25 Fla. L. Weekly Supp. 93a
Online Reference: FLWSUPP 2501MANEInsurance — Personal injury protection — Exhaustion of benefits — By introducing some evidence that there may have been improperly paid claims and showing evidence of potential unlicensed and fraudulent activity by other providers whose claims were paid by insurer, plaintiff demonstrated genuine issues of fact as to whether benefits were exhausted by payment of invalid claims — Plaintiff was not required to prove that insurer acted intentionally or with knowledge of any impropriety in its payments — Insurer’s motion for summary judgment on ground that benefits were exhausted is denied
VELO CHIRO FIZIK, INC. a/a/o Rosenda Manes, Plaintiff, v. MGA INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 15-3311 SP 21. January 25, 2017. Don Cohn, Judge. Counsel: Ryan Peterson, Patino Law Firm, and Alan Alvarez, for Plaintiff.
ORDER DENYING DEFENDANT’S MOTION FORSUMMARY JUDGMENT REGARDINGEXHAUSTION OF BENEFITS
This Matter, having come before the Court on December 19, 2016 on Defendant MGA Insurance Company’s Motion for Summary Judgment, and after reviewing the Motion, matters of record on file with the Court, statutes and case law provided by counsel, and after having considered argument of counsel it is adjudged as follows:
BACKGROUND
The action involves a claim for personal injury protection insurance benefits filed by the Plaintiff, VELO CHIRO FIZIK, INC. (hereinafter “Plaintiff”) as assignee of Rosenda Manes (hereinafter “Patient” or “Insured”) against the Defendant, MGA Insurance Company (hereinafter “MGA” or “Defendant”