25 Fla. L. Weekly Supp. 857a

Online Reference: FLWSUPP 2510GABLInsurance — Personal injury protection — Coverage — Medical expenses — Reasonableness of charges — Trial court erred in entering summary judgment in favor of plaintiff on issue of reasonableness of charges where affidavit filed by plaintiff in support of motion was conclusory and failed to prove nonexistence of genuine issue of material fact — Even if plaintiff’s submission of medical bills satisfied its burden, entry of summary judgment was erroneous where affidavit of insurer’s expert showed possible existence of disputed issue of material fact — Trial court erred in excluding insurer’s affidavit where affiant qualified as expert and affidavit contained analysis comparing amounts billed to reimbursement levels in community and various state and federal medical fee schedules that satisfied criteria that expert use generally accepted scientific method and that opinion be product of reliable principles and methods — Trial court also erred in excluding affidavit on ground that affiant relied on Medicare fee schedules to analyze reasonableness of charges when insurer did not elect statutory fee schedule method of reimbursement in PIP policy — Although Medicare fee schedule cannot be used to conclusively determine reasonable amount of charges, PIP statute provides that federal fee schedules are relevant factor in determining reasonableness of charges

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. GABLES INSURANCE RECOVERY, INC., Appellee. Circuit Court, 11th Eleventh Judicial Circuit (Appellate) in and for Miami-Dade County. Case Nos. 15-301 & 302AP. L.T. Case Nos. 13-2646 SP 24 & 13-2647 SP 24. September 28, 2017. An appeal of a decision by the County Court in and for Miami-Dade County, Florida, Donald Cannava, Judge. Counsel: Nancy W. Gregoire, Birnbaum, Lippman & Gregoire, PLLC, Fort Lauderdale; and Luis N. Perez, Perez & Rodriguez, P.A., Coral Gables, for Appellant. Melissa L. Coyle, The Coyle Law Firm, P.A., Hollywood; and Marlene S. Reiss, Law Offices of Marlene S. Reiss, Esq., P.A., Miami, for Appellee.

[Cert. dismissed, 12-20-2017, 3DCA, Case No. 3D17-2311.]

(Before: THE HONORABLE JACQUELINE HOGAN SCOLA, ERIC W. HENDON, and JORGE E. CUETO, JJ.)

(PER CURIAM.) State Farm Mutual Automobile Insurance [State Farm] appeals a final summary judgment in the above-named case, and as detailed below, we reverse and remand the case for further proceedings. Specifically, we hold that Gables Insurance Recovery [GIR] submitted a conclusory affidavit and thus did not meet its summary judgment burden, and even if it did, State Farm’s rebuttal affidavit revealed a possible material fact dispute. GIR’s attorney fees motion is therefore denied, and State Farm’s motion for same is granted pending a favorable trial outcome on remand and that the trial court also finds the underlying settlement offer valid.

FACTS & PROCEDURAL HISTORY

The sole issue in this case is whether the medical fees GIR sent to State Farm were reasonable under section 627.736(5)(a)1, Florida Statutes (2008-2012) regarding the care provided to individuals injured in auto accidents. This law provided the following guidance on fee reasonableness:

With respect to a determination of whether a charge for a particular service, treatment, or otherwise is reasonable, consideration may be given to evidence of usual and customary charges and payments accepted by the provider involved in the dispute, and reimbursement levels in the community and various federal and state medical fee schedules applicable to automobile and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.

(Emphasis added). Reasonableness, in other words, “is a fact-dependent inquiry determined by consideration of various factors,” Geico Gen. Ins. Co. v. Virtual Imaging Servs., 141 So. 3d 147, 155-56 (Fla. 2013) [38 Fla. L. Weekly S517a];¹ and here, GIR moved for summary judgment on this matter.

To support its motion, GIR submitted the Affidavit of Sabino Ferro [Ferro Affidavit] and accompanying deposition. The documents state Ferro founded, and is the Senior Corporate Officer of, ALL X-RAY, a place used by GIR to take the patients’ x-rays; and he attested that his clinic’s charges were reasonable based on his familiarity with community charges and pre-2008 insurer reimbursements. His testimony revealed that he has over forty years of experience in the x-ray field, with degrees in administration, special x-ray techniques, medical teaching and imaging. Moreover, he attested to treating GIR’s patients on December 17, 2008 and sending the bill to State Farm, which issued a partial payment. However, between 2005 and 2008, he had not received less than 80% of the amount billed, and the prices charged were set in accordance with a 2005 comparison he did of other x-ray providers in the Homestead to Miami Lakes area. These other places, though, were not identified, nor were their rates attached to the affidavit as an exhibit. He also stated that in determining fee reasonableness, Ferro considers facility overhead costs such as those related to the x-ray machine and qualified personnel. Furthermore, he admitted that he has not done any inquiry or comparison of community charges since 2005, and that he accepts Medicare and Florida’s Worker Compensation reimbursements.

