23 Fla. L. Weekly Supp. 304a

Online Reference: FLWSUPP 2304ALFOInsurance — Personal injury protection — Discovery — Reasonableness of charges — Trade secrets — Trial courts in multiple cases departed from essential requirements of law in ordering provider to disclose reimbursement rates from other insurers, including those with whom provider had entered into negotiated rate contracts that had confidentiality clauses, without reviewing materials in camera to determine whether requested material constituted trade secret, as provider contended, or whether provider had waived privilege — Moreover, it was unclear from records in the cases at issue whether requested discovery was relevant where policies at issue indicated insurer would pay 80% of all reasonable charges for medically necessary expenses but also referenced fee schedules, and provider claimed that insurer’s explanations of benefits showed payment was based on fee schedule, not on reasonableness of charges — Remand for further proceedings

VIRTUAL IMAGING SERVICES, INC., (a/a/o Jacqueline Perez, Rolando Santana, & Alberto Galindo Alfonso), Petitioner, v. UNITED AUTOMOBILE INSURANCE COMPANY, Respondent. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case Nos. 2013-445 AP; 2014-053 AP; 2014-202 AP. L.T. Case Nos. 2013-00393 SP 23 (03); 2012-25895 SP 23 (03); 2012-15919 SP 23 (01). September 10, 2015. On Petitions for Writ of Certiorari seeking relief from non-final discovery orders rendered by the Miami-Dade County Court, Honorable Linda S. Stein & Myriam Lehr, Judges. Counsel: Joseph Littman, for Petitioner. Karen Trefzger, for Respondent.

(Before BLAKE, LOPEZ and ARECES, JJ.)

(BLAKE, Judge.) Because each case at bar involves the same parties and attorneys who, in identical briefs, raise the same legal questions based on the same set of material facts, we issue this consolidated opinion; and consistent with several recently issued appellate decisions from this Circuit, we grant the Petitioner’s requests for certiorari relief, quash the non-final discovery orders at issue, and remand each case for further proceedings. Petitioner’s motions for appellate attorney’s fees and costs are also granted, pending a favorable outcome at trial on remand.

FACTS & PROCEDURAL HISTORY

In each case at hand, Virtual Imaging Services [Virtual] provided medical services to individuals that had personal injury protection (PIP) benefits with United Automobile Insurance Company [United]. Each individual subsequently assigned his or her PIP benefits to Virtual, who then became involved in litigation with United over claim payments. During the course of litigation, United submitted interrogatories for Virtual to provide their reimbursement rates from other insurers, including those with whom Virtual had entered into negotiated rate contracts with that had confidentiality clauses. Virtual objected to these discovery requests on the grounds that they were overbroad, burdensome, vague, and not reasonably calculated to lead to the discovery of admissible evidence. These objections went to hearing, where Virtual also argued that the trade secret privilege applied to this information. Each trial court overruled Virtual’s objections but limited the scope of the production requests and, in order to avoid disclosure of any trade secret or proprietary information, ruled that Virtual can omit the names of the insurance carriers. This appeal followed, and we have jurisdiction. Fla. R. App. P. 9.030(c)(2).DISCUSSION

“Orders improperly requiring the disclosure of trade secrets, even [those] providing for confidentiality limitations, are subject to certiorari review.” Cooper Tire & Rubber Co. v. Cabrera, 112 So. 3d 731, 733 (Fla. 3d DCA 2013) [38 Fla. L. Weekly D1012a]. To grant a writ of certiorari, a petitioner must show that the contested order 1) departs from the essential requirements of the law; 2) such that it results in material injury for the remainder of the case; and 3) said injury is incapable of correction on post-judgment appeal. Bianchi & Cecchi Servs., Inc. v. Navalimpianti USA, Inc., 159 So. 3d 980, 984 (Fla. 3d DCA 2015) [40 Fla. L. Weekly D668b]. Virtual has met this burden.

