24 Fla. L. Weekly Supp. 463b
Online Reference: FLWSUPP 2406IRVIInsurance — Personal injury protection — Coverage — Medical expenses — Reasonableness of charges — Summary judgment — Medical provider established prima facie showing of reasonableness of MRI charges through affidavit of provider’s owner, publications, and geozip report — Reasonableness of charges is undisputed where insurer withdrew affidavit of its expert and offered no other evidence on issue — Insurer cannot challenge medical necessity and relatedness of services where insurer made partial payment for services and did not assert lack of relatedness and necessity as affirmative defense — Section 627.736(4)(b), which provides that insurer may assert that claim was unrelated or not medically necessary at any time, does not allow insurer to challenge relatedness and necessity where there is no record evidence of insurer having made any such assertion in case
OPEN MRI OF BOCA, LLC, a/a/o Lola Irvine, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. CONO12-009432(70). February 29, 2016. John D. Fry, Judge. Counsel: Travis L. Stock, Weinstein Law Firm, Coral Springs, for Plaintiff. Keely Lockwood, Matt Hellman, P.A., for Defendant.
ORDER GRANTING PLAINTIFF’S MOTIONFOR FINAL SUMMARY JUDGMENT
This cause came before the Court, on December 01, 2015, on January 06, 2016, and on February 18, 2016, after due notice to the parties, on Plaintiff’s Motion for Final Summary Judgment. The amount in controversy for PIP benefits (and/or Med Pay benefits) is a total of $1,708.74 and at the time of the initial hearing, this case had been pending for 1,142 days.
After careful consideration, the Court finds no genuine issue of material fact and hereby grants Final Summary Judgment in favor of the Plaintiff as to reasonableness, medical necessity, and relatedness.
Analysis and Findings of Fact re: Reasonableness
The Plaintiff filed this small claims lawsuit against the Defendant for breach of a contract of personal injury protection benefits (and/or med pay) under the Florida No-Fault law. It is undisputed that the Defendant’s policy requires the Defendant to pay 80% of all reasonable expenses. Reasonableness is a range, not a set number and the Plaintiff argues its charge is within the range of what is reasonable. Based on the reasons set forth below, the Court agrees with Plaintiff that its charge of $1800 for each of the CPT codes at issue in this lawsuit is within the range of what is reasonable.
In determining whether a charge for a particular service or treatment is reasonable, there are two methods by which an insurer may calculate reimbursement: (1) the fact dependent method under Fla. Stat. § 627.736(5)(a)(1), or (2) by utilizing the permissive fee schedules under Fla. Stat. §627.736(5)(a)(2). These payment 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 two methods. Therefore, the primary question to be determined is whether State Farm has attempted to limit reimbursement under the statute’s schedule of maximum charges and whether its policy of insurance provides sufficient notice as required by the Florida Supreme Court case of Geico Gen. Ins. Co. v. Virtual Imaging Services, 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a].
In this case, the Defendant received the Plaintiff’s bill of $1,800 for each MRI (i.e., CPT Code 72141, 73221, and 72148) and paid it, according to the Defendant’s explanation of review, based upon 200% of the Participating Level of Medicare Part B fee schedule for the region in which the services were rendered. There is no record evidence that the Defendant used any factors other than the Medicare Part B fee schedule when it issued payment to the Plaintiff. It is undisputed that, as a matter of law, the Defendant’s policy of insurance does not permit it to pay claims based solely upon 200% of the Medicare Part B fee schedule since Defendant did not elect the permissive payment methodology described in Florida Statute § 627.736(5)(a)(2) and Geico Gen. Ins. Co. v. Virtual Imaging Services, 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a].
On August 28, 2015, the Court entered an Order on Case Management and Imposing Time Limitations. Among other deadlines, this Order had a discovery deadline of September 28, 2015, a deposition deadline of October 27, 2015, and a deadline to file any remaining motions of November 11, 2015. The matter is ripe for Summary Judgment as there has been more than sufficient time for the parties to diligently take advantage of discovery opportunities, to complete all reasonable discovery, and any pending discovery would not be material to the issue(s) currently before the Court.
