. More specifically, the Defendant argues that reasonableness of Plaintiff’s charge, relatedness and medical necessity of the services provided are still unresolved.
6. At the hearing before this Court, the Plaintiff argued that Defendant’s actions in allowing the bill to be applied in full to the policy deductible has framed the issue for this Court. Essentially, the Plaintiff states the matter is a pure legal issue to be decided based on the statute, policy language and actions taken by the Defendant in processing the Plaintiff’s claim.
7. Defendant argued that depositions requested were targeted to address reasonableness of the Plaintiff’s charge and were permitted given the Florida Rules of Civil Procedure and binding case law.
CONCLUSIONS OF LAW
8. As the Fifth District Court of Appeal has observed in recent opinions, Florida’s PIP statute from its inception has been “a complicated piece of legislation, but the successive years of constant amendment and revision have both added to its complexity and detracted from its clarity.” Chiropractic One, Inc. v. State Farm Mutual Auto., 92 So. 3d 871 (Fla. 5th DCA 2012) [37 Fla. L. Weekly D1565a] citing Fla. Med. & Injury Ctr., Inc. v. Progressive Express Ins. Co., 29 So. 3d 329 (Fla. 5th DCA 2010) [35 Fla. L. Weekly D215b]. The observations by the Fifth are certainly applicable to the case at bar.
9. Personal Injury Protection benefits are unique in that they are mandated and governed by statute, yet issued under individual contracts of insurance.
10. The Legislative intent of no-fault insurance statute is to “provide swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption.” Allstate Ins. Co. v. Kaklamanos, 843 So. 2d 885 at 897 (Fla. 2003) [28 Fla. L. Weekly S287a], quoting Ivey v. Allstate Ins. Co., 774 So. 2d 679 at 683(Fla. 2000) [25 Fla. L. Weekly S1103a].
11. In furtherance of the goal to promote the prompt resolution and avoidance of unnecessary litigation by the parties, the statutory scheme places duties upon both an insurer and a medical provider seeking reimbursement. The interplay between these two groups should be considered when ruling on discovery motions in the PIP context.
12. It is the duty of the insurance carrier, more specifically, the licensed adjuster working for an insurance carrier, to determine coverage under the policy of insurance. This duty is owed to the carrier’s customer, the Claimant, who contracted for certain benefits and rights under the statute. At the point and time of processing a medical bill the legal issues are generally framed by the insurance carrier. See generally, Glenn V. Quintana, D.C., P.A. a/a/o Melissa Evans v. State Farm Mutual Automobile Ins. Co., 19 Fla. L. Weekly Supp. 882a (Fla. 11th Jud. Cir. Miami-Dade Co. 2012); United Automobile Insurance Co. v. Riverside Medical Associates, Inc. a/a/o Normandel Burke, 20 Fla. L. Weekly Supp. 389a (Fla. 17th Jud. Cir. Appellate 2012).
13. Defendant will either approve the claim, deny the claim or reduce the claim. Each of these options has specific ramifications for both the insurer and the insured/medical provider.
14. As pointed out by the Fifth District Court of Appeal, “under (4)(b) a defect in a submitted claim has to be brought to the provider’s attention by the insurer so it can be rectified.” Fla. Med. & Injury Ctr., Inc. v. Progressive Express Ins. Co., 29 So. 3d 329 (Fla. 5th DCA 2010) [35 Fla. L. Weekly D215b]. “If the insurer fails to specify the defect in the form so that it can be rectified as contemplated by section (4), it will be deemed to have waived its objection to payment.” Id.
15. Insurers communicate with medical providers primarily through explanations of benefits. The explanation of benefits in this matter gives no indication that the insurer found the services, unrelated, unnecessary or the amount charged as unreasonable. To the contrary, the Defendant made a determination that the Plaintiff’s bill was compensable and processed the bill in full by applying it to the deductible. Accordingly, “such a loss, by definition, will not be later challengeable.” United Auto. Ins. Co. v. A 1st Choice Healthcare Systems, 21 So. 3d 124 at 127 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D2268a].
