23 Fla. L. Weekly Supp. 191a
Online Reference: FLWSUPP 2302SKIDInsurance — Personal injury protection — Coverage — Medical expenses — Deductible — Standing — Medical provider has standing to challenge manner in which insurer calculated and applied deductible — PIP policy providing that insurer will pay 80% of reasonable expenses does not provide clear and unambiguous notice of intent to limit reimbursement to permissive statutory fee schedule — Because insurer’s usage of permissive fee schedule to reduce provider’s charges was impermissible, question of whether deductible should be applied before or after making fee schedule adjustments is moot
EMERGENCY PHYSICIANS OF CENTRAL FLORIDA, LLP, as assignee of Christopher Skidmore, Plaintiff, vs. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 18th Judicial Circuit in and for Brevard County. Case No. 05-2011-SC-009037-XX. May 12, 2015. Honorable Benjamin B. Garagozlo, Judge. Counsel: Robert Bartels and Wendelyn L. Gowen, Bradford Cederberg, P.A., Orlando, for Plaintiff. Henry Ramos, Insurance Defense Firm, Orlando, for Defendant.
ORDER
THIS CAUSE, having come before the Court for a hearing pursuant to Plaintiff’s motion for Final Summary Judgment along with Defendant’s motion for summary judgment and motion for protective order1. The Court having reviewed the pleadings, heard argument of counsel, and being otherwise fully advised in the premise, the Court finds as follows:
PRELIMINARY STATEMENT
This is a breach of contract action with the amount in controversy being less than $500.00. Emergency Physicians of Central Florida, LLP (hereinafter may also be referred to as “Plaintiff”), as assignee of the insured — Christopher Skidmore has brought this lawsuit claiming that Progressive American Insurance Company (hereinafter may also be referred to as the “Defendant” or “Insurer”) breached the automobile insurance policy at bar when Defendant elected to utilize the permissive fee schedule in calculating the Personal Injury Protection “PIP” coverage reimbursements herein.FINDINGS OF FACT
1. On February 10, 2011, Christopher Skidmore, sustained injuries due to a motor vehicle accident.
2. At the time of the accident, Christopher Skidmore was covered under an automobile insurance policy issued by Progressive American Insurance Company. Said policy provided $10,000.00 in “PIP” coverage with a $1000.00 deductible.
3. Christopher Skidmore received medical treatment from several medical providers, including medical care rendered by Emergency Physicians of Central Florida, LLP — the named Plaintiff.
4. The controversy herein revolves around three (3) separate medical bills from Mr. Skidmore’s medical providers, namely: Indian River Memorial Hospital Inc. (hereinafter referred to as the “Hospital”); Vero Orthopaedics II P.A.; and Emergency Physicians of Central Florida LLP.
5. On February 24, 2011, the Defendant received the first medical bill from the Hospital in the amount of $805.00.
6. Defendant reduced this medical charge from $805.00 to $603.75 explaining that “[t]he allowable amount [had] been calculated pursuant to Florida Statute 627.736(5) (2008) which limits reimbursement to 75% of the hospital’s usual and customary charges for emergency services”. See: Defendant’s Explanation of Benefits letter (hereinafter referred to as “E.O.B.”); See also: Deposition of Defendant’s Corporate Representative — Christina Barrow, pages 43-44.
7. The reduced amount was then applied to the insured’s $1000.00 deductible, whereby making the insured’s remaining deductible $396.25 as opposed to $195.00.
8. The second medical bill received was from Vero Orthopaedics II P.A. in the amount of $190.00. This sum was allowed in full and was applied to the insured’s remaining deductible balance of $396.25, leaving an adjusted remaining deductible of $206.25.
9. On March 18, 2011, Defendant received the third bill in the amount of $531.00 for medical services rendered by Emergency Physicians of Central Florida, LLP. This medical bill was allowed in full and applied to the insured’s remaining deductible balance of $206.25. Defendant paid the remainder at 80% or $259.80 in lieu of paying the Plaintiff the sum of $420.80.