In rebuttal, State Farm filed the Affidavit of Darrell Spell [Spell Affidavit]. Spell possesses bachelor’s and master’s degrees in mathematics and has worked in the health insurance field since 1982 as a consulting actuary that evaluates medical service costs. He stated that he has provided actuarial services to Blue Cross/Blue Shield, corporations like Ford and GIR, life insurance companies, state insurance departments, and the U.S. Department of Health and Human Services. He has also examined the rates of Medicaid, Medicare Part B, and Workers Compensation, which are usually a percentage of Medicare. Spell attached numerous records to his affidavit attempting to justify the reduction in fees, and his analysis shows that GIR’s rates not only exceeded the 90th percentile of reimbursements for the same services in the community, they exceeded Medicare by 1058-1209%, and Florida’s Worker Compensation rates by 962-1094%.

At the hearing, the trial judge granted GIR’s motion on the basis that the Ferro Affidavit provided prima facie evidence of price reasonableness that was unrebutted by the Spell Affidavit because Spell failed to satisfy section 90.702, Florida Statutes (Daubert). The trial judge also found Spell impermissibly relied on the Medicare Part B fee schedule because State Farm did not inform GIR. that it would utilize section 627.736(5)(a)2’s reimbursement methodology.² This appeal followed.

STANDARD OF REVIEW

“Summary judgment is proper if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law. Thus, our standard of review is de novo.” Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000) [25 Fla. L. Weekly S390a]. “In reviewing a summary judgment, this Court ‘must consider the evidence contained in the record, [such as the pleadings, depositions, answers to interrogatories,] any supporting affidavits [as well as the evidence’s reasonable inferences], in the light most favorable to the non-moving party . . . and if the slightest doubt exists [as to whether there is, or possibly is, a material fact dispute], the summary judgment must be reversed.’ ” Tropical Glass & Const. Co. v. Gitlin, 13 So. 3d 156, 158 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D1163a] (internal citation omitted); Moore v. Morris, 475 So. 2d 666 (Fla. 1985).

In seeking summary judgment, the movant bears the burden of proving the non-existence of genuine triable issues, and the non-moving party need not prove otherwise until said burden is met. Holl v. Talcott, 191 So. 2d 40, 43 (Fla. 1966). However, if the movant presents “competent record evidence,” “the opposing party must come forward with counter-evidence sufficient to reveal a genuine issue.” Johnson v. Gulf Life Ins. Co., 429 So. 2d 744, 746 (Fla. 3d DCA 1983). Summary judgment cannot be defeated if “the opposing party merely [asserts] that an issue does exist, or [raises] paper issues.” Id. The evidence must instead be conflicting, permit different reasonable inferences, or tend to prove the issues. Albelo v. S. Bell, 682 So. 2d 1126, 1129 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D2165a]. When deciding summary judgment, a court cannot weigh the evidence or assess a witness’ credibility. Hernandez v. United Auto. Ins. Co., Inc., 730 So. 2d 344, 345 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D646a]. Courts must also “take a strict reading of the papers filed by the moving party and a liberal reading and construction of the paper filed by the opposing party.” Swift Indep. Packing Co. v. Basic Food Intern., Inc., 461 So. 2d 1017, 1018 (Fla. 4th DCA 1984); State Farm Mut. Auto. Ins. Co. v. St. Jude Rehab. Ctr., 22 Fla. L. Weekly. Supp. 52c (Fla. 11th Cir. Ct. 2014).

DISCUSSION

Reasonableness

State Farm argues that even in the absence of contradictory evidence, price reasonableness cannot be decide at summary judgment because it is a fact-based determination and thus must always be resolved by a jury. However, all but two of State Farm’s cited cases for this proposition involve appeals from a final judgment or jury verdict, rather than a summary judgment, and are therefore distinguishable. See, e.g., Garrett v. Morris Kirschman & Co., Inc., 336 So. 2d 566, 571 (Fla. 1976).³ Moreover, State Farm’s claim conflicts with the plain language of Florida Civil Procedure Rule 1.510(a), which permits “[a] party seeking to recover on a claim . . . [to] move for a summary judgment . . . on all or any part thereof.” “All or any” inherently includes reasonableness, and thus, it cannot be said that reasonableness can only be resolved by a jury. Nevertheless, the fact-specific nature of a reasonableness determination generally makes it a jury question. See State Farm Mut. Auto. Ins. Co. v. Sunset Chiropractic & Wellness, 24 Fla. L. Weekly Supp. 787a (Fla. 11th Cir. Ct. 2017) (stating that reasonableness “is generally a factual issue ripe for determination by a jury”).