16. The Florida Rules of Civil Procedure articulate a broad scope for discovery. Specifically, Rule 1.280(b)(1) states that “[p]arties may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter of the pending action, whether it relates to the claim or defense of the party seeking discovery or the claim or defense of any other party, including the existence, description, nature, custody, condition, and location of any books documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not grounds for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.” Id.
17. Courts are required to follow and interpret this rule as it applies to each case’s specific facts. As noted by the Supreme Court “we do not believe that a litigant is entitled carte blanche to irrelevant discovery.” Allstate Ins. Co. v. Langston, 655 So. 2d 91 at 95 (Fla. 1995) [20 Fla. L. Weekly S217a]. The Court went on to quash the district court decision “to the extent that it permits discovery even when it has been affirmatively established that such discovery is neither relevant nor will lead to the discovery of relevant information.” Id.
18. In the past, it has been argued that the obligation of the Plaintiff in a PIP suit is to prove by a preponderance of the evidence that the medical bills at issue were reasonable in amount, related and medically necessary.
19. This argument is supported by case law stating that “in a lawsuit seeking benefits under the statute, both reasonableness and necessity are essential elements of a plaintiff’s case.” Derius v. Allstate Indem. Ins. Co., 723 So. 2d 271 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D1383a].
20. Defendant argues that Derius applies to the instant case. This Court disagrees based upon the factual distinctions in the Derius case and the current applicable version of the PIP statute.
21. The Derius court was interpreting the plain language of the 1994 version of the PIP statute. Derius involved a jury trial on dates of service denied by the insurer based on an Independent Medical Examination. The case at hand involves a case where Defendant allowed Plaintiff’s submitted medical bill in full, applied that bill to the policy deductible and made no mention that services were unrelated or unnecessary when the Defendant processed the bill.
22. Currently there are no facts to suggest that Defendant finds the services unrelated or unnecessary. More specifically, an insurer must have “reasonable proof” to argue merits such as relatedness or medical necessity and such “reasonable proof” has not been opined by the Defendant in this matter.
23. Additionally, the relatedness and/or medical necessity of the services are immaterial given the Defendant’s handling of this claim (by allowing the bill in full and applying the bill in full to the policy deductible). See generally, Glenn V. Quintana, D.C., P.A. a/a/o Melissa Evans v. State Farm Mutual Automobile Ins. Co., 19 Fla. L. Weekly Supp. 882a (Fla. 11th Jud. Cir. Miami-Dade Co. 2012); United Automobile Insurance Co. v. Riverside Medical Associates, Inc. a/a/o Normandel Burke, 20 Fla. L. Weekly Supp. 389a (Fla. 17th Jud. Cir. Appellate 2012); United Auto. Ins. Co. v. A 1st Choice Healthcare Systems, 21 So. 3d 124 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D2268a] and General Star Indemn. Co. v. West Florida Village Inn, Inc., 874 So. 2d 26 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D348a]. 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.
24. Defendant never placed the medical provider on notice of its contention that services were not medically necessary or related to the accident nor was notice given that the charge submitted was unreasonable. Defendant has failed to show any “reasonable proof” that this medical bill is unrelated, unnecessary or unreasonable in amount. Defendant’s explanation of benefits allows the charge in full and applies the bill to the deductible. If this Court were to allow the Defendant to materially change its position after litigation commenced, without some showing of “reasonable proof,” would run counter to the swift and automatic payment principle of PIP coverage as espoused by the Legislature.
25. This Court finds that based on Defendant’s actions of processing the bill at issue and applying the full amount to the deductible renders any inquiry into whether the claim was unrelated, was not medically necessary, or the charge was unreasonable is irrelevant under the facts of this case.
It is therefore ORDERED AND ADJUDGED that:
A. Plaintiff’s Motion for Protective Order is hereby GRANTED;
B. Plaintiff’s Motion to Compel the Deposition of Defendant’s Corporate Representative is hereby GRANTED. The parties shall coordinate the deposition within thirty (30) days and said deposition shall occur no more than 120 days from the date of this Order;
C. Defendant’s Motion to Compel Deposition Dates is hereby DENIED; and
D. Defendant’s Motion to Compel Verified Answers to First Interrogatories to Plaintiff is hereby MOOT, as Plaintiff provided verified responses prior to the hearing.
