23 Fla. L. Weekly Supp. 262a
Online Reference: FLWSUPP 2303BARRInsurance — Personal injury protection — Discovery — Where insurer unilaterally, albeit improperly, elected to use permissive statutory fee schedule to calculate reimbursement rate, reasonableness of charges is not at issue — Medical provider may depose insurer’s corporate representative on facts supporting affirmative defenses, explanation of review, receipt of bills and demand letters and responses thereto, payment of CPT codes at issue, PIP policy and processing of provider’s bills
FLORIDA HOSPITAL MEDICAL CENTER, as assignee of Fabiola Barrick, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2014-SC-1578-O. June 5, 2015. Steve Jewett, Judge. Counsel: David B. Alexander, Orlando, for Plaintiff. David M. Gagnon, Jacksonville, for Defendant.
ORDER ON MAY 27, 2015 HEARING
THIS MATTER having come before this Honorable Court on Plaintiff’s Motion to Compel the Deposition of Defendant’s Corporate Representative Pursuant to Fla. R. Civ. P. 1.310(b)(6) and this Honorable Court having being otherwise fully advised in the premises, it is hereby,
ORDERED AND ADJUDGED that:
1. The Plaintiff, a hospital facility, submitted its medical bill for date of service 8/22/2009 seeking reimbursement from Defendant for the Personal Injury Protection benefits and Medical Payments benefits under the subject policy. Defendant’s Explanation of Review limits the reimbursement to 75% of the Plaintiff’s charges. Defendant’s Explanation of Review provides explanation codes “381”, which provides the following explanation for the limited reimbursement: “[t]he allowable amount has 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.” This explanation matches the schedule of maximum charges pursuant to Fla. Stat. §627.736(5)(a)2.b. (2009).
2. This Court relies on the opinion rendered by the Florida Supreme Court in Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a].
3. In determining whether a charge for a particular service or treatment is reasonable, there are two (2) methods by which an insurer may calculate reimbursement methods: 1) is the fact dependent method under Fla. Stat. §627.736(5)(a)1. (2009) and 2) is the statute dependent method, otherwise known as the permissive schedule of maximum charges under Fla. Stat. §627.736(5)a.2. (2009). These methods have been described as separate and distinct methods for evaluating the statute’s reasonable expense coverage mandate under Fla. Stat. §627.736(1)(a). The insurer must choose the one payment methodology it will utilize for reimbursement and cannot alternate between the two methods.
4. If the methodologies are separate and distinct, then it is impossible that any of the schedule of maximum charges under (5)(a)2. could be used in a (5)(a)1. inquiry. In Virtual Imaging, supra, the Supreme Court held that the insurer had to elect clearly and unambiguously, within its policy, which section it would utilize to reimburse for medical expenses; (5)(a)1. or (5)(a)2.
5. The purpose of (5)(a)2. was to reduce costs and eliminate litigation regarding reasonableness of charge. In other words, since Defendant did not rely upon the remaining factors within its policy of insurance when processing the Plaintiff’s bill, it cannot now fall back upon the fact dependent inquiry to determine reasonableness of the charge. Defendant unilaterally determined “reasonableness” when it calculated reimbursement according to the schedule of maximum charges (i.e. 75% of the hospital’s usual and customary charge). 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. As previously noted, the legislative intent behind enacting the schedule of maximum charges was “designed to reduce costs and eliminate litigation regarding what is a ‘reasonable’ charge.” Florida Senate, “Bill Analysis and Fiscal Impact Statement” CS/SB 40-C, Oct. 4, 2007, page 18.
6. This Court is mindful of the language set forth in Fla. Stat. §627.736(4)(b), initially enacted in 2001, which states:
This paragraph does not preclude or limit the ability of the insurer to assert that the claim was unrelated, was not medically necessary, or was unreasonable or that the amount of the charge was in excess of that permitted under, or in violation of, subsection (5). Such assertion may be made at any time, including after payment of the claim or after the 30-day period for payment set forth in this paragraph.
7. The schedule of maximum charges was not added to the PIP statute until 2008. It is logical to conclude that 4(b) was and remains applicable to claims that are processed using the fact dependent reasonableness methodology of Fla. Stat. §627.736(5)(a)1. It is not logical to apply 4(b) in the context of the present case, where Defendant admittedly utilized, albeit improperly, the Schedule of Maximum Charges, which legislative history tells us was designed to eliminate reasonableness litigation altogether. Therefore, once an insurer has limited reimbursement pursuant to the statute’s schedule of maximum charges (Fla. Stat. §627.736(5)a.2. (2009)), which Defendant has done in this matter, the question to be determined is whether its policy of insurance provides sufficient notice to its insured.
8. The Court finds that the reasonableness of Plaintiff’s charge is not at issue in this matter. Further, the Court finds that the statute’s reasonable expense mandate under Fla. Stat. §627.736(1)(a) has been satisfied in this matter via Plaintiff’s billed amount. In turn, discovery as to the reasonableness of Plaintiff’s charge is irrelevant, immaterial, and not reasonably calculated to lead to admissible evidence considering the legal issue before this Court (i.e., whether the policy of insurance provides sufficient notice to its insured). See Allstate Insurance Company v. Langston, 655 So. 2d 91 (Fla. 1995) [20 Fla. L. Weekly S217a] (discovery in a civil case must be relevant to the subject matter of the case and it must be admissible or reasonably calculated to lead to admissible evidence).
9. Plaintiff’s Motion to Compel the Deposition of Defendant’s Corporate Representative Pursuant to Fla. R. Civ. P. 1.310(b)(6) is GRANTED. The deposition of Defendant’s Corporate Representative shall be coordinated within thirty (30) days from the date of this Order and shall occur within a reasonable time from the date of this Order. The Fla. R. Civ. P. 1.310(b)(6) scope of inquiry for the deposition of Defendant’s Corporate Representative will be as follows:
“Facts supporting Defendant’s affirmative defenses, Explanations of Review, receipt of bills and responses thereto, receipt of pre-suit demand(s) and response(s) thereto, payment of the CPT code(s) at issue in Plaintiff’s Complaint, the applicable policy of insurance and processing of Plaintiff’s bill(s) at issue.”
