23 Fla. L. Weekly Supp. 891a
Online Reference: FLWSUPP 2309GARRInsurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Where medical provider submitted bill, without claim number, within 35 days of MRI, and insurer did not exercise due diligence to connect bill with insured’s claim, lack of diligence by insurer did not render bill untimely — Bill was rendered complete when provider submitted demand letter with correct claim number and became overdue when not paid within 30 days of receipt of letter — Where benefits were not exhausted until 10 months after bill became overdue, trial court correctly entered judgment in provider’s favor
GARRISON PROPERTY AND CASUALTY INSURANCE COMPANY, Appellant, vs. NEW SMYRNA IMAGING, LLC, et al., Appellee. Circuit Court, 7th Judicial Circuit (Appellate) in and for Volusia County. Case No. 2014-10024-APCC. L.T. Case No. 2011-20853-CONS. September 4, 2015. Counsel: Kimberly P. Simoes, Simoes Law Group, P.A., Deland, for Appellee.
[Lower court order published at 22 Fla. L. Weekly Supp. 365a.]OPINION
This is an appeal from the trial court’s Order requiring payment of PIP benefits. The payments in question relate to the cost of an MRI performed by the Appellee, New Smyrna Imaging, LLC. (“NSI”). Appellant, Garrison Property & Casualty Insurance Company, claims that it exhausted the PIP benefits under its insurance policy before the bill for the MRI was due and, therefore, does not owe NSI for the services.
The facts are largely undisputed. Garrison issued an insurance policy containing PIP coverage to its insured, Chiemi Miles. When Ms. Miles was injured on June 29, 2010 in an automobile accident, she made claim under the PIP coverage of her policy for payment of her medical bills. As early as July 2, 2010, Garrison opened a claim file for PIP benefits and assigned an adjuster.
On August 19, 2010, NSI conducted an MRI of Ms. Miles’ lumbar spine. They sent the bill to “USAA PIP” on August 24, 2010.1 The bill contained the insured’s name, date of birth, address, and phone number, along with NSI’s name, physical address, billing address, the signature of its physician, the physician’s license number, a diagnostic code, a proper CPT code, the amount charged associated with each of the 3 submitted CPT codes and a unique identification number provided to NSI by the patient/insured. There is no dispute that NSI billed for the service within 35 days of the date that the MRI was performed. Further, at the time the insurer received the bill, it knew from other bills that Ms. Miles was receiving medical treatment for injuries from the motor vehicle accident.
The bill was forwarded by the insurer to its third-party vendor, Auto Injury Solutions (“AIS”). AIS contended that it was unable to process the bill because it could not locate a claim in its system that matched the information provided on the bill. Although AIS did not formally deny the claim, it sent NSI an unsigned, undated written notice that AIS could not match the bill in question to a specific claim number and requested that the bill be re-submitted with additional information. This notice suggested nine areas of information that a medical provider could give AIS in order to assist them in locating and processing the insured’s claim. These areas of information included the patient’s name, address and date of birth, a claim number, date of loss, name of provider, diagnostic code and a CPT code.2
When payment was not made in 30 days, NSI sent the insurer a Notice of Intent to Initiate Litigation, as required by statute. This Notice again contained the insured’s name, the unique identification number provided to NSI by the patient/insured, along with NSI’s name, date of service, diagnostic code, CPT code, the amount charged and a copy of the Assignment of Benefits signed by the insured. Although this Notice contained less information than the original bill, this time the insurer located the claim. But the insurer deemed the claim untimely, requesting NSI to prove that its original bill was submitted within 35 days of the date of service. Importantly, the insurer’s claim number was referenced in its response to the Notice of Intent.
On December 9, 2010, in a third attempt to get paid, NSI sent a “corrected” bill. The corrected bill contained the same information as the original bill but added the claim number. The insurer denied payment, stating in its Explanation of Reimbursement that the only reason for the denial was that “medical bills not submitted within 35 days of the date of service are not reimbursable.”
On February 28, 2011, in a fourth and final attempt to get paid, NSI sent a second Notice of Intent to Initiate Litigation containing the same information and claim number. The insurer again denied payment explaining that the corrected bill was not submitted within 35 days of the MRI and the second Notice did not include proof of the date of mailing of the original bill.
NSI filed suit and the insurer filed its Answer in June, 2011. Although the insurer pled exhaustion of benefits as an affirmative defense, the benefits were not exhausted until August, 2011.