Sufficiency of Provider’s Summary Judgment Evidence

State Farm properly contests the finding that the Ferro Affidavit satisfied GIR’s duty to show no material fact dispute on the reasonableness of its prices. Florida Civil Procedure Rule 1.510(e) requires that affidavits submitted to satisfy a movant’s burden in summary judgment proceedings:

[M]ust be made on personal knowledge, must set forth such facts as would be admissible in evidence, and must show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all documents or parts thereof referred to in the affidavit must be attached thereto or served therewith. The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits.

In his affidavit, Ferro attests to having personal knowledge of his clinic’s bills, but he merely asserts the charges are “reasonable” and in line with communal charges based on a survey he performed several years earlier. The survey, however, was not attached to his affidavit as an exhibit. Furthermore, Ferro did not identify the places he reviewed, state his competition’s prices, or elaborate upon how he conducted the survey. The Ferro Affidavit is thus conclusory, and “general statements in an affidavit which are framed in terms only of conclusions of law do not satisfy a movant’s burden of proving the nonexistence of a genuine material fact issue.” Heitmeyer v. Sasser, 664 So. 2d 358, 360 (Fla. 4th DCA 1995) [21 Fla. L. Weekly D39a].

State Farm’s Rebuttal Evidence

It has been held that a prima facie showing of reasonableness can be made by merely presenting the medical bills with testimony that services were provided to the patient. See A.J. v. State, 677 So. 2d 935, 937 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D1677e]. Given that GIR’s affidavit crosses that threshold, State Farm had to show the possible existence of a material fact dispute, which the Spell Affidavit establishes especially when construed liberally as is required. However, the trial court erroneously excluded this document on the basis that 1) Spell did not qualify as an expert under section 90.702, Florida Statutes; and 2) State Farm could not use the Medicare Part B fee schedules to reduce reimbursement rates without notifying GIR in advance.⁴

Section 90.702, Florida Statutes (Daubert)

Based on the criteria set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and Kumho Tire Company, Ltd. v. Carmichael, 526 U.S. 137 (1999), section 90.702 governs the admissibility of expert testimony that will help the court understand the evidence or determine a fact issue. It states that “a witness qualified as an expert by knowledge, skill, training, or education may testify about it in the form of an opinion or otherwise if: 1) [t]he testimony is based upon sufficient facts or data; 2) [t]he testimony is the product of reliable principles and methods; and 3) [t]he witness has applied the principles and methods reliably to the facts of the case.” This test makes trial courts the “gatekeepers” against “speculative, unreliable expert testimony” based on any type of “scientific, technical, or other specialized knowledge,” and when screening said evidence, the courts weigh factors such as (1) whether the expert’s theory can be and has been tested; (2) if the theory has been subjected to peer review and publication; (3) the technique’s known or potential error rate; and (4) whether the technique is generally accepted in the scientific community. Kumho, 526 U.S. at 147; Kilpatrick v. Breg, Inc., 613 F.3d 1329, 1335 (11th Cir. 2010) [22 Fla. L. Weekly Fed. C1322b] .

The Spell Affidavit contains enough information to pass this test and show the possible existence of a material fact dispute. For instance, it states that Spell has been working in the area of health insurance since 1982 as a consulting actuary evaluating expected costs of medical services and reviewing and analyzing medical charges from a number of different sources. Although he admits his data did not consider PIP information or usual and customary prices, the document contains information on reimbursement levels in the community and various federal and state medical fee schedules applicable to automobile and other insurance coverages such as Medicare, Florida’s Worker’s Comp, and New Jersey’s physician fee schedule. Given that section 627.736(5)(a)1 allows for this information to be considered when determining reasonableness, the Spell Affidavit is based on sufficient facts and data for section 90.702’s purposes. Moreover, since federal and state fee schedules are published by the government, i.e. a non-party to this action, Spell’s information is a “product of reliable principles and methods,” and this methodology was reliably applied to the facts of the case. Specifically, as permitted by section 627.736(5)(a)1, Spell analytically compared the amounts GIR billed and the amounts State, Farm paid with the aforementioned sources, and each comparison showed that GIR’s charges exceeded the amounts reimbursed in the community and the relevant fee schedule rates. Spell’s results can clearly be tested, but they presumably have a low potential error rate, and comparisons are a generally accepted scientific method.

