25 Fla. L. Weekly Supp. 371a

Online Reference: FLWSUPP 2504MFERInsurance — Personal injury protection — Deductible — Insurer properly applied policy deductible to reasonable covered expenses calculated pursuant to fee schedules and was not required to apply deductible first against amount billed for services rendered before applying the fee schedules — Legislature’s failure to enact proposed amendments to section 627.739(2) in 2016 did not illustrate Legislature’s intent to disallow insurers from applying deductible to the “covered” amount

FLORIDA WELLNESS & REHAB CENTER OF FIU ETC (Patient: Manuel Angel Fernandez), Plaintiff, v. ALLSTATE PROPERTY & CASUALTY INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 2011-16420-CC-05. August 10, 2017. Ivonne Cuesta, Judge. Counsel: Stuart L. Koenigsberg, A Able Advocates, for Plaintiff. Gladys Perez Villanueva, Shutts & Bowen, for Defendant.

ORDER GRANTING DEFENDANT’S MOTION FORSUMMARY JUDGMENT AND DENYING PLAINTIFF’SMOTION FOR SUMMARY JUDGMENT

This matter came before the Court upon the above parties’ Cross Motions for Summary Judgment. Plaintiff, Florida Wellness & Rehab Center of FIU, was represented by Stuart Koenigsberg, Esq. of A Able Advocates, and Defendant, Allstate Property & Casualty Insurance Company, was represented by Gladys Perez Villanueva of Shutts & Bowen. The Court, having heard argument of the Parties on the 3rd day of August, 2017, and being otherwise duly advised in the matter, GRANTS Allstate’s Motion for Summary Judgment and DENIES Plaintiff’s Motion for Summary Judgment in the above case, and makes the following findings of fact and conclusions of law.Material Facts

This lawsuit arises out of a claim for PIP benefits. Plaintiff’s bills totaled $9,950.00. Allstate, in order to determine the amount of PIP benefits payable to Plaintiff, initially determined the covered reasonable expenses (i.e., the “covered amount”) pursuant to the fee schedules and Allstate’s Policy. For the treatment and services rendered to Claimant and at issue in this case, the covered amount calculated pursuant to the fee schedules totaled $5,267.44. Allstate next subtracted the $1,000.00 policy deductible from 100 percent of this covered amount. Allstate then calculated payment to the Plaintiff based upon 80 percent of the remaining covered amount after subtraction of the deductible. Accordingly, Allstate calculated its reimbursement to Plaintiff as follows: $5,267.44 (covered amount as determined by application of applicable fee schedule) – $1,000.00 (policy deductible) = $4,267.44 x 80% = $3,413.97 benefits payment made by Allstate.Standard for Summary Judgment

Summary judgment is appropriate where the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits conclusively establish that there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fla. R. Civ. P 1.510. “Summary judgment is designed to test the sufficiency of the evidence to determine if there is sufficient evidence at issue to justify a trial or formal hearing on the issues raised in the pleadings.” The Florida Bar v. Greene, 926 So. 2d 1195, 1200 (Fla. 2006) [31 Fla. L. Weekly S171a]; see also Mendez v. West Gables Rehabilitation Hosp., LLC123 So. 3d 1178, 1180 (Fla. 3DCA 2013) [38 Fla. L. Weekly D2004a]. Summary judgment should be granted once the moving party demonstrates that the undisputed facts conclusively establish that the opposing party cannot prevail. Florida E. Coast R. Co. v. Metropolitan Dade County, 438 So. 2d 978 (Fla. 3d DCA 1983). Because there are no genuine issues of material fact and all that remain are issues of law, this case is properly disposed of via summary judgment. See Moore v. Morris, 475 So. 2d 666, 668 (Fla.1985).

Application of the Deductible to reasonable covered expenses as calculated pursuant to the fee schedules

Allstate properly applied the policy deductible to Plaintiff’s reasonable covered expenses calculated pursuant to the fee schedules¹ and was not required to apply the deductible first against the amount billed for services rendered before applying the fee schedules. The plain language of the deductible statute, section 627.739(2), Florida Statutes, compels this conclusion:

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 amount is met, each insured is eligible to receive up to $10,000 in total benefits described in s. 627.736(1).

“Expenses” described in section 627.736 relating to medical benefits are “reasonable expenses for medically necessary services”:

Medical Benefits — Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services. . .

Fla. Stat. § 627.736(1)(a)(emphasis added). The only possible conclusion from reading the statute is that the “expenses” to which the deductible applies pursuant to section 627.739(2) are the “reasonable expenses” referred to in section 627.736(1)(a), and not the provider’s charged amount.

Plaintiff incorrectly interprets section 627.739(2) to mean that the deductible applies to 100 percent of any amount it chooses to bill.² Florida’s Personal Injury Protection statute has, “[s]ince its inception in 1971. . . required insurers to provide coverage for reasonable expenses for necessary medical services.” See Geico Gen. Ins. Co. v. Virtual Imaging Ser., 141 So. 3d 147, 153 (Fla. 2013) [38 Fla. L. Weekly S517a] (citing section 627.736(1)(a), Florida Statutes (1971)) (emphasis added). The insurer is not liable for medical expenses that are not reasonable. Expenses that are not reasonable are not covered under the policy. Therefore, any deductible could only possibly apply to expenses actually covered by the policy. See Gen. Star Indem. Co. v. West Florida Village Inn, Inc., 874 So. 2d 26, 33 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D1070b]. (“The notion that a deductible could be applied to a loss that is not covered by the policy is fundamentally unreasonable.”).

