25 Fla. L. Weekly Supp. 984a

Online Reference: FLWSUPP 2511CAMPInsurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Where claims for PIP benefits were paid to insured’s other medical providers in order in which compensability was established, thereby exhausting policy limits before plaintiff medical provider’s claims were deemed compensable, final summary judgment is entered in favor of insurer — Assignment of benefits does not provide plaintiff with standing to challenge insurer’s determination that other providers’ bills were reasonable, related and necessary

ATLAS MEDICAL AND ORTHOPEDICS, LLC d/b/a DR. RAHAT FADERANI, DO, MHP, PA a/a/o Eliana Campos, Plaintiff, v. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE-16-000439 (54). Civil Division. October 30, 2017. Florence Taylor Barner, Judge. Counsel: Vincent J. Rutigliano, Rosenberg & Rosenberg, P.A., Hollywood, for Plaintiff. Marcella L. Amador-Walled, Progressive PIP House Counsel, Miami, for Defendant.

ORDER GRANTING DEFENDANT’S MOTION FORFINAL SUMMARY JUDGMENT BASED ONEXHAUSTION OF BENEFITS AND DENYINGPLAINTIFF’S MOTION FOR FINALSUMMARY JUDGMENT

THIS CAUSE having come on to be heard on September 18, 2017, and the Court having heard the argument of counsel, having reviewed the record evidence, pleadings, motions and discovery responses, the deposition transcript of Heather Tenn (litigation adjuster assigned to the lawsuit filed by Tropical Chiropractic), Deposition Transcript of Miriam Jimenez (medical claims representative), Affidavit of Jesse Spinnato, Affidavit of Heather Tenn and being otherwise advised in the premises, does hereby make the following findings of fact and conclusions of law:

I. STATEMENT OF FACTS

1. The Plaintiff filed the instant action against the Defendant for Personal Injury Protection (PIP) Benefits under a policy of insurance issued by the Defendant to the claimant, Eliana Campos.

2. The assignor, Eliana Campos, was involved in a motor vehicle accident on February 4, 2015.

3. The Plaintiff rendered follow-up medical care and treatment to Eliana Campos on the following dates of service: February 27, 2015, April 16, 2015, May 21, 2015 and June 30, 2015.

4. Plaintiff timely submitted medical bills to Defendant for dates of service, February 27, 2015, April 16, 2015, May 21, 2015 and June 30, 2015.

5. According to the Medical Payments Ledger (“PIP Log”) that Defendant filed in support of its motion for final summary judgment, Defendant received timely medical bills from two other providers, Scott Herman, DC (d/b/a Tropical Chiropractic Center) and Stand-Up MRI, for treatment rendered to Eliana Campos.

6. The bills were deemed compensable by Defendant on the following dates (listed in chronological order):

PROVIDER	DATE OF SERVICE	DATE BILL WAS RECEIVED	DATE SERVICE DEEMED MEDICALLY NECESSARY
Tropical Chiropractic	2/6/2015 to 2/25/2015;2/11/2015 to 2/26/2015;3/2/2015 to 3/5/2015	3/2/20153/9/20153/16/2015	6/2/20156/2/20156/2/2015
Stand-Up MRI	3/18/2015	3/30/2015	10/12/2015
Tropical Chiropractic	3/17/2015 to 4/30/2015	4/2/2015; 4/13/2015; 4/16/2015; 5/4/2015 and 5/8/2015	12/14/2015
Atlas Medical	2/27/2015 4/16/2015 5/16/2015 6/30/2015	3/23/2015 5/8/2015 6/9/2015 7/30/2015	Not Yet Established

7. Progressive investigated the claims to determine whether and to what extent the charges were payable based upon the terms and conditions of the underlying policy (i.e. coverage limits for non-emergency conditions vs. emergency conditions), and whether the services were reasonable, related and medically necessary. Unable to verify whether the services were related, reasonable and medically necessary, whether the patient received initial services and care within 14 days after the motor vehicle accident as required under §627.736(1)(a)1, Fl. Stat. (2015), whether the follow up care provided by Plaintiff was consistent with the initial care and services as required under §627.736(1)(a)2, Fl. Stat. (2015) and determine the applicable available benefits limits pursuant to §627.736(1)(a)(3-4), Fl. Stat. (2015), Progressive denied payment to and requested additional information from Tropical Chiropractic and Plaintiff pursuant to §627.736, Florida Statutes (2015). These requests asked for a report signed by the physician who performed the initial evaluation, and office notes from all re-evaluations and/or follow up visits signed by each provider as well. The Plaintiff did not produce the documents requested at that time.