The trial court should not have rejected the Spell Affidavit because “a court may neither adjudge the credibility of the witnesses nor weigh the evidence” when ruling on a summary judgment motion. Hernandez, 730 So. 2d at 345 (Fla. 3d DCA 1999). Similarly, a court must not conflate the question of admissibility with the weight of the proffered testimony when determining if expert testimony is admissible. Rosenfeld v. Oceania Cruises, Inc., 654 F.3d 1190, 1193 (11th Cir. 2011) [23 Fla. L. Weekly Fed. C366a]; Taylor v. Novartis Pharmaceuticals Corp, 2013 WL 85168 (S.D. Fla. 2013) (“[A]s a general rule, questions relating to the bases and sources of an expert’s opinion affect the weight to be assigned that opinion rather than its admissibility and should be left or the jury’s consideration.”) (internal quotations and citations omitted); Univ. of Florida Bd. of Trustees v. Stone, 92 So. 3d 264, 272 (Fla. 1st DCA 2012) [37 Fla. L. Weekly D1476a] (“Although the trial court has considerable discretion in determining whether an expert is qualified to render an opinion, the court should not exclude the expert’s opinion based on matters that go to the weight of the opinion because it is the exclusive province of the jury to weigh the evidence.”). The evidence’s persuasiveness should instead be attacked at trial through “traditional and appropriate means” such as “vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof.” Rosenfeld, 654 F.3d at 1193 (internal quotations and citations omitted).

Reliance on Medicare Part B & Notice Requirement

The trial court also rejected the Spell Affidavit on the basis that State Farm was attempting to circumvent Florida law and exclusively use Medicare fee schedules to reduce provider reimbursement rates without prior notice. This finding, however, is incorrect. In Geico Ins. Co. v. Virtual Imaging Servs., the Florida Supreme Court held that section 627.736 provides two methods for determining if a medical bill is reasonable: 1) subsection (5)(a)1, which creates a fact-dependent analysis that allows various factors to be considered such as usual and customary charges and payments accepted and federal/state fee schedules; or 2) subsection (5)(a)2, which determines reasonableness via reference to the Medicare fee schedules. 141 So. 3d 147, 155-56 (Fla. 2013) [38 Fla. L. Weekly S517a]. Under the first methodology, the insured can challenge the reasonableness of a provider’s bills, and the provider can sue an insurer if it refuses to pay the medical expenses it believes are reasonable. See State Farm Mut. Auto. Ins. Co. v. Sestile, 821 So. 2d 1244, 1246 (Fla. 2d DCA 2002) [27 Fla. L. Weekly D1757a]. In contrast, under the second method, the insurer is immune from suit on the reasonableness issue because it is legally determined. See Geico, 141 So. 3d at 155-57. An insurer, though, cannot use this methodology unless it clearly notified the providers that they will be reimbursed according to subsection (5)(a)2. Id. at 150.

An insurer’s failure to expressly elect the second methodology does not mean that the Medicare Part B fee schedules are irrelevant when determining reasonableness under subsection 5(a)1 because as noted above, the statute states that federal fee schedules are a relevant factor to consider, and Medicare is the epitome of such schedules. Comparing a provider’s charges to Medicare is also permissible because this statute allows for any of its listed factors to be considered. In other words, an insurer’s failure to expressly elect the section 627.736(5)(a)2 formula just means that the Medicare Part B schedule cannot be used to conclusively determine a reasonable amount for fees. Instead, the fee schedule is just a basis that an insurer can use to challenge the reasonableness of the provider’s bill. See Progressive Select Ins. Co. v. Emergency Physicians of Cent. Florida, LLP, 202 So. 3d 437, 438 (Fla. 5th DCA 2016) [41 Fla. L. Weekly D2145a] (“Nonetheless, despite [its] failure to elect to use the fee schedule limitation in its policy, [the insurer] is not precluded from having an opportunity to litigate the reasonableness of [the provider’s] bill under section 627.736(5)(a)1., Florida Statutes (2008).”); State Farm Mut. Auto. Ins. Co. v. Health & Wellness Assocs., Inc., 25 Fla. L. Weekly Supp. 220a (Fla. 11th Cir. Ct. 2017). It, after all, is possible that “payment under section 627.736(5)(a)2 could . . . satisfy the PIP statute’s basic ‘reasonable expenses’ coverage mandate, set forth in section 627.736(1).” Geico, 141 So. 3d at 157. Case law finding Medicare irrelevant to the reasonableness debate is outdated because it pre-dates the 2008 legislative changes to the PIP statute that made federal fee schedules a relevant factor. See, e.g., Atkins v. Allstate Ins. Co., 382 So. 2d 1276, 1278 (Fla. 3d DCA 1980) (“Medicare is a social welfare program and not an insurance or reimbursement plan within the everyday and ordinary meaning of those terms.”) (internal citation and quotation omitted); Hialeah Med. Assoc., Inc. a/a/o Lezcano v. United Auto Ins. Co., 21 Fla. L. Weekly Supp. 487b (Fla. 11th Cir. March 7, 2014).⁵

Accordingly, for the reasons articulated above, the order below is reversed, and the case remanded for further proceedings.