Plaintiff’s position ignores the words “described in s. 627.736” in stating that the deductible must be applied to 100 percent of billed amount. The deductible statute requires the “expenses and losses” to be those “described in s. 627.736.” The only “expenses” described in section 627.736 relating to medical benefits are “reasonable expenses.” Accordingly, only those “expenses and losses” that are reasonable expenses and losses (hence, covered) as permitted by Florida’s No-Fault law, are applied to the deductible. And, pursuant to the Florida Supreme Court’s decision in Virtual III, when an insurer elects to reimburse under PIP coverage pursuant to the fee schedules, the fee schedule amount is per se the reasonable. Accordingly, when an insurer elects to reimburse under PIP coverage pursuant to the fee schedules, the fee schedule amount is per se the reasonable expense “described in s. 627.736” to which the deductible applies.

This Court agrees with Bethesda Memorial Hospital (a/a/o Markeith Donnally) v. GEICO General Insurance Co., Case No. 14-4553 COCE (53) (Fla. Broward Cty. April 14, 2015) [22 Fla. L. Weekly Supp. 1097a], wherein Judge Robert W. Lee recognized that the trial courts were split, but believed the Eighteenth Circuit’s appellate decision of Garrison Property was better reasoned. In Garrison Property & Casualty Insurance Company v. New Symrna Imaging, LLC, Case No. 13-03-AP (18th Cir. App. 2015) [23 Fla. L. Weekly Supp. 708a], the Appellate Division of the Circuit Court for the Eighteenth Judicial Circuit reversed the trial court’s grant of summary judgment for the provider and held that sections 627.739(2) and 627.736, when read together as required lead to the conclusion that 100 percent of the deductible must be applied against the reasonable and necessary medical expenses, i.e., those covered by the policy. Further, the court made clear that where an insurer has properly elected the fee schedule limitations, the deductible must be applied against 100 percent of the fee schedule amounts.Application of Deductible has not changed.

Finally, this Court disagrees that the Legislature’s failure to enact proposed amendments to section 627.739(2), Florida Statutes, in 2016 illustrates the Legislature’s intent to disallow insurers to apply the deductible to the “covered” amount — meaning “reasonable expenses.” Initially, this Court notes that to attempt to derive any intent from the Legislature’s failure to enact a statutory provision is mere speculation.

Plaintiff’s argument fails, however, because the application of the deductible has not changed by enactment or utilization of fee schedules. The deductible in Personal Injury Protection cases is always applied to the “reasonable medical expenses.” In PIP cases, where the policy did not specifically elect the fee schedules, the jury determines the reasonable amount of medically necessary expenses. Once the jury’s determination is made, the application of the deductible is a “fairly straightforward exercise” by the trial judge. See United Automobile Insurance Company v. Niurka Garcia, Case No. 12-276 AP (Fla. 11th Cir. Apr. 14, 2014) [21 Fla. L. Weekly Supp. 625a]; see also Hannah v. Newkirk, 675 So. 2d 112 (Fla. 1996) [21 Fla. L. Weekly S243a]. Moreover, the notes in 413.4 Florida Standard Jury Instruction for Personal Injury Protection promulgated by the Florida Supreme Court provides:

This instruction assumes that the jury will be asked to decide the total amount of medical charges. It is anticipated that the judge will adjust this award in entering the judgment to account for any payments previously made by the insurer, as well as for the effect of the 80% limitation in F.S. 627.736(1)(a), and any deductible.

(Emphasis added). Thus, it is clear that the deductible is applied once the determination of reasonableness is made, either by the fact finder or by reference to the “alternative mechanism for determining reasonableness by reference to the fee schedules,” depending on the policy. See Virtual Imaging Ser., 141 So. 3d at 156. The application of the deductible always requires the determination of reasonableness as a first step, which is appropriate since only those bills that are reasonable, related, and necessary are compensable under Florida’s No-Fault statute. No clarification by the Legislature was necessary.Plaintiff’s Objection to the Affidavit of Christine Spisak

Towards the conclusion of the hearing on the Motions for Summary Judgment, Plaintiff made a general objection to the sufficiency of Ms. Spisak’s affidavit based on hearsay grounds. Plaintiff challenged the sufficiency of Ms. Spisak’s testimony in paragraph one of her affidavit under the business records exception to the hearsay rule. The Court finds that the objection was vague and general in nature and lacks the required specificity under the law. Furthermore, Ms. Spisak is the Litigation Adjuster for this particular claim. She is a fact witness (not a records custodian or an expert witness) who has particularized knowledge to testify about how the Insurer adjusted the claim and how the deductible was applied. Her testimony is not hearsay.

IT IS HEREBY ORDERED AND ADJUDGED that Defendant’s motion for summary judgment is GRANTED; Plaintiff’s motion for summary judgment is DENIED.

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¹See Allstate Insurance Company v. Orthopedic Specialists, 212 So. 3d 973 (Fla. Jan. 26, 2017) [42 Fla. L. Weekly S38a] (upholding the decisions of the First, Second, and Third District Courts of Appeal, and holding that “Allstate’s policy provided legally sufficient notice of Allstate’s election to use the permissive Medicare fee schedules identified in section 627.736(5)(a)2. to limit reimbursements”).

²This court finds that the case of Mercury Ins. Co. of Fla. v. Emergency Physicians of Central, 182 So. 3d 661 (Fla. 5th DCA 2015) [40 Fla. L. Weekly D2364a], cited by Plaintiff, is inapposite and therefore not binding.