Plaintiff moves for Summary Judgment based on the sufficient and competent affidavit of Patrick Lopez, a shareholder/owner of the Plaintiff, who, based on a substantial showing, avers that the amount of Plaintiff’s charge for each MRI at issue in this lawsuit is reasonable. Additionally, Patrick Lopez indicates in paragraph 6 of the affidavit that “Plaintiff rendered diagnostic testing to the assignor, Lola Irvine, on March 27, 2012, at Plaintiff’s facility. A true and accurate copy of the medical bill is attached hereto as Exhibit 1.” {Editors note: Exhibit excluded}
The Court finds that Patrick Lopez has significant personal experience and knowledge of the billing and collections aspect of the MRI industry and what is a reasonable charge for each of the MRIs at issue. He has reviewed over 30,000 claims. He is aware of what other MRI providers charge in the community and what the Plaintiff has been paid by PIP insurers, including State Farm, that pay a reasonable amount (i.e., 80% to 100% of Plaintiff’s charge). Plaintiff also relies on four publications: Physician’s Fee and Coding Guide, Physicians Fee Reference, Ingenix and Medical Fees in the U.S. See Fla. Stat. §90.803(17) and United Auto. Ins. Co. v. Hallandale Open MRI, LLC (a/a/o Antonette Williams), 21 Fla. L. Weekly Supp. 399d (Fla. 17th Cir. App. Ct. 2013). Second tier certiorari was denied by the Fourth DCA. See United Auto. Ins. Co. v. Hallandale Open MRI, LLC (a/a/o Antonette Williams), 145 So. 3d 997 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D1883c]. The 17th Circuit Opinion has been cited numerous times statewide to support Courts’ decisions to grant summary judgment in PIP cases.
In addition to the affidavit and evidence that Plaintiff relies upon as indicated in its motion for summary judgment, the Plaintiff also relies upon the law set forth in Pan Am Diagnostic Services, Inc. (a/a/o Fritz Telusma) v. United Auto. Ins. Co., 21 Fla. L. Weekly Supp. 200a (Fla. Broward Cty. Ct. 2013) where Judge Lee set forth the following:
A plaintiff’s prima facie showing of the reasonableness of its charges can be established by merely presenting the medical bill produced for the service at issue, along with testimony that the patient received the treatment in question. See A.J. v. State, 677 So.2d 935, 937 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D1677e]; Iowa Mutual Nat’l Ins. Co. v. Worthy, 447 So.2d 998, 1000 n.5 (Fla. 5th DCA 1984); Polaco v. Smith, 376 So.2d 409, 409-10 (Fla. 1st DCA 1979); State Farm Mutual Auto. Ins. Co. v. Multicare Medical Group, Inc., 12 Fla. L. Weekly Supp. 33a, 33 (11th Cir. Ct. 2004) (appellate capacity). As noted by the Fourth DCA, “[A] medical bill constitutes the provider’s opinion of a reasonable charge for the services.” A.J., 677 So.2d at 937. In the alternative, a Plaintiff may also present lay testimony from a fact witness with firsthand knowledge as to why the charge for the service was set at the rate at which it was billed. Multicare, 12 Fla. L. Weekly Supp. at 33a. A Plaintiff may, but is not required to, produce an expert witness to establish the reasonableness of its charges. Sea World of Florida, Inc. v. Ace American Ins. Co., Inc., 28 So.3d 158, 160 (Fla. 5th DCA 2010) [35 Fla. L. Weekly D361a]; Canseco v. Cheeks, 939 So.2d 1122, 1123 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D2485a]; A.J., 677 So.2d at 937-38; East West Karate Assn, Inc. v. Riquelme, 638 So.2d 605, 605 (Fla. 4th DCA 1994); Multicare, 12 Fla. L. Weekly Supp. at 33a; Kompothrecas v. Progressive Consumers Ins. Co., 8 Fla. L. Weekly Supp. 505a, 506 (Sarasota Cty. Ct. 2001).
Lastly, the Plaintiff relied upon the GeoZip report that Defendant produced in this case. According to the GeoZip report, at least 30 other MRI providers in the same region as the Plaintiff charged the same or more than what the Plaintiff charged for each MRI at issue in this case for the same year that the services were rendered in this case.
Even without the GeoZip report, the Court finds that the Plaintiff met its burden of establishing the reasonableness of the MRI charges. See Hallandale Open MRI, LLC (a/a/o Antonette Williams). Since the Plaintiff has met its burden, the burden of proof now shifts to the Defendant to establish a genuine issue of material fact.