MOTIONS FOR ATTORNEY’S FEES

Per Florida Appellate Procedure Rule 9.400, both parties have moved for attorney’s fees and costs as this rule authorizes the prevailing party on appeal to recover these expenses. The statutory basis for State Farm’s motion is section 768.79, Florida Statutes, while GIR relies on section 627.428(1). Given the above holding, GIR’s motion is DENIED and State Farm’s conditionally GRANTED pending a favorable trial outcome on remand. See USAA Cas. Ins. Co. v. American MRI, LLC, 19 Fla. L. Weekly Supp. 534a (Fla. 11th Cir. Ct. 2012). However, GIR contends that State Farm’s underlying settlement offer is invalid because it did not state “whether attorneys’ fees are part of the legal claim” as is required by Florida Civil Procedure Rule 1.442. See Deer Valley Realty, Inc. v. SB Hotel Assocs. LLC, 190 So. 3d 203, 207 (Fla. 4th DCA 2016) [41 Fla. L. Weekly D1036a] (holding that failure to strictly comply with Rule 1.442 renders a settlement proposal “invalid and unenforceable”). Thus, State Farm’s motion is GRANTED on the condition that the trial court also finds the settlement offer valid.

REVERSED AND REMANDED FOR PROCEEDINGS CONSISTENT WITH THIS OPINION; APPELLANT’S MOTION FOR ATTORNEY FEES CONDITIONALLY GRANTED; APPELLEE’S MOTION FOR SAME DENIED.

__________________

¹Though not applicable, section 627.736(5)(a)2 enables insurers to avoid this fact intensive review by “clearly and unambiguously” notifying providers that they will only reimburse 80% of 200% of Medicare Part B fee schedule. See Geico, 141 So. 3d at 155-57. Under this methodology, reasonableness is legally determined, and thus, insurers are immune from suit on this issue. See id.

²Geico, 141 So. 3d at 147 (holding that insurers must “give notice to the insured before using Medicare fee schedules to limit reimbursement for medical services” to 80% of 200% of Medicare Part B).

³The remaining two — Geico, 141 So. 3d 147 at 152 and Hyder v. Dempsey & Goldsmith, P.A., 497 So. 2d 984 (Fla. 5th DCA 1986) — are also inapplicable because in the former case, the parties made stipulations on the facts, and in the latter, there were disputed material facts.

⁴It is noted that the Spell Affidavit has been rejected by many county and circuit appellate panels. See, e.g., Fla. Wellness and Rehabilitation Ctr., Inc. v. State Farm Mut. Auto Ins. Co., 23 Fla. L. Weekly Supp. 88a (Fla. 17th Cir. Ct. 2015); State Farm Mut. Auto. Ins. Co. v. Imaging Ctr. of Pensacola, Inc., 21 Fla. L. Weekly Supp. 979a (Fla. 1st Cir. Ct. App. 2014); State Farm Mut. Auto. Ins. Co. v. New Smyrna Imaging, LLC, 22 Fla. L. Weekly Supp. 508a (Fla. 7th Cir. Ct. App. 2014). However, these cases are not binding on this Court, State v. Lopez, 633 So. 2d 1150, 1151 (Fla. 5th DCA 1994); and based on the reasoning below, they are distinguishable. Relatedly, the Fourth DCA’s Spell Affidavit commentary in State Farm Mut. Auto. Ins. Co. v. Pembroke Pines MRI, Inc., 171 So. 3d 814, 817 n.2 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1879a] is dicta.

⁵As noted above, Lezcano is not binding on this circuit. Lopez, 633 So. 2d at 1151. Nevertheless, the case is distinguishable because it involved a 2008 accident that was covered under a 2007 policy. The opinion does state that “Medicare Fee Schedules are not relevant in PIP cases, and should not be used,” but before concluding that the insurer was prohibited from using the 2008 fee schedule, it notes that 1) the 2008 amendments allow the use of such fee schedules, and 2) the insurance policy at issue was issued prior to the change in the law.