10. In the event Defendant had applied 100% of the first two medical bills to the insured’s $1000.00 deductible, the insured’s remaining deductible would have been $5.00 — meaning the $5.00 deductible would have been applied to the Plaintiff’s bill whereby reducing the bill from $531.00 to $526.00 with the Plaintiff being entitled to 80% of said sum, to-wit: $420.80 as opposed to the sum of $259.80 actually paid (a difference of $161.00).
11. On April 18, 2011, the Plaintiff sent Defendant a “Notice of Intent to Initiate Litigation” demanding payment in full2.
ISSUES
12. For reasons set forth infra, the Court will limit the analysis to whether the insurer could utilize the permissive fee schedule as set out under section 627.736 of Florida Statutes in order to reduce medical bills when the automobile policy does not incorporate the use of the permissive fee schedule nor contain sufficient language placing insured on notice of insurer’s election to use the permissive fee schedule.
ANALYSIS AND CONCLUSIONS OF LAW
13. At the hearing, parties acknowledged that the automobile insurance policy at bar did not incorporate the “permissive fee” schedule in order to calculate or limit the reimbursements of medical bills by the insurer.
14. Plaintiff therefore contends Defendant was precluded as a matter of law from utilizing the permissive fee schedule when processing medical bills and then applying the reduced sum to the deductible.
15. At the hearing Defendant argued that Plaintiff’s motion for summary judgment should be summarily denied since a factual dispute exits regarding the reasonableness of the Hospital’s bill. Defendant asserts that when sections 627.736 and 627.739(2) are read together the only conclusion one may reach is that a “PIP” deductible applies to 100% of the reasonable, necessary and related medical expenses and losses. Only reasonable, medically necessary, and related medical bills are deemed compensable, and could then be applied to the insured’s deductible.
16. With due respect, this issue of the “reasonableness or unreasonableness ” of the medical charges was not properly raised as a ground in the Defendant’s motion for summary judgment or even as part of the Defendant’s affirmative defenses3.
17. Defendant’s motion for summary judgment merely asserts Plaintiff’s lack of standing to pursue this action — pointing out that since the Plaintiff’s bill had been accepted and paid at the billable amount sought, the Plaintiff has not incurred any damages.
18. This Court concurs with the rationale in the case of Emergency Physicians of Central Florida v. Progressive Ins. Co., 20 Fla. L. Weekly Supp. 689a (Orange Cty. Ct. Jan. 30, 2013), and as such concludes that Plaintiff does have standing to challenge the manner in which the Defendant has calculated the deductible. Standing to sue requires one to have “. . . a sufficient interest at stake in the controversy which will be affected by the outcome of litigation”. See: Wheeler v. Powers, 972 So. 2d 285 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D262b]; citing: Gieger v. Sun First Nat’l Bank of Orlando, 427 So.2d 815, 817 (Fla. 5th DCA 1983).
19. Moreover, it is well settled that “[a] motion for summary judgment must state with particularity the grounds upon which it is based and the substantial matters of law to be argued and must specifically identify any affidavits, answers to interrogatories, admissions, depositions, and all other materials as would be admissible in evidence on which the movant relies”. See: Rule 1.510 (c) Fla. R. Civ. P.
20. Assuming arguendo, the issue of reasonableness of the medical bills had been stated with particularity in the Defendant’s motion for summary judgment or as part of the affirmative defenses, Defendant failed to object to the bill as unreasonable. Defendant simply elected to reduce the Hospital’s bill using the permissive fee schedule — as evidenced by the “E.O.B.”. Furthermore, nothing contained in Defendant’s response to Plaintiff’s pre-suit demand nor the affidavit of litigation specialist – Ronald Anderson indicated that the charges were unreasonable.
21. The “E.O.B.” at hand reflected a reduction of the Hospital’s bill “. . .pursuant to Florida Statute 627.736(5) (2008) which limits reimbursement to 75% of the hospital’s usual and customary charges for emergency services”. There was no mention that the reduction of the Hospital’s charges was due to said charges being unreasonable or not compensable.
22. Surely, by applying the permissive fee schedule pursuant to section 627.736(5) of the Florida Statutes, Defendant had determined the Hospital’s charges to be reasonable.
