24 Fla. L. Weekly Supp. 964b

Online Reference: FLWSUPP 2411GHERInsurance — Personal injury protection — Coverage — Medical expenses — Deductible — PIP statute requires insurer to apply deductible to 100% of reasonable, related and necessary medical expenses rather than to entire amount billed by medical provider irrespective of compensability — Reasonableness of charges is issue for factfinder in instant case — Insurer’s initial decision to reimburse provider according to a fee-schedule-based formula did not preclude it from subsequently challenging reasonableness of charges

NEW MEDICAL GROUP, INC. a/a/o Gladys Herrera, Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 11-01870 SP 26. March 15, 2013. Lawrence King, Judge. Counsel: Stuart Koenigsberg, for Plaintiff. Jon Sorensen and Thomas L. Hunker, Plantation, for Defendant.

ORDER DENYING PLAINTIFF’S MOTION FORSUMMARY JUDGMENT ON COUNT I OFITS COMPLAINT ALLEGING DEFENDANT IMPROPERLYAPPLIED ITS POLICY DEDUCTIBLE

THIS CAUSE having come before the Court on February 21, 2013 on the Plaintiff’s Motion for Summary Judgment on Count I of its complaint alleging Defendant Improperly applied its policy deductible and the Court having reviewed the pleadings, having heard argument of counsel and being otherwise advised of the premises, the Court makes the following findings:

Findings of Fact:

1. Gladys Herrera was involved in a motor vehicle accident on February 25, 2010. At the time of the accident, Ms. Herrera was covered under an automobile insurance policy issued by United Automobile Insurance Company which provided no-fault coverage in the amount of $10,000.00.

2. In accordance with Florida Statute 627.739(2), the subject policy of insurance offered the purchaser the option to select a policy deductible of $250.00, $500.00 or $1,000.00. Ms. Herrera elected a policy of insurance with a deductible of $1,000.00.

3. As a result of the subject automobile accident, Ms. Herrera was injured and received treatment from the Plaintiff, New Medical Group, Inc.

4. The first two sets of medical bills submitted were from New Medical Group, Inc. in the amount of $1,890.00.

5. Upon review of the medical bills submitted, United Automobile Insurance Company determined that $1,385.08 of the submitted bills were compensable under the subject insurance policy.

6. United Automobile Insurance Company applied the $1,000.00 deductible elected by Ms. Herrera to the compensable bills resulting in a payment of $308.07, which is 80% of the amount allowed after application of the policy deductible.

Findings of Law:

The first question presented for the court’s determination is whether the deductible elected by Ms. Herrera is to be applied to compensable medical bills. It is the Plaintiff’s position that the deductible must be applied to the medical bills regardless of whether they are compensable or not. Thus, the question presented requires the court to interpret the Florida Motor Vehicle No Fault Act codified at sections 627.730-627.7405, Florida Statutes. Legislative intent, as always, is the polestar that guides a court’s inquiry under the Florida No-Fault Law. United Auto. Ins. Co. v. Rodriguez, 808 So. 2d 82, 85 (Fla. 2001) [26 Fla. L. Weekly S747a]. “Where the wording of the Law is clear and amenable to a logical and reasonable interpretation, a court is without power to diverge from the intent of the Legislature as expressed in the plain language of the Law.” Id. “It is axiomatic that all parts of a statute must be read together in order to achieve a consistent whole.” Forsythe v. Longboat Key Beach Erosion Control District, 604 So. 2d 452, 455 (Fla. 1992). “Where possible, courts must give full effect to all statutory provisions and construe related statutory provisions in harmony with one another.” Id. “[C]ourts are admonished not to read statutory language in isolation. It must be taken in context, so that its meaning may be illuminated in the light of the statutory scheme of which it is a part.” O’Hara v. State, 964 So. 2d 839, 843 (Fla. 2d DCA 2007) [32 Fla. L. Weekly D2214a] (following a statutory cross-reference and reading § 893.135, Florida Statutes, in light of § 893.13).

In this case, the two provisions at issue are sections 627.739(2) and 627.736. Section 627.739(2) states:

(2) Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, and $1,000. The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736. After the deductible is met, each insured is eligible to receive up to $10,000 in total benefits described in s. 627.736(1). However, this subsection shall not be applied to reduce the amount of any benefits received in accordance with s. 627.736(1)(c).

