25 Fla. L. Weekly Supp. 580a
Online Reference: FLWSUPP 2507ALEXInsurance — Personal injury protection — Coverage — Medical expenses — Insurer who based its payment to provider on statutory fee schedule, although insurance policy did not give notice of insurer’s election to use fee schedule, was not precluded from litigating reasonableness of provider’s bill for MRI — Opposing affidavits submitted by provider and insurer raised genuine issue of material fact with respect to reasonableness of bill
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. PAN AM DIAGNOSTIC SERVICES, INC., a/a/o Jean Alexandre, Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. 2015-CV-000125-A-O. L.T. L.T. Case No.: 2013-SC-009112-O. March 23, 2017. Appeal from the County Court, for Orange County, Steve Jewett, County Judge. Counsel: Nancy W. Gregoire, Birnbaum, Lippman & Gregoire, PLLC, Fort Lauderdale, for Appellant. Robert J. Hauser, Pankauski Hauser, PLLC, West Palm Beach, for Appellee.
[Lower court order published at 23 Fla. L. Weekly Supp. 759b.]
[Opinion on remand 26 Fla. L. Weekly Supp. 761a]
(Before SCHRIEBER, J. RODRIGUEZ, and CARSTEN, JJ.)
(PER CURIAM.) In this PIP case, State Farm Mutual Auto Insurance Co. (State Farm), the Defendant below, timely appeals the trial court’s Order Granting Plaintiff’s Motion for Final Summary Judgment and Denying Defendant’s Motion for Final Summary Judgment, rendered on November 19, 2015, which was entered in favor of Pan Am Diagnostic Services, Inc. (Pan Am), the Plaintiff below.1 We reverse.
Facts
Jean Alexandre, the insured, was involved in an automobile accident. At the time of the accident, Alexandre was covered under an automobile insurance policy issued by State Farm. He received a lumbar MRI from Pan Am, and assigned his automobile insurance benefits to Pan Am, which then billed State Farm $2,150 for the MRI.
State Farm in its explanation of review (EOR) determined that the reasonable expense for Pan Am’s MRI did not exceed $1,066.28. Thus, State Farm paid Pan Am PIP benefits of $868.87, which represented $853.02 (80% of $1,066.28) plus $15.85 interest. State Farm relied on the statutory fee schedule in limiting the reimbursement to $1,066.28, as its EOR further explained that the reimbursement was “based upon 200% of the 2007 Participating Level of Medicare physician fee schedule for the locale in which the services were rendered.” However, the insurance policy did not state that State Farm would limit its PIP reimbursement to 200% of the Medicare fee schedule. Rather, the policy stated that State Farm would pay “80% of the reasonable charges incurred for necessary” medical expenses.
Pan Am filed suit2 to recover additional PIP benefits based on its $2,150 charge for the MRI, claiming that State Farm should have paid 80% of $2,150 or $1720. State Farm answered the complaint and denied any obligation to Pan Am beyond the $868.87 it had already paid.
Both parties moved for summary final judgment. Pan Am’s motion for summary final judgment argued that State Farm was not entitled to rely on the fee schedule in paying for the MRI when its policy stated that reimbursements would be “based on 80% of the reasonable charges incurred.” Pan Am also filed an affidavit from its owner and director Roberta Kahana, who opined that the $2,150 MRI charge was reasonable based on her experience in the health care industry for as an MRI facility owner and chief operating officer, familiarity with usual and customary charges for MRI’s, amounts reimbursed by different insurance companies, and review of the Ingenix National Fee Analyzer database. According to Kahana, a “wide variety of insurers,” including Allstate, Geico, Progressive, Travelers, United, Farmers, and State Farm, have all paid 80% of $2,150 for MRI’s.
State Farm’s motion for summary final judgment argued that Kahana’s opinion on the reasonableness of Pan Am’s charge did not constitute admissible evidence. Rather, according to State Farm, the “only competent admissible evidence” on the issue of reasonableness was the opinion of radiologist Dr. Michael J. Foley, who stated in his affidavit that he has extensive knowledge and experience in setting pricing guidelines for MRI/radiological facilities. According to Dr. Foley, a reasonable reimbursement for the lumbar MRI performed by Pan Am “would be 100% of what Medicare pays, or $533.14.” Also according to Dr. Foley, Pan Am’s charge of $2,150 was “more than four times (or 400%) of a reasonable amount, so Pan Am’s charge was “excessive and unreasonable.” Finally, Dr. Foley opined that State Farm’s payment of $853.02 was “more than a reasonable amount to pay.”
After conducting a hearing on the competing motions for summary final judgment, the trial court entered its Order Granting Plaintiff’s Motion for Final Summary Judgment and Denying Defendant’s Motion for Final Summary Judgment. According to the court, the parties agreed that the only issue for the court to decide was whether the $2150 charge for the MRI was reasonable. The court found that Kahana’s affidavit constituted “admissible evidence that [Pan Am’s] charge was reasonable and that Pan Am “carried its burden of proof.” The court then held that the reasonableness of Pan Am’s charge was “not an issue to be considered because [Sate Farm] breached the policy at issue as a matter of law.” For support, the court cited to this court’s decision in Progressive American Insurance Co. v. Emergency Physicians of Central Fla. a/a/o Williams, No. 2014-CV-000079-A-O (Fla. 9th Cir. Ct. Sept. 24, 2015) [22 Fla. L. Weekly Supp. 728c], quashed on other grounds, 186 So. 3d 1136 (Fla. 5th DCA 2016) [41 Fla. L. Weekly D714a]. According to Progressive American, the “insurer has already conceded reasonableness in paying pursuant to the fee schedule so it may not thereafter contest reasonableness.” The court determined that in view of Progressive American, it did not need to consider the sufficiency of Dr. Foley’s affidavit as “countervailing summary judgment evidence.” The court went on to enter judgment in favor of Pan Am for $866.98.