8. On May 29, 2015, Defendant received for the first time the Initial Exam Report from Tropical Chiropractic.

9. Upon receipt of the initial exam report from Tropical Chiropractic, Progressive issued payment up to $2,500 (the non-emergency medical condition policy limit). The bills received were paid in the order of receipt for services deemed compensable (in accordance with both policy limits and reasonableness, relatedness, and medical necessity). The payment was in accordance with the reimbursement limitations and payment methodologies contained in the policy of insurance, endorsement and Florida No-Fault Law, as amended.¹

10. On October 12, 2015, Progressive received another demand letter. Progressive in response to the subsequent demand letter issued payment in the amount of $860.00 to Stand-Up MRI after re-evaluating the charges and deeming the diagnostic study performed by Stand-Up MRI to be medically necessary. The amount of the payment was 80% of 200% of the Medicare Part B Fee Schedule in accordance with the policy.

11. On December 4, 2015, Progressive was served with a lawsuit from Tropical Chiropractic for dates of service, February 2, 2015 to April 30, 2015.²

12. On January 11, 2016, Progressive settled the lawsuit filed by Tropical Chiropractic in the amount of $6,639.70 (the remaining available benefits on the policy) thereby exhausting benefits. The settlement covered all dates of service billed by Tropical Chiropractic. Per Progressive’s calculations, the amount at issue allowed at Medicare Fee Schedule was $13,308.04. The amount of the settlement payment was substantially less than the amount due priced at 80% of 200% of the Medicare Part B Fee Schedule. Therefore, the payment is in accordance with the payment limitations contained in Progressive’s policy of insurance and endorsement.

13. All providers who had previously submitted claims and the policyholder were notified in the days following the payment on January 11, 2016 of the payment of the full $10,000 (i.e. benefits exhaustion). On January 19, 2016, Progressive was served with the Plaintiff’s lawsuit.

14. The Plaintiff’s Complaint does not contain allegations that Progressive acted in bad faith.

15. Defendant’s Answer and Affirmative Defenses denied that the Plaintiff’s services were reasonable and medically necessary and asserted that Progressive had paid out $10,000.00 to Eliana Campos various providers thereby exhausting PIP benefits on the policy of insurance.

16. It is undisputed that Plaintiff did not file an affidavit of the Dr. Rahat Faderani or other medical expert opining on the reasonableness and medical necessity of the services rendered by the Plaintiff to Eliana Campos.

17. It is undisputed that Plaintiff noticed and later cancelled the deposition of Defendant’s Corporate Representative, Michael Roth. It is undisputed that Plaintiff did not depose the litigation adjuster assigned to Plaintiff’s lawsuit.

18. In support of Defendant’s Motion for Final Summary Judgment and Motion in Opposition to Plaintiff’s Motion for Final Summary Judgment, Progressive filed the Affidavit of Heather Tenn and its Litigation Adjuster, Jesse Spinnato. Ms. Tenn testified that Tropical Chiropractic billed $17,100.00, that the allowed amounts for all dates of service based upon 200% of the Medicare Part B Fee Schedule was $13,308.04, that the amount at issue in the lawsuit for all charges priced at 200% of Medicare Part B fee schedule less the prior payment of $2,500.00 was $8,146.43 and that the Tropical Chiropractic agreed to accept the remaining PIP benefits of $6,639.70 to resolve all dates of service.