It is well-established that managed care contracts and their contents are proprietary in nature and can thus qualify as trade secrets under section 688.002(4), Florida Statutes. See Laser Spine Inst. v. Makanast, 69 So. 3d 1045, 1046 (Fla. 2d DCA 2011) [36 Fla. L. Weekly D2077b]; Columbia Hosp. (Palm Beaches) Ltd. P’ship v. Hasson, 33 So. 3d 148, 150-151 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D1067a]; Holmes Reg’l Med. Ctr. v. ACHA, 731 So. 2d 51 (Fla. 1st DCA 1999) [24 Fla. L. Weekly D1015b]. Therefore, these documents are also potentially entitled to the evidentiary trade secret protections of section 90.506, Florida Statutes. However, “when a party asserts the need for protection against disclosure of a trade secret, the court must first determine whether, in fact, the disputed information is a trade secret [which] usually requires the court to conduct an in camera review.” Gulfcoast Surgery Ctr., Inc. v. Fisher 107 So. 3d 493, 495 (Fla. 2d DCA 2013) [38 Fla. L. Weekly D341a]; Salick Health Care, Inc. v. Jerome J. Spunberg et. al., 722 So. 2d 944, 946 (Fla. 4th DCA 1998) [24 Fla. L. Weekly D113a]; Rare Coin-it, Inc. v. L.J.E, Inc., 625 So. 2d 1277, 1278-1279 (Fla. 3d DCA 1993). If the information is a trade secret, “the court must require the party seeking production to show reasonable necessity for the requested materials,” and if the trial court orders production, it “must [clearly] set forth its findings.” Sheridan Healthcorp, Inc. v. Total Health Choice, Inc., 770 So. 2d 221, 222 (Fla. 3d DCA 2000) [25 Fla. L. Weekly D2503b].

Here, the orders under review contain no findings on whether United’s discovery requests will disclose trade secrets or confidential information, and nothing in the record suggests that Virtual waived its trade secret privilege. It also appears that the trial courts ordered disclosure of the disputed materials without reviewing them in camera. There, consequently, has been a departure from the essential requirements of law that will result in irreparable, material injury.

Furthermore, it is unclear from the records whether the requested discovery is relevant to the instant cases, and “the test for discovery is always relevance.” Diaz-Verson v. Walbridge Aldinger Co., 54 So. 3d 1007, 1009 (Fla. 2d DCA 2010) [36 Fla. L. Weekly D26b]; Orange Park Chiropractic Ctr. v. Southern-Owners Ins. Co., 22 Fla. L. Weekly. Supp. 1163a (Fla. 4th Cir. Ct. Apr. 30, 2015) (“[E]vidence of reimbursements pursuant to negotiated rate contracts are not relevant or discoverable because such contracts negotiate rates irrespective of the submitted charge”) (emphasis in original). More specifically, United seeks these other reimbursement rates in order to challenge the reasonableness of Virtual’s fees. Florida law, though, provides two ways for insurers to calculate reimbursement: i.) a “fact dependent method under [section] 627.736(5)(a)1, [Florida Statutes]; or ii.) by utilizing the permissive fee schedules under 627.736(5)(a)2.” New Smyrna Imaging, LLC, v. State Farm Mut. Auto. Ins. Co., 22 Fla. L. Weekly Supp. 935b (Fla. 7th Cir. Ct. Mar. 4, 2015) (citing Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So. 3d 147 (Fla. 2013 [38 Fla. L. Weekly S517a])). These methodologies are separate and distinct, and an insurer cannot alternate between the two; it must clearly select one in the policy itself, and reasonableness of the medical charges is irrelevant under the fee schedule plan. Id.; Pan Am Diagnostic Servs., Inc., v. State Farm Mut. Auto. Ins. Co., 22 Fla. L. Weekly Supp. 1165a (Fla. 11th Cir. Ct. Apr. 30, 2015); Fla. Hosp. Med. Ctr. v. Progressive Select Ins. Co., 22 Fla. L. Weekly Supp. 1164b (Fla. 9th Cir. Ct. Apr. 22, 2015) (“The purpose of (5)(a)2 was to reduce costs and eliminate litigation regarding reasonableness of charge. In other words, since the 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 . . .”). However, “[a]n insurance company is not precluded from offering greater coverage than that required by statute.” Kingswav Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63, 68 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a].