§ 627.739, Fla. Stat. (2010) (emphasis added). Plaintiff interprets this language to mean that the deductible applies to 100% of whatever amount it chooses to bill. However, that is not what the statute says. The plain language of the statute says that a PIP deductible applies to “100% of the expenses and losses described in s. 627.736.” Id. (emphasis added). Therefore, the court must follow the cross-reference and examine the language of section 627.736 in order to determine what expenses and losses are “described in s. 627.736.” Id.; see O’Hara, 964 So. 2d at 843. Florida Statute 627.736 has repeatedly been interpreted by Florida Courts to require the payment of medical services that arc determined to be medically necessary, reasonable in amount charged and related to an automobile accident. See Derius v. Allstate Indem. Co., 723 So.2d 271, 272 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D1383a] finding that “[A]n insurer is not liable for any medical expense to the extent that it is not a reasonable charge for a particular service or if the service is not necessary.”. Reading sections 627.736 and 627.739(2) together leads to the inescapable conclusion that a PIP deductible applies to 100 percent of the reasonable and necessary medical expenses.

Plaintiff’s interpretation is not supported by the language of section 627.739(2) because it ignores the words “described in s. 627.736.” According to the Oxford English Dictionary, the word “describe” means to “give an account in words of (someone or something), including all the relevant characteristics, qualities, or events.” Oxford English Dictionary (2012 ed.) (emphasis added). Section 627.736 describes the required medical benefits as including only “reasonable” charges for “necessary” treatment. Thus, under the plain language of the statutes (and the case law interpreting these statutes), the deductible applies to 100% of the “reasonable” and “necessary” medical expenses. This result is consistent with case law which holds that a deductible should only be applied to expenses which are deemed compensable. See General Star Indemnity Co. v. West Florida Village Inn, Inc., 874 So. 2d 26, 33-34 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D1070b] (“The notion that a deductible could be applied to loss that is not covered by the policy is fundamentally unreasonable. . . .”); United Auto. Ins. Co. v. Florida Orthopaedic Center, a/a/o Alexis Gonzalez, 16 Fla. L. Weekly Supp. 402a (Fla. 17th Circuit Appellate 2009), cert. denied No. 4D09-3002 (Fla. 4th DCA 2009) (holding that the deductible did not apply to bills which were denied as noncompensable); cf. Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d 3, 6 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a] (holding that the “English Rule” of priority is “first come-first served, for medical providers as long as their PIP claim is deemed to be compensable.”) (emphasis added). This position is further supported by the 11th Judicial Circuit, acting in its appellate capacity, in the matter of Rivero Diagnostic Center a/a/o Yolanda Pacho v. Mercury Insurance Company, 19 Fla. L. Weekly Supp. 1005b (11th Jud. Cir. 2012). Rivero Diagnostics appealed the county court’s entry of summary judgment in favor of Mercury Ins. Mercury had argued to the lower court that Rivero’s bill fell within the applicable $1,000.00 deductible elected by its insured. However, the Rivero bill was not the first bill received by Mercury. Rivero argued that the bills received prior to its bill should have been applied to the deductible. The Circuit Court reversed the lower court’s judgment to the extent that a determination had not yet been made as to whether the earlier bills were compensable. The Court opined that “there is a genuine issue of material fact as to whether two bills received by Mercury from another medical provider, prior to the receipt of River’s bill, were compensable. If the other bills were compensable, then the deductible should have been applied to them and Rivero’s bill should have been paid.” In other words, the deductible was not to be applied until such time as a determination was made as to whether the bills received were compensable. In order for a medical service to be “compensable” under Florida Statute 627.736, it must be medically necessary, reasonable in amount and related to an automobile accident. In the case sub judice, United Automobile does not dispute that the subject services were medically necessary and related to the subject automobile accident; however, United Automobile Insurance Company does dispute that the amount charged by the Plaintiff is reasonable and thus, fully compensable as billed.

Since the medical charges must be compensable to be applied to the deductible, the next question that must be answered is whether the bills submitted in the case sub judice are medically necessary, reasonably charged and related to the subject automobile accident. As indicated above, United Automobile Insurance Company disputes only one of the three elements — the reasonableness of the charges. It is the Plaintiff’s position that United cannot contest the “reasonableness” of the subject bills because it has utilized Medicare schedules, along with other factors, to determine the “reasonableness” of the charges. In support of its position, the Plaintiff cites Kingsway Amigo Ins. Co. v. Ocean Health, Inc. 63 So.3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a] and Geico Indem. Co. v. Virtual Imaging Services, Inc. 79 So.3d 55(Fla. 3d DCA 2011) [38 Fla. L. Weekly S517a]. The Plaintiff’s reliance on these cases is misplaced. In both these cases, the insurance carrier stipulated that it would not contest the reasonableness of the charges. Thus, the only question left to be decided by the court was whether a carrier could pay pursuant to Florida Statute 627.736(5)(a)(2) without including said provision in its policy of insurance. Accordingly, if permitted, the payment would relieve the necessity of addressing the “reasonableness” of the charges. Both Courts found that in order to avail itself of the subject statutory provision as a matter of law, a carrier must elect and identify, in its policy of insurance, its intention to reimburse providers in accordance with Florida Statute 627.736(5)(a)(2).

