24 Fla. L. Weekly Supp. 435b
Online Reference: FLWSUPP 2406GAINInsurance — Personal injury protection — Coverage — Medical expenses — Reasonableness of charges was not at issue where insurer applied statutory fee schedule, and discovery as to reasonableness of provider’s charge is irrelevant, immaterial, and not reasonably calculated to lead to discovery of admissible evidence on the sole issue before the court, which is whether policy provided sufficient notice to insured
FLORIDA HOSPITAL MEDICAL CENTER, as assignee of Zoe Gainous, Plaintiff, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2013-SC-5856. June 10, 2016. Steve Jewett, Judge. Counsel: David B. Alexander, Orlando, for Plaintiff. Henry R. Ramos, Orlando, for Defendant.ORDER
THIS MATTER having come before this Honorable Court on Defendant’s Motion to Compel Deposition and Plaintiff’s Motion for Protective Order and this Honorable Court having reviewed the motions and being otherwise fully advised in the premises, makes the following findings:
1. The Plaintiff, a hospital facility, submitted its medical bill for date of service 11/22/2008 seeking reimbursement from Defendant for the Personal Injury Protection benefits and Medical Payments benefits under the subject policy (the policy contract at issue is form 9610A FL (10/05)). Defendant’s Explanation of Benefits limits the reimbursement to 75% of the Plaintiff’s charges. Defendant’s Explanation of Benefits provides explanation code “381”, which provides the following explanation for the limited reimbursement: “[t]he allowable amount has been calculated pursuant to Florida Statute 627.736(5) 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. (2008).
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. Further, this Court relies upon three (3) appellate opinions issued by the Ninth Judicial Circuit of Florida, sitting in its appellate capacity, on September 24, 2015. See Progressive Select Insurance Company v. Florida Emergency Physicians Kang & Associates, M.D., P.A., a/a/o Kerry Tastinger, Case No.: 2014-CV-000072-A-O [21 Fla. L. Weekly Supp. 798a]; Progressive American Insurance Company v. Emergency Physicians of Central Florida, LLP a/a/o Ebony Williams, Case No.: 2014-CV-000079-A-O [22 Fla. L. Weekly Supp. 728c]; and Progressive Express Insurance Company v. Emergency Physicians of Central Florida, LLP a/a/o Ivan Romano, Case No.: 2014-CV-000112-A-O [21 Fla. L. Weekly Supp. 794b]. All three (3) appellate opinions specifically found that “if an insurer applies a fee schedule per the statute, then there is no need to have a fact-dependent inquiry on reasonableness of the charge.” Id. In each of the three (3) binding appellate opinions, the Ninth Judicial Circuit Court ruled that “the trial court cited Virtual III and properly found that there was no dispute as to the reasonableness of [the medical provider’s] charges because Progressive utilized the fee schedule per section 627.736(5)(a)2.c., Florida Statutes, that provided an alternative mechanism for determining reasonableness of the charges and thus, the trial court properly concluded that an additional fact-dependent inquiry was not necessary.” Id. Although the Fifth District Court of Appeals reversed the above cited appellate opinions on other unrelated grounds, the above cited holdings of the Ninth Judicial Circuit are still binding upon this Court and control the present legal issue at hand. It is worth noting, such reversals based upon other unrelated grounds are currently pending before the Florida Supreme Court. In Progressive Select Ins. Co. v. Florida Emergency Physicians Kang & Associates, M.D., P.A., a/a/o Kerry Tastinger, Case No. 5D15-3718 [41 Fla. L. Weekly D335b], the Fifth District Court of Appeals in an opinion issued on February 5, 2016 affirmed the notion that the reasonableness of charges can not be challenged once an insurer applies the permissive schedule of maximum charges. In footnote (1) of said opinion, the Fifth District Court of Appeals ruled that the insurer, Progressive, “paid FEP the net balance it was entitled to receive under section 627.736(1)(a), Florida Statutes (2012).” See Progressive Select Ins. Co. v. Florida Emergency Physicians Kang & Associates, M.D., P.A., a/a/o Kerry Tastinger, Case No. 5D15-3718 (Fla. 5th DCA February 5, 2016) [41 Fla. L. Weekly D335b]. In turn, despite the insurer’s argument in Tastinger that reasonableness of the charge was still at issue, the Fifth District Court of Appeals ruled that the provider’s charge was reasonable considering the insurer’s utilization of the permissive fee schedule set forth within Fla. Stat. §627.736(5)(a)2. (2008). Id.
4. 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. (2008) and 2) is the statute dependent method, otherwise known as the permissive schedule of maximum charges under Fla. Stat. §627.736(5)(a)2. (2008). 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.
5. 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.
6. The purpose of (5)(a)2. was to reduce costs and eliminate litigationregarding reasonableness of the 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.
7. 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.
8. 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.
9. 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. (2008)), which Defendant has done in this matter, the only legal question to be determined is whether the insurer’s policy of insurance provides sufficient notice to its insured.
10. The Court finds that the reasonableness of Plaintiff’s charge is not at issue in this matter. 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 and Defendant’s actions in this claim. In turn, discovery as to the reasonableness of Plaintiff’s charge is irrelevant, immaterial, and not reasonably calculated to lead to the discovery of 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 the discovery of admissible evidence).
Pursuant to the findings set forth in this Order, it is hereby ORDERED AND ADJUDGED that:
11. Defendant’s Motion to Compel Deposition is hereby DENIED.
12. Plaintiff’s Motion for Protective Order hereby GRANTED.