Under the PIP statute, Section 627.736, Fla. Stat. (2010) an insurer must pay PIP benefits within 30 days of receipt of a bill unless the insurer determines that the bills are unreasonable, unrelated to the accident or are not medically necessary. The insurer has an affirmative obligation to investigate, authenticate and pay the claim within 30 days. Allstate Ins. Co. v. Holy Cross Hospital, 961 So.2d 328 (Fla. 2007) [32 Fla. L. Weekly S453a]. Although incomplete or erroneous information makes verification of a claim more difficult, the statutory burden remains with the insurer to make a decision on coverage within 30 days. Palmer v. Fortune Ins. Co., 776 So.2d 1019 (Fla 5th DCA 2001) [26 Fla. L. Weekly D278a]. Further, it is the insurer’s responsibility to contact the insured to obtain any additional information needed to process the claim. Superior Ins. Co. v. Libert, 776 So.2d 360 (Fla. 5th DCA 2001) [26 Fla. L. Weekly D381a].
But, an insurer may challenge a claim for medical treatment that is not reasonable, necessary or related to an accident. Simon v. Progressive Express Ins. Co., 904 So.2d. (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]. Of course, the insurer must always act reasonably towards its insured and may only delay or deny payment of a bill upon “reasonable proof” to support its decision. See, 727.736 (4)(b). But if an insurer has reasonable proof to deny a benefit to one provider, it may process and pay legitimate bills from other providers, even if received later. The bill reasonably denied is not “overdue” until the provider supplies the necessary information or verification. United Auto Ins. Co. v. Rodriguez, 808 So.2d 82 (Fla. 2001) [26 Fla. L. Weekly S747a]. What is more, the insurer is entitled to continue to pay all legitimate claims, even if it exhausts the benefits available under the policy. Simon, supra. The insurer is not required to “reserve” funds to pay a properly rejected or reduced claim and exhausting the benefit by proper payment to other, even later, providers is a complete defense. Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So.2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a].
There is an exception to the exhaustion of benefits defense, however, where the insurer denies payment based on “bad faith or wrongdoing”. Progressive American Ins. Co. at 7. The insurer claims that the issue of the insurer’s bad faith was never pled or litigated in this case and in that they are partially correct. No statutory bad faith claims were filed by NSI in this case.3 But, a formal bad faith claim is not necessary to trigger the exception to the exhaustion of benefits defense. “Bad faith” in this context occurs when the insurer denies payment without reasonable proof to establish that it is not responsible for the payment. So, the issue for this court is whether the insurer denied payment of NSI’s claim without reasonable proof.
In the present case, the PIP insurer based its denial solely on the issue of whether the bill was submitted within 35 days of the service. So the operative question is whether the insurer had reasonable proof that the bill was untimely at the time of the denial. The trial court found that the insurer did not have reasonable proof to support its denial and we affirm that decision for 2 reasons. First, the insurer actually received and forwarded the original bill to AIS, even before it associated the bill with the insured’s other pending claims. This occurred around August 24, clearly within 30 days of the MRI on August 19. Although the bill on a Health Insurance Claim Form #1500 did not contain the date of the accident or a claim number, the insurer could have easily located the insured’s claim by use of the insured’s name and date of birth. They simply didn’t. But their failure to use reasonable diligence to connect the bill with the claim does not render an otherwise timely bill untimely.
Second, even if the original bill was not sufficiently complete to permit payment when received, the bill was rendered complete on October 8, 2010 when the Notice of Intent was filed containing the correct claim number. The original bill timely tolled the filing deadline and the insurer had 30 days to pay after receipt of sufficient information to support payment. That additional information came on October 18 with receipt of the Notice of Intent. Accordingly, the insurer had 30 days from receipt of the notice on October 18 in which to pay the bill. The insurer’s failure to pay that bill within 30 days rendered that bill “overdue”. Once overdue, the insurer had an obligation to pay the bill as long as benefits were not exhausted at that time. Here, the benefits weren’t exhausted until almost 10 months later, after the insurer had been sued and filed its Answer in this case. Therefore, the trial court correctly found that PIP benefits were due to NSI and entered judgment in NSI’s favor.
For the reasons stated, the Summary Final Judgment entered by the Trial Court is hereby Affirmed.
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1Appellant is a subsidiary of USAA Casualty Insurance Company.
2The trial court found that NSI’s original bill actually provided 7 out of the 9 areas of information suggested by AIS. The trial court also found that AIS never communicated with the insurer about timely receiving the bill or with the adjuster about the status of paying the bill.
3An insured has a direct statutory action against the insurer under 624.155, Fla. Stat. (2010). However, nothing in the record reflects that the insured intended to pursue such claims or assigned such claims to the provider.