23. In Florida, one of two (2) distinct methodologies may be used in determining whether a medical expense is “reasonable” for purposes of reimbursements by the insurer, namely: i) a fact-dependent methodology in which one would consider the service provider’s ‘usual and customary charges’, ‘specific reimbursement levels in the community’, along with other relevant factors; or ii) pursuant to Legislation passed in 2008 whereby reimbursements for medical services could be limited through the use of fee schedules as identified in section 627.736(5)(a)(2) of the Florida Statutes. See: Geico Gen. Ins. Co. v. Virtual Imaging Servs. Inc., 141 So.3d 147, 155-58 (Fla.2013) [38 Fla. L. Weekly S517a]; see also: Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63, 67-68 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]; rev. denied, 86 So.3d 111 (Fla. 2012); see also: DCI MRI, Inc. v. Geico Indem. Co., 79 So.3d 840 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D170e], rev. denied, 136 So.3d 1019 (Fla. 2014).
24. In order to utilize the fee schedules methodology, the automobile insurance policy should contain sufficient unambiguous language placing the insured on notice of the insured’s intention to reduce the reimbursements using the fee schedules as identified under section 627.736(5)(a)(2).
25. An examination of the insurance policy at bar reveals that the policy does not incorporate the permissive fee schedule nor contain language informing the insured as to insurer’s intent to utilize such permissive fee schedule. The policy states ‘PIP’ coverage benefits consist of medical benefits which is defined to mean “. . . 80% of all reasonable expenses incurred for medically necessary medical, surgical, x-ray, dental and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing services”. See: Part II (A) of the insurance policy at bar.
26. Therefore, the Defendant obvious use of the permissive fee schedule to limit and reduce the Hospital’s bill was improper.
27. Simply put, the insurer’s usage of the permissive fee schedule in order to reduce the Hospital’s charges was therefore in breach of the insurance policy, and as such the question of whether the deductible should be applied before or after the fee schedule adjustments is now moot4. Whereupon it is hereby;
ORDERED AND ADJUDGED that;
28. Defendant’s motion for summary judgment is respectfully denied.
29. Defendant’s motion for a protective Order is also respectfully denied. It is further;
ORDERED AND ADJUDGED that;
30. Plaintiff’s motion for summary judgment is hereby granted.
31. A Final Judgment is hereby entered in favor of the Plaintiff, Emergency Physicians of Central Florida, LLP — as assignee of Christopher Skidmore and against the Defendant, Progressive American Insurance Company, for the sum of $161.00, along with the pre-judgment interest in the amount of $39.01, for a total sum of $200.01, all of which shall accrue interest at statutory rate, for which sum let execution issue.
32. The Court finds Plaintiff is entitled to reasonable attorney’s fees and costs, and reserves jurisdiction to determine the amount of attorney’s fees and costs.
__________________
1The Court must pause in order to convey this Court’s appreciation to the parties’ respective counsel for the level of advocacy skills and professionalism displayed at the hearing.
2Christopher Skidmore had assigned his “PIP” benefits to Emergency Physicians of Central Florida, LLP, with the insurer having acknowledged and accepted said assignment.
3Although Defendant alluded to the unreasonableness of the medical bills, the affirmative defenses in this regard were legally insufficient since they were not pled with specificity. See: Defendant’s affirmative defenses 2, 3, & 8 in particular.
4Several county courts have held that the deductible must be applied before the application of any fee limitation or adjustment: See: Flagler Hospital (Devin Sapp) v. Peak Insurance, 18 Fla. L. Weekly Supp. 597a (Fla. St. Johns Cty. Ct. April 7, 2011); See also: Flagler Hospital (Jody Rigdon) v. Progressive, 18 Fla. L. Weekly Supp. 620c (Fla. St. Johns Cty. Ct. April 14, 2011); see also: New Smyrna Imaging (Megan McClanahan) v. Garrison Insurance, 20 Fla. L. Weekly Supp. 77a (Fla. Seminole Cty. Ct. October 10, 2012) [On appeal, the Circuit Court reversed and remanded (appeal number 13-03-AP)[18th Cir. Ct. January 12, 2015].