Standard of Review
Because the material facts are not in dispute, and the instant case presents only questions of law, the standard of review governing the trial court’s Order Granting Plaintiff’s Motion for Final Summary Judgment and Denying Defendant’s Motion for Final Summary Judgment is de novo. See Major League Baseball v. Morsani, 790 So. 2d 1071, 1074 (Fla. 2001) [26 Fla. L. Weekly S465a]; Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000) [25 Fla. L. Weekly S390a].Analysis
On appeal, State Farm argues that the trial court erred in ruling as a matter of law on the reasonableness of Pan Am’s MRI charge. State Farm claims that notwithstanding its reliance on the statutory fee schedule, it was still entitled to challenge the reasonableness of the MRI charge. State Farm is correct, in light of Progressive Select Insurance Co. v. Emergency Physicians of Central Fla., 202 So. 3d 437 (Fla. 5th DCA 2016) [41 Fla. L. Weekly D2145a], which was decided during this pendency of this appeal but well after this Court’s decision in Progressive American and the trial court’s ruling in reliance on Progressive American.
In Progressive Select, the provider EPCF billed Progressive Select for medical services it had rendered to the insureds. The reimbursements were reduced to 80% of 200% of the allowable amount under the Medicare Part B fee schedule. EPCF then brought suit for additional payment. The trial court granted summary judgment in favor of EPCF, finding that Progressive Select had improperly used the fee schedule in paying the billed amounts. On appeal, the circuit court found that Progressive Select should have “clearly and unambiguously” selected the fee schedule limitation under section 627.736(5)(a)2., Florida Statutes, if it wanted to limit its payments in accordance with the Medicare fee schedule. The circuit court further determined that Progressive was precluded from engaging in discovery and arguing the reasonableness of the billed amounts.
On certiorari review, the Fifth District in Progressive Select determined that because Progressive Select had “failed to elect specifically to limit payments based on the fee schedule,” it “may not avail itself of the fee schedule limitation” according to Geico General Insurance Co. v. Virtual Imaging Services, Inc., 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]. Progressive Select, 202 So. 3d at 438. However, Progressive Select also determined, “Nonetheless, despite [Progressive Select’s] failure to elect to use the fee schedule limitation in its policy, it is not precluded from having an opportunity to litigate the reasonableness of EPCF’s bill under section 627.736(5)(a)1. . . .” Id. Thus, Progressive Select quashed “that part of the decision under review that prohibits Progressive [Select] from engaging in discovery and contesting the reasonableness of EPCF’s bill.” Id.
In short, according to Progressive Select, even if an insurer fails to elect to use the fee schedule limitation in its policy, it is not later precluded from litigating the reasonableness of the provider’s bill under section 627.736(5)(a)1., Florida Statutes. Rather, the insurer is merely precluded from availing itself of the fee schedule limitation in section 627.736(5)(a)2. As a result of the Fifth District’s opinion in Progressive Select, this Court’s ruling in Progressive American, that “there is no need to have a fact-dependent inquiry on reasonableness of the charge” when the insurer “applies a fee schedule,” is no longer good law.
Applying Progressive Select to the instant case, we conclude that the trial court erred in following Progressive American and entering a summary final judgment in favor of Pan Am. Instead, the trial court should have considered Dr. Foley’s affidavit and State Farm otherwise should have been allowed to litigate the reasonableness of Pan Am’s bill for the MRI, even though it used a fee schedule in paying for the MRI, and its insurance policy failed to give notice of its election to use the fee schedule. According to Progressive Select, under these circumstances, State Farm was merely precluded from availing itself of the “fee schedule limitation.” See 202 So. 3d at 438. Further, the opposing affidavits of Kahana and Dr. Foley, submitted by Pan Am and State Farm respectively, raised a genuine issue of material fact for a jury with respect to the reasonableness of Pan Am’s bill.3 Pursuant to Progressive Select, we reverse the trial court’s Order Granting Plaintiff’s Motion for Final Summary Judgment and Denying Defendant’s Motion for Final Summary Judgment.
Accordingly, it is hereby ORDERED AND ADJUDGED as follows:
1. The Order Granting Plaintiff’s Motion for Final Summary Judgment and Denying Defendant’s Motion for Final Summary Judgment, rendered on November 19, 2015, is REVERSED and this matter is REMANDED to the trial court for further proceedings consistent with this opinion.
2. State Farm’s Motion for Appellate Attorney’s Fees, filed on June 27, 2016, is GRANTED, contingent on the trial court’s determination that State Farm’s proposal for settlement is valid and enforceable, and the assessment of those fees is REMANDED to the trial court.
3. Pan Am’s Motion to Award Appellate Attorneys’ Fees, filed on August 22, 2016, is DENIED. ((MARGARET H. SCHREIBER Presiding Circuit Judge; J. RODRIGUEZ and CARSTEN, JJ., concur.)
__________________
1This Court has jurisdiction under section 26.012(1), Florida Statutes and Florida Rule of Appellate Procedure 9.030(c)(1)(A). We dispense with oral argument. Fla. R. App. P. 9.320.
2Pan Am originally filed suit in Miami-Dade County but venue was later transferred to Orange County.
3To be sure, State Farm takes issue with Kahana’s affidavit in several respects, while otherwise appearing to acknowledge that some of its statements would establish a prima facie case for a jury. Pan Am, meanwhile, advances several arguments in support of its apparent position that none of the statements in Dr. Foley’s affidavit would be admissible. We cannot agree that none of Dr. Foley’s statements would be admissible, and conclude that at a minimum, his affidavit includes statements that raise a fact issue for the jury with respect to reasonableness.
