23 Fla. L. Weekly Supp. 374b
Online Reference: FLWSUPP 2304VALCInsurance — Personal injury protection — Discovery — Depositions — Insurer’s admission and representation that its payment of MRI charges in accordance with permissive statutory fee schedule was pursuant to its PIP policy constituted admission that services were related and medically necessary — Insurer may not depose insured and treating physician on those issues
PAN AM DIAGNOSTIC SERVICES, INC., D/B/A, PAN AM DIAGNOSTIC OF ORLANDO, (Junior Valceus), Plaintiff(s), vs. STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Defendant(s). County Court, 17th Judicial Circuit in and for Broward County. Case NO. COCE 13-08309 (50). June 10, 2015. Peter B. Skolnik, Judge. Counsel: Amir Fleischer, Marks & Fleischer, P.A., Fort Lauderdale, for Plaintiff. Marvin Comick, Roig Lawyers, Deerfield Beach, for Defendant.
SUPPLEMENTAL ORDER GRANTING PLAINTIFF’SMOTION FOR PROTECTIVE ORDER REGARDINGDEPOSITION OF THE CLAIMANT, ANDTHE CLAIMANT’S TREATING PHYSICIAN
THIS CAUSE having come before the Court on June 8, 2015 for hearing on the Plaintiff’s Motion for Protective Order regarding depositions and the Court having heard the argument of counsel and being otherwise fully advised in the premises, makes the following findings and determinations:
1. Plaintiff provided diagnostic services to Junior Valceus as a result of his July 30, 2009 motor vehicle accident.
2. The Plaintiff billed a total amount of $2,150 for each of 2 MRI scans it provided on October 1, 2009.
3. Defendant allowed both services billed by the Plaintiff but reduced the amount allowed based on the 200% of Medicare fee schedule Fla. Stat 627.736(5)(a)(2).
4. Defendant’s policy did not specify that reimbursement for covered services would be limited to the 2008 medicare fee schedule. Instead it promised to reimburse all reasonable medical expenses tracking the language of Fla. Stat 627.736(5)(a)1.
5. Defendant’s policy also provided that it would only cover, and pay for, services that were medically necessary and which arose from injuries caused by the operation maintenance or use of a motor vehicle. Moreover, it provided that it would not pay for any service that the No Fault Act did not require it to pay.
6. The language in Defendant’s policy describing the medical services it would cover was identical to the scope of medical services covered by the Florida No Fault Statute i.e. medically necessary and related services.
7. Plaintiff filed suit and asserts that its charges are reasonable and seeks to recover the difference between what State Farm paid and its total charges.
8. Plaintiff propounded a Request for Admissions on the Defendant which was responded to on September 19, 2013. Defendant responded to Plaintiff’s Request for Admissions as follows:
Admissions #6: “The payment previously paid to PAN AM DIAGNOSTIC SERVICES, INC., D/B/A, PAN AM DIAGNOSTIC OF ORLANDO represented reimbursement of medical services that were medically necessary and related to the motor vehicle accident at issue.”
Answer: “Admitted, subject to the terms and conditions of said policy and Florida law.”
Admissions #28: Defendant does not have any evidence to dispute that the services previously paid arose from the operation maintenance or use of a motor vehicle.”
Answer: “Admitted”
9. Defendant did not assert that the previous payment was paid by mistake or error, nor did it assert that the previous payment was the result of fraud, misrepresentation or the result of any misinformation or improper conduct of the Plaintiff.
10. The Defendant noticed the deposition of the referring physician to take place on June 18, 2015 and noticed the deposition of the patient to take place on June 22, 2015 which resulted in Plaintiff filing the current motion.
11. Plaintiff objects to the taking of the deposition of the Claimant, and the Claimant’s treating physician, as immaterial, irrelevant and not reasonably calculated to lead to admissible evidence.
12. Almost 2 years after filing suit and less than a month away from discovery cut-off, Defendants now wants to contradict its precious admissions and argue that previous payment of the subject MRI scans, was not related or necessary.
13. As an additional alternative, Defendant argues that its answer to Plaintiff’s Request for Admissions #6 is a qualified answer — “Admitted, subject to the terms and conditions of said policy and Florida law,” and thus, not a conclusive admission.
14. Defendant has not sought leave of court to amend its Responses to Admissions nor has it sought to Amend its Answer to assert that the prior payment was the result of mistake, fraud or misrepresentation.1
15. Plaintiff argues that the Defendant’s Response to Plaintiff’s Request for Admission #6 represented Defendant’s admission that the services were medically necessary and related. Essentially, Plaintiff argues that by admitting and asserting that its payment was made pursuant to the terms of the policy of insurance now precludes the Defendant from arguing that the service was not medically necessary or related. See Pam Am Diagnostic Services, Inc., d/b/a Wide Open MRI (Giji Kurian) v. State Farm Mutual Auto Ins. Co. Case No 12-21929 COCE (53) (Judge Robert W. Lee) (Broward Cty. Ct. 2014) (“Defendant’s position that they can contest medical necessity and relatedness at anytime is clearly inapplicable in the instant case. Once there is a judgment or a judicial determination is made, a defendant cannot raise something that was ruled on. Here, Defendant’s admission and representation that its payment was pursuant to its policy of insurance represents a confession that the services was medically necessary and related. This confession is equivalent to a judicial determination on medical necessity and relatedness and thus Defendant is barred from now raising it.”)