II.LEGAL ANALYSIS AND CONCLUSION

Rule 1.510(c) of the Florida Rules of Civil Procedure, a moving party is entitled to summary judgment if the “pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” On a motion for summary judgment, the moving party bears the burden of proving the non-existence of any genuine issue of material fact. Holl v. Talcott, 191 So.2d 40 (Fla. 1966); Harvey Bldg., Inc. v. Haley, 175 So.2d 780 (Fla. 1965); Connolly v. Sebecco, Inc., 89 So.2d 482 (Fla. 1956). The trial court must draw every possible inference in favor of the party against whom summary judgment is sought. If the evidence raises any issues of material fact, or of it is conflicting, or if it will permit different reasonable inferences, or if it tends to prove the issues, summary judgment cannot be granted. If the moving party meets its burden, then the burden shifts to the non-moving party to provide evidence sufficient to reveal a genuine and material disputed issue of fact. See id., at 43-44. It is not enough for the non-moving party opposing summary judgment to merely assert that an issue exists. Harvey Bldg., Inc., 175 So.2d at 783.

The issue before the Court in this case is whether the Defendant has properly exhausted benefits at the $10,000 policy limit therefore relieving the Defendant of having to pay additional amounts for dates of service at issue in this lawsuit.

Plaintiff now claims/alleges that: (1) Progressive acted in bad faith in how the initial $2,500.00 in benefits was paid because Defendant did not make said payments in accordance with the proper methodology for issuing payments and (2) that the subsequent “payments” to Stand-Up MRI and Tropical Chiropractic could not have exhausted the available benefits because the payments were gratuitous in nature and/or Defendant acted in bad faith because the payments were not made in accordance with the policy.

Defendant argues that it has properly exhausted the full $10,000 policy benefit in this instance via making payment for the same, and that: (1) bad faith was not plead in the instant Complaint and thus is not properly a part of the instant lawsuit, additionally, all of its actions were in good faith and Plaintiff has not produced evidence in opposition to this claim; (2) there are no gratuitous payments as all payments were made for compensable bills; and (3) all payments comply with Northwoods in that payments were made in the order of establishment of compensability under the underlying policy of insurance and in accordance with Fla. Stat. §627.736.

This Court is well aware of the authoritative decisions set forth in Simon v. Progressive, 919 So.2d 436 (4th DCA, 2005) [30 Fla. L. Weekly D1156b], Progressive American Insurance Company v. Stand-Up MRI of Orlando, 990 So.2d 3 (5th DCA, 2008) [33 Fla. L. Weekly D1746a], Sheldon v. United Services Automobile Association, 55 So.3d 593 (1st DCA 2010) [36 Fla. L. Weekly D23a], Geico Indemnity Company v. Gables Insurance Company a/a/o Rita Lauzan, 159 So.3d 151 (3rd DCA 2014) [39 Fla. L. Weekly D2561a] and Northwoods Sports Medicine and Physical Rehabilitation, Inc. and Wellness Associates of Florida Inc. v. State Farm Mutual Automobile Insurance Company and USAA Casualty Insurance Company, 137 So.3d 1049 (4th DCA 2014) [39 Fla. L. Weekly D491a]. The general rule is that once an insurance company has paid PIP bills up to the limits of the policy the insurance company has fulfilled its obligation to its insured under the policy and it is not liable to pay any further PIP benefits even those that are in dispute.

However, there are two recognized exceptions to this general rule where an insurance company may be responsible for payment in excess of policy limits. The first exception is when the insurance company has acted in “bad faith” in the handling of the claim. Northwoods, 137 So.3d 1049 (4th DCA 2014). The second exception is where an insurance company exhausts benefits by making gratuitous payments such as improperly paying untimely claims. See Coral Imaging Services a/a/o Virgilio Reyes v. Geico Indemnity Insurance Company, 955 So.2d 11 (3rd DCA 2006) [31 Fla. L. Weekly D2478a]. It is also clear that where the Defendant takes a legal stance which is not in opposition to established and controlling legal precedent (i.e. binding case law) even where the law subsequently establishes precedent in opposition to the Defendant’s position, this cannot be considered bad faith and does not create a gratuitous payment. Geico v. Gables Insurance Recovery, Inc. a/a/o Rita Lauzan, 159 So.3d 151 (3rd DCA 2014) [39 Fla. L. Weekly D2561a]. The Court finds that the facts and circumstances of this case do not meet any of the recognized exceptions to the general rule regarding exhaustion of benefits.