It is well settled that Defendant may not defeat a Motion for Summary Judgment by raising purely paper issues where the pleadings and evidentiary matters before the trial court show that defenses are without substance in fact or law. See e.g., Hialeah Medical Assoc. Inc., (a/a/o Ana Lexcano) v. United Auto. Ins. Co., 21 Fla. L. Weekly Supp. 487b (Fla. 11th Cir. Ct. App. 2014). It is not sufficient for the opposing party to merely assert that a genuine issue of material fact exists. It is equally well established in Florida that a litigant when confronted with an adverse motion for summary judgment, may not contradict or disavow prior sworn testimony with contradictory sworn affidavit testimony. See Ondo v. F. Gary Gieseke, P.A., 697 So. 2d 921 (Fla. 4th DCA 1997) [22 Fla. L. Weekly D1770a]; Ellison v. Anderson, 74 So. 2d 680 (Fla. 1954); Elison v. Goodman, 395 So. 2d 1201 (Fla. 3d DCA 1981); Willage v. Law Offices of Wallace and Breslow, P.A., 415 So. 2d 767 (Fla. 3d DCA 1982); and Cary v. Keene Corp., 472 So. 2d 851 (Fla. 1st DCA).
In this case, Defendant initially relied on the affidavit of Dr. Keith Mullenger, M.D. to contest the reasonableness of Plaintiff’s charge. However, after Plaintiff pointed out the fact that Dr. Mullenger was a medical director of several MRI facilities that billed State Farm an amount that exceeded the amount he opined was reasonable and after a lengthy conversation that this Court had with Dr. Mullenger on the record, Defendant chose to withdraw Dr. Mullenger as its expert on December 16, 2015. Defendant then proceeded to summary judgment with no expert and no evidence to oppose Plaintiff’s motion. As such, at the time of the hearing, and after over 3 years of litigation, Defendant failed to present any record evidence whatsoever to dispute Plaintiff’s position that its charge is reasonable. Based on the entire record that is before the Court, there is no genuine issue of material fact to dispute that the Plaintiff’s charge is within the range of reasonableness.
As such, the Court finds that State Farm did not meet its burden to establish a genuine issue of material fact as to the reasonableness of the charge for the Plaintiff’s MRI.
Accordingly, Plaintiff’s Motion for Summary Judgment is hereby GRANTED as to reasonableness for the reasons set forth above and on the record, in the Plaintiff’s motion for summary judgment, and in the documents relied upon by the Plaintiff.
Analysis and Findings of Fact re: Medical Necessity and Relatedness
As mentioned above, Defendant allowed the services billed by the Plaintiff in this case, but reduced the amount allowed when making partial payment based on the Medicare fee schedule. Pursuant to both the Defendant’s policy of insurance and the Florida No-Fault statute, each set forth below, only charges for medically necessary and related treatment are covered medical expenses. It is axiomatic that Defendant’s payment, made pursuant to the terms of its policy of insurance, represents a determination by Defendant that Plaintiff’s services were “covered services” (i.e., that the services were medically necessary and related). See e.g., Pan Am Diagnostic Services, Inc., d/b/a Pan Am Diagnostic of Orlando (a/a/o Junior Valceus) v. State Farm Fire and Casualty Ins. Co., 23 Fla. L. Weekly Supp. 374b (Fla. Broward Cty. Ct. 2015).
Defendant’s policy of insurance states, in relevant part, the following:1
What We Pay
1. 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 or her religious beliefs.
Florida Statute §627.736 states, in relevant part, the following:
(1) 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. . .
Defendant’s policy goes further and specifically provides that it will not pay any services that the No Fault act does not require it to pay:2
“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.”
After careful consideration of the applicable Florida Statutes, relevant case law, and legislative history of the applicable Florida Statutes, the Court finds, for the reasons set forth below, that State Farm cannot now challenge relatedness and medically necessity under the facts and circumstances of this case and that the services performed by the Plaintiff are related and medically necessary.
Under the facts and circumstances of this case, the issue of medical necessity and relatedness are not properly before the court since at the time of this hearing State Farm failed to timely raise medical necessity or relatedness as an affirmative defense
Florida Rule of Civil Procedure 1.110(d) provides that “a party shall set forth affirmatively . . . any . . . matter constituting an avoidance or affirmative defense.” Florida Rule of Civil Procedure 1.140(b) provides that “Every defense in law or fact to a claim for relief in a pleading shall be asserted in the responsive pleading[.]” In Florida, it is well settled that if an affirmative defense is not pleaded it is considered waived. See e.g., Congress Park Office Condos II, LLC v. First-Citizens Bank & Trust Co., 105 So. 3d 602 (Fla. 4th DCA 2013) [38 Fla. L. Weekly D145a]; Kersey v. City of Riviera Beach, 337 So. 2d 995, 997 (Fla. 4th DCA 1976); Accurate Metal Finishing Corp. v. Carmel, 254 So. 2d 556 (Fla. 3d DCA 1971) (“Affirmative defenses must be pleaded and it is not sufficient to sustain a defense to a summary judgment motion to allege such in affidavits.”).
In a typical lawsuit for unpaid personal injury protection benefits it is Plaintiff’s burden to prove reasonableness, medical necessity, and relatedness. However, Plaintiff is not required to prove the medical necessity and relatedness of services that Defendant has conceded and already paid.3 As explained in more detail below, to challenge the medical necessity or relatedness of a previously paid service under the facts and circumstances of this case, the burden is on the Defendant to assert a defense4 seeking a reversal of the prior payment and allege a legally cognizable basis for its change of position.5 In this case, Defendant did not timely raise such a challenge as an affirmative defense and further was unable to show even a mere scintilla of evidence that would justify a challenge to the medical necessity and relatedness of the claimed services.
State Farm’s reliance on Fla. Stat. § 627.736(4)(b) is misplaced
Fla. Stat. § 627.736(4)(b) provides, in pertinent part, as follows:
(b) Personal injury protection insurance benefits paid pursuant to this section shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same. . . . 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, . . . This paragraph does not preclude or limit the ability of the insurer to assert that the claim was unrelated, was not medically necessary, . . . 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.
Defendant relies on Fla. Stat. § 627.736(4)(b) for the proposition that it can challenge medical necessity and relatedness at any time. The Court believes that Defendant misinterprets this statute by over reading the plain statutory language and further by suggesting an interpretation that leads to an absurd result.
It is well settled that an interpretation of a statute cannot be given effect if it leads to an unreasonable or ridiculous result.6 Here, by construing Fla. Stat. § 627.736(4)(b) in such a manner that would allow an insurer — in perpetuity — to simply decide to change its mind and without asserting mistake, fraud, misrepresentation, etc. demand the return of its prior payment is equally absurd and the Court will not interpret the statute to lead to such an absurd result.
As mentioned above, the stated purpose of the PIP statute is to provide for swift and virtually automatic payment of an insured’s medical bills so Florida insurance consumers can go on with their lives without the financial burden of unpaid medical bills hanging over their heads. To construe Fla. Stat. § 627.736(4)(b) in a manner that extends its application into perpetuity defies logic, common sense, and the entire purpose of the overall legislation codified in the Florida Motor Vehicle No-Fault Act.
The Court also finds support for Plaintiff’s argument based on the plain language of subsection (4)(b), which requires the Defendant to “assert”7 that services previously paid were not medically necessary or related. In this case, there is no record evidence demonstrating that Defendant made such an assertion. In fact, Defendant made no effort whatsoever to challenge medical necessity or relatedness until November 24, 2015 — 1,135 days into litigation and several days before the hearing on Plaintiff’s motion for final summary judgment. The Court questions why the Defendant would wait this long to obtain a peer review when the Defendant was in possession of all of the same information that the peer review doctor relied upon years ago.
Even if the Court were to find, which it does not, that State Farm did timely contest medical necessity and relatedness, the Court would still enter summary judgment in favor of the Plaintiff for the reasons set forth on the record.
Accordingly, Plaintiff’s Motion for Summary Judgment is hereby GRANTED as to relatedness and medical necessity.
Based on the discussion had on the record, the Court finds that there are no triable issues remaining in this matter.
ORDERED AND ADJUDGED that Plaintiff, OPEN MRI OF BOCA, LLC (a/a/o Lola Irvine), does have and recover from Defendant, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, the sum of $1,708.74, plus prejudgment interest of $309.58 for a total sum of $2,018.32, which shall bear interest at the legal rate of 4.75%, for all of which let execution issue.
It is further,
ADJUDGED, that Plaintiff is entitled to reasonable attorneys’ fees and costs and this Court retains jurisdiction to determine the amount of same.
__________________
1Amendatory Endorsement 6910.3 section 5(b) page 3 and 4.
2Amendatory Endorsement 6910.3 section 5(b) page 4.
3Derius v. 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.
4See Fla.R.Civ.P. 1.140(b): “Every defense in law or fact to a claim for relief in a pleading shall be asserted in the responsive pleading, . . .” (Emphasis added).
5E.g., Fraud, misrepresentation, mistake, etc.
6See City of Miami Beach v. Galbut, 626 So. 2d 192, 193 (Fla. 1993) (a statute’s plain and ordinary meaning must be given effect unless it leads to an unreasonable or ridiculous result). In Spence-Jones v. Dunn, 38 Fla. L. Weekly D1575b n. 2 (Fla. 3d DCA July 24, 2013), the court held that a statutory provision will not be construed in such a way so as to render meaningless or absurd any other statutory provision. See also Palm Beach County Canvassing Board v. Harris, 772 So. 2d 1273, 1287 (Fla. 2000) [25 Fla. L. Weekly S1126a].
7Assertion is defined in Black’s Law Dictionary as “a declaration or allegation.”