16. Defendant argues that Fla. Stat. 627.736(4)(b) permits it to conduct discovery on the medical necessity or relatedness of a service it concedes was properly paid without asserting that its prior payment should be returned or discredited as having been the result of some mistake, error, misrepresentation or other impropriety.
17. For the foregoing reasons the Court agrees with the Plaintiff’s position and disagrees with Defendant’s position.
LEGAL DISCUSSION
18. Defendant’s payment and admission that the service was medically necessary and related and that payment was made pursuant to its policy of insurance represents a determination by Defendant that Plaintiff’s services were “covered services”. Pursuant to both the Defendant’s policy and the Florida No Fault statute, only charges for medically necessary and related treatment are covered medical expenses. Defendant’s policy of insurance states in relevant part the following:2
What We Pay
Medical Expenses. 80% of all reasonable expenses incurred for:
a.
medically necessary medical, surgical, x-ray, dental, ambulance, hospital, professional nursing and rehabilitative services, eyeglasses, hearing aids and prosthetic devices; and
b.
necessary remedial treatment and services recognized and permitted under the laws of the state for an injured person who relies upon spiritual means through prayer alone for healing, in accordance with his religious beliefs.
Florida Statute §627.736 states in relevant part the following:
(l) REQUIRED BENEFITS. — An insurance policy complying with the security requirements of s. 627.733 must provide personal injury protection to the named insured, relatives residing in the same household, persons operating the insured motor vehicle, passengers in the motor vehicle, and other persons struck by the motor vehicle and suffering bodily injury while not an occupant of a self-propelled vehicle, subject to subsection (2) and paragraph (4)(e), to a limit of $10,000 in medical and disability benefits and $5,000 in death benefits resulting from bodily injury, sickness, disease, or death arising out of the ownership, maintenance, or use of a motor vehicle as follows:
(a) Medical benefits. — Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing. . .
19. Defendant’ policy goes further and specifically provides that it will not pay any services that the No Fault act does not require it to pay.3
We will not pay any charge that the No-Fault Act does not require us to pay, or the amount of any charge that exceeds the amount the No-Fault Act allows to be charged.
Thus by paying the service the Defendant is confessing the medical necessity and relatedness of the services.
20. A payment of policy benefits reduces the amount available for other covered services. Once the payment is applied to reduce the balance of benefits available for other covered services it represents a determination by Defendant that the services are related and necessary. Florida Emergency Physicians Kang & Associates M.D., P.A., a/a/o Kerry Tastinger v. Progressive Select Ins. Co. 21 Fla. L. Weekly Supp 798a (Judge Andrew L. Cameron) (Orange Cty. Court 2014) is persuasive on this issue. In Emergency Physicians a/a/o Kerry Tastinger, Progressive received Plaintiff’s bill and applied the full amount to reduce the policy deductible and paid the difference. The Plaintiff filed suit arguing that its charges should not have been applied to the deductible pursuant to Fla. Stat. 627.736(4)(c). Each party filed motions for Final Summary Judgment. The defendant objected to plaintiff’s motion claiming that the court could not enter a Final Summary Judgment because Plaintiff had not set forth any evidence that its services were reasonable necessary or related. In denying defendant’s motion and granting plaintiff’s the court held:
“First and foremost, Defendant’s explanation of benefits shows the charged amount of $650.00 for Plaintiff’s bill was allowed in full prior to application of the deductible and makes no mention of the Defendant challenging the reasonableness[or medical necessity or relatedness] of the Plaintiff’s charge. According, to General Star Indem. Co. v. West Florida Village Inn., Inc. “[t]he notion that a deductible could be applied to loss that is not covered by the policy is fundamentally unreasonable.” 874 So. 2d 26 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D1070b]. PIP benefits are to cover reasonable, related and medically necessary services and when Defendant applied the deductible (albeit improperly) to Plaintiff’s bill it made the determination that the charged amount was reasonable [related and necessary] . Additionally, during the deposition testimony of Defendant’s adjuster who handled the Plaintiff’s claim it was conceded, over Defendant’s objections, that at the time of the processing of Plaintiff’s claim the bill was for both related and necessary services in regard to the automobile accident of the patient/insured. See generally, Glenn V. Quintana, D.C., P.A. (a/a/o Melissa N. Evans) v. State Farm Mutual Automobile Insurance Company, 19 Fla. L. Weekly Supp. 882a (Fla. 11th Jud. Cir. Miami-Dade Co. July 11, 2012)
21. The Defendant’s prior payment reduced policy benefits, similar to the application of a bill to reduce a deductible. This represents Defendant’s determination that the services are related and necessary. Plaintiff is not therefore required to re prove the medical necessity and relatedness of services that Defendant has conceded in admissions and already paid4.
22. The Defendant’s pre suit payment should be viewed no differently than a payment after suit. Like the post suit payment, a pre suit payment represents an admission/confession that the services are related and necessary. Once suit is filed for the unpaid balance and the Defendant allows the previous payment to stand it is no different than a confession by payment after suit. See Pam Am Diagnostic Services, Inc., d/b/a Wide Open MRI (Giji Kurian) v. State Farm Mutual Auto Ins. Co. Case No 12-21929 COCE (53) (Judge Robert W. Lee) (Broward Cty. Ct. 2014). The admission and qualification that Defendant paid pursuant to its policy operates to relieve the Plaintiff from having to prove that the previously paid service was medically necessary. Thus in order to challenge the medical necessity of a previously paid service the burden is on the Defendant to assert a defense or counterclaim seeking a reversal of the prior payment and allege a legally cognizable basis for its change of position5.
23. Nevertheless, Defendant cites to Fla. Stat. 627.736(4)(b) as its basis to force the Plaintiff to re-prove the relatedness and necessity of a medical service it has already conceded and properly paid. The salient provisions of that section provides:
When an insurer pays only a portion of a claim or rejects a claim, the insurer shall provide at the time of the partial payment or rejection an itemized specification of each item that the insurer had reduced, omitted, or declined to pay and any information that the insurer desires the claimant to consider related to the medical necessity of the denied treatment or to explain the reasonableness of the reduced charge, provided that this shall not limit the introduction of evidence at trial. . .However, notwithstanding the fact that written notice has been furnished to the insurer, any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment. . .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 by the insurer may be made at any time, including after payment of the claim or after the 30-day time period for payment set forth in this paragraph.
24. Defendant misinterprets this provision by over reading the plain statutory language and further by suggesting an interpretation that leads to an absurd result. First, the operative language begins with the words “This paragraph does not preclude or limit the ability of the insurer to assert that the claim was not . . . . . . Such assertion may be made at any time including after payment of the claim” (Emphasis added)
25. “This paragraph” refers to the requirement that insurers provide an Explanation of Benefits.6 It simply means that the requirement to provide an explanation of benefits does not preclude or limit the ability of the insurer to assert that the claim was not reasonable, necessary or related. To say that something is not “precluded” is not the same as saying something is “authorized”. Nevertheless Defendant interprets this provision to somehow supervene the Rules of Civil Procedure and the common law itself by allowing an insurer to force a provider to litigate the medical necessity and relatedness of a service, it concedes was properly and voluntarily paid. Taken to its logical conclusion such an interpretation would mean that any payment from an insurer is illusory. An insurer, on a whim, could simply decide to change its mind and without asserting mistake, fraud, misrepresentation or duress demand the return of its prior payment. The court will not interpret the statute to lead to such an absurd result. A logical interpretation of this provision means that the requirement to provide an explanation of benefits does not preclude an insurer from asserting, mistake, fraud or misrepresentation, or some other legally cognizable basis that the common law provides to undo a previous payment.
26. The Court also finds support for Plaintiff’s argument in the language of subsection (4)(b) which requires the Defendant to “assert” that services previously paid were not medically necessary or related.
27. It is clear that the purpose of permitting an insurer to assert that an item was not reasonable or medically necessary even after it was paid is to enable an insurer to seek the return of the improperly paid item. If it contends that the services are indeed not covered, (i.e. not medically necessary or related) than such assertion must be clear and unequivocal. The statute does not permit the insurer to engage in a fishing expedition in discovery on facts that are not in dispute.
Accordingly based on the forgoing reasons, it is hereby ORDERED AND ADJUDGED that Plaintiff’s Motion for Protective Order regarding Deposition of the Claimant and the Claimant’s Treating Physician be and the same is hereby GRANTED. The Depositions that are currently set are hereby cancelled.
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1The Defendant would also have the burden of demonstrating that the Plaintiff would not be prejudiced by the Amendment. See Florida Rule of Civil Procedure 1.380(b).
2Amendatory Endorsement 6910.3 section 5(b) page 3 and 4
3Amendatory Endorsement 6910.3 section 5(b) page 4
4Derius vs. Allstate Indemnity 723 So.2d 271 (Fla. 4th DCA, 1998) [23 Fla. L. Weekly D1383a], often cited for the proposition that proving medical necessity and reasonableness is always plaintiff’s burden, is inapplicable here. The litigation there involved the reasonableness of a charge Allstate had already paid and the medical necessity and reasonableness of several charges Allstate had not paid.
5i.e. fraud, misrepresentation, mistake.
6At the time it was passed there was no statutory requirement that insurers had to provide an explanation of benefits. This subsection requires an explanation of benefits only when an insurer denies or partially pays a claim and further provides that the insurers include information that the insurer desires the insured to consider in support of its denial or partial payment of services. It further provides that when an explanation of benefits is provided an insurer is not limited from introducing evidence beyond that which it wanted its insured to consider.