Valid claims are those that are reasonable in charge for a particular service, medically necessary to treat the patient’s condition/injuries and related to the subject motor vehicle accident. Derius v. Allstate Indemnity Co., 723 So.2d 271 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D1383a]. In the instant action, payments were made in the order in which compensability was established. Florida appellate courts have declined to create a requirement that the insurance company set aside a “reserve” fund for claims that are reduced or denied. Simon v. Progressive Express Ins. Co., 904 So.2d 449, 450 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]; accord Stand-Up MRI, 990 So.2d 3 at 5. According to the Fourth District Court of Appeal, imposing a “reserve” or “hold” requirement on a PIP insurer who reduced or denied a claim “would result in unreasonable exposure of the insurance company and would be to the detriment of the insured and other providers with properly submitted claims. Id. Furthermore, requiring insurers to allocate “reserve” funds for prospectively disputed claims would be contrary to the legislative intent of the PIP statute, which mandates prompt payment of medical bills. See Stand-Up MRI, 990 So.2d 3 at 6; Simon, 904 So.2d at 450.

Insurance companies are only obligated to pay reasonable expenses for medically necessary care. In order to activate the right to a claim for PIP payments under the assignment, the provider’s bills must be compensable under the statute in that they have been determined to be reasonable and necessary. Additionally, this Court finds that the bills must be compensable under the underlying policy of insurance. When the policy limits are in question or there is a good faith dispute as to whether the non-emergency medical condition policy limit $2,500 or emergency medical condition limit of $10,000 applies, compensability of the underlying bills under the policy in question has not been established.

Mr. Spinnato testified that the diagnostic treatment rendered by Stand-Up MRI were reconsidered and paid at 80% of 200% of the Medicare Part B Fee Schedule in response to a demand letter. Ms. Tenn testified that on December 14, 2015 she reconsidered Tropical Chiropractic’s charges, established the bills as compensable, did not make any determination as to the compensability of Plaintiffs’ bills (as she was solely assigned as the litigation adjuster for the Tropical lawsuit) and decided to resolve the Tropical lawsuit for the remaining benefits amount, which was less than the amount due in the Tropical lawsuit and thus in accordance with the payment limitations contained in the policy of insurance.

Plaintiff’s assignment of benefits from Eliana Campos does not provide standing to challenge Progressive’s determination that Stand-Up MR1 and Tropical Chiropractic bills were not reasonable as to the amount, related to the motor vehicle accident and medically necessary. See Susanti K. Chowdhury MD PA a/a/o Angela Hammel v. Progressive American Insurance Company, (Pinellas Cty. Ct. Judge Kathleen Hessinger, Oct. 10, 2016) [24 Fla. L. Weekly Supp. 691c] (holding Plaintiff lacks standing to argue whether the insurer should or should not have paid a PIP claim by the insured or another provider. Plaintiff argument is without merit as it would allow one medical provider to claim another medical provider’s treatment was not necessary thereby forcing the insurer and the other medical providers into litigation to prove every payment the insurer made to each provider was medically necessary. Plaintiff did not have a justiciable issue against the insurer once the PIP benefits were exhausted.)

For the reasons stated above, it is hereby ORDERED AND ADJUDGED as follows:

Plaintiff’s Motion for Final Summary Judgment is DENIED. Defendant’s Motion for Final Summary Judgment on Exhaustion is hereby GRANTED. Judgement entered in favor of the Defendant and the Plaintiff shall take nothing by this action and the Plaintiff shall go hence without a day. The Court reserves jurisdiction to determine Defendant’s request for 57.105 sanctions and attorney’s fees and costs.

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¹Plaintiff failed to submit a demand letter for date of service, June 30, 2015. Plaintiff failed to comply with a condition precedent to filing suit for date of service, June 30, 2015. Additionally, Plaintiff’s demand letter was prematurely submitted for date of service, May 21, 2015, as bill was submitted to Progressive on June 9, 2015 and the thirty day period for submitting a demand letter had not yet expired.

²Tropical Chiropractic sent a demand letter on June 29, 2015 for all dates of service submitted to Progressive for payment.