United concedes that it does not contain the above statutory provision in its policy of insurance and thus, in accordance with the above cases, it cannot avail itself of the provision and pay pursuant to 627.736(5)(a)(2); however, United argues that it can travel under 627.736(5)(a)(1) to determine whether the amount charged by the Plaintiff is a “reasonable” charge. In its assessment, as reflected in the affidavit of Ismail Sarabi filed by United Auto in opposition to the Plaintiff’s Motion for Summary Judgment, the charges submitted by the Plaintiff were not reasonable and were reduced to a “reasonable” charge before being applied to the deductible. In support of its position, United relies on State Farm v. Sestile, 821 So. 2d 1244 (2nd DCA 2002) [27 Fla. L. Weekly D1757a]. In Sestile, State Farm relied on a computer based program to arrive at a “reasonable” charge. The Second District Court of Appeals determined that “reasonableness” of a charge was to be left to the fact-finder. “In some cases, a computer database may accurately assess the reasonableness of a medical provider’s bill, in other cases, it may be far from the mark. But that is the insured’s burden to prove.” At 1244. It is United’s position that any determination as to the “reasonableness” of the charges involved in the case sub judice must be left to the fact-finder to resolve. This position is further supported by the case of All Family Clinic of Daytona Beach v. State Farm, 280 F.R.D. 688 (2012). AFC brought a complaint seeking damages and declaratory relief under Rule 23 alleging that the class consisted of providers whose bills for MRI services rendered to State Farm insureds were reduced or not paid based on OPPS. The court analyzed that in order to fulfill the requirements of Rule 23, the Plaintiff was required to establish the necessary elements of “numerosity, commonality, typicality and adequacy of representation.” “The dispositive question presented by the Motion at issue was whether State Farm’s improper use of the OPPS cap to discount MRI claims satisfied the “predominance” requirement of Rule 23(b). Where, after adjudication of the class-wide issues, the plaintiff must still introduce a substantial amount of individualized proof to establish most or all of the elements of its individual claim, the class is not suitable for certification under Rule 23(b)(3). Vega v. T-Mobile, USA, Inc., 564 F.3d 1256, 1270 (11th Cir.2009) [21 Fla. L. Weekly Fed. C1706a].” AFC had argued that common class questions predominated because the correct resolution of the case only required “a simple mathematical calculation of subtracting the amount the class should have been paid under the [PPFS] from the amount the class was paid by State Farm.”. However, State Farm disagreed with AFC’s claim that a simple substitution of the PPFS formula for the OPPS cap was warranted across the putative class. Relying upon its contract with AFC and Florida law, State Farm insisted that it could reevaluate each charge for reasonableness, thus requiring AFC to produce a substantial amount of individualized proof to demonstrate that each disputed charge should be reimbursed in whole or in part. AFC argued that because State Farm had elected to reimburse AFC according to a fee schedule-based formula, it could no longer consider the reasonableness of each charge. As in the case subjudice, AFC argued Kingsway committed State Farm to a fee-schedule assessment that now prevented it from arguing the “reasonableness” of the price. The Court found that despite State Farm’s initial election to reimburse according to a fee schedule amount, relying on an unauthorized schedule, its policy required that it reimburse AFC at eighty percent of “reasonable expenses”. Accordingly, the testimony of State Farm’s expert opining that the OPPS amount was a reasonable price was sufficient to create an issue of fact as to reasonableness for each individual claim; thus, failing to meet the “commonality” element necessary for class certification. In the present case, United clearly disputes the amount billed is a “reasonable amount”. The affidavit of Ismail Sarabi opines that the amount billed is not “reasonable” and further provides amounts which, based on the criteria set forth in 627.736(5)(a)(1) are reasonable. This Court cannot disregard said testimony and cannot weigh it against that submitted by the Plaintiff. Accordingly, the issue of “reasonableness” must be left to a fact-finder’s determination.CONCLUSION

In accordance with the foregoing, it is therefore ORDERED AND ADJUDGED that Plaintiff’s Motion for Final Summary Judgment is DENIED.