Here, the policies at hand seem to trigger section 627.736(5)(a)1 as they indicate United will pay “eighty percent of all reasonable charges for medically necessary expenses.” See id. at 65, 67. However, they also reference “fee schedules,” and Virtual has asserted that United erroneously limited reimbursement to 80% of 200% of an outdated 2001 Medicare Part B fee schedule. Virtual, more specifically, claims that the benefits explanations shows a payment reduction according to the 2001 fee schedule, rather than paying a reasonable amount of the charges. Therefore, in order to ascertain whether the reasonableness of the charges is relevant, the trial courts must determine which payment method United utilized.

Accordingly, we grant Virtual’s petitions for certiorari relief and quash the discovery orders below. These cases are remanded to their respective trial courts with instructions to determine whether the disputed discovery is relevant and then, if necessary, conduct an in camera review to determine if said discovery involves trade secrets or confidential information. If so, the trial courts must next ascertain whether United demonstrated a reasonable necessity for the information and whether safeguards are required to prevent unnecessary dissemination of the trade secret or confidential information. See Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., 22 Fla. L. Weekly Supp. 1144a (Fla. 11th Cir. Ct. May 15, 2015); Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., 22 Fla. L. Weekly Supp. 1145a (Fla. 11th Cir. Ct. May 8, 2015); Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., 22 Fla. L. Weekly Supp. 1116a (Fla. 11th Cir. Ct. May 7, 2015); Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., 22 Fla. L. Weekly Supp. 1000b (Fla. 11th Cir. Ct. Apr. 1, 2015); Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., 22 Fla. L. Weekly Supp. 882a (Fla. 11th Cir. Ct. Mar. 26, 2015); Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., 22 Fla. L. Weekly Supp. 884a (Fla. 11th Cir. Ct. Mar. 11, 2015); Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., No. 14-166 AP, slip. op. (Fla. 11th Cir. Ct. Dec. 11, 2014); Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., 22 Fla. L. Weekly Supp. 429a (Fla. 11th Cir. Ct. Oct. 3, 2014); Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., 22 Fla. L. Weekly Supp. 184b (Fla. 11th Cir. Ct. Sept. 11, 2014); Virtual Imaging Servs., Inc., v. United Auto. Ins. Co., 22 Fla. L. Weekly Supp. 421a (Fla. 11th Cir. Ct. Sept. 9, 2014).

Additionally, because we vacate the interlocutory orders at issue, we grant Virtual’s motions for appellate attorney’s fees under section 627.428, Florida Statutes, provided that Virtual prevails on the merits of these cases on remand. See Magnetic Imaging Sys., I, Ltd. v. Prudential Prop. & Cas. Ins. Co., 847 So. 2d 987, 989-90 (Fla. 3d DCA 2003) [28 Fla. L. Weekly D679a]. (LOPEZ, J., concurs.)

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(ARECES, J., dissenting.) I respectfully dissent. These cases are distinguishable from Sheridan Healthcorp, Inc. v. Total Health Choice, Inc., 770 So. 2d 221 (Fla. 3d DCA 2000) [25 Fla. L. Weekly D2503b], and from the other district court opinions cited by the majority to support their position that the trial courts must conduct an in camera review and make specific findings regarding the need to disclose trade secrets. In the cases cited the trade secrets were being disclosed, unlike the cases at issue where the trial courts did not require the production or disclosure of trade secrets. The orders entered by the trial courts limited the timeframe and provided sufficient safeguards to prevent disclosure of trade secrets. It is an exercise in futility and a waste of judicial resources to require the trial courts to conduct an in camera inspection and make specific findings that the agreements in question qualify as trade secrets, when, as set forth in the majority opinion, it is already well-established that managed care contracts and their contents are proprietary in nature and thus qualify as trade secrets under section 688.002(4), Florida Statutes. Moreover, based on the manner in which information is ordered to be provided, it is unnecessary to include specific findings about United’s need for the trade secrets since the trade secrets are not being disclosed. Without disclosure there is no irreparable harm. There is also no specific requirement that there be an actual written finding of relevance. It is clear that if an objection to relevance has been timely made and thereafter an order is entered requiring a response, be it in whole or in part, the relevance determination has been made. The trial courts did not depart from the essential requirements of law. I would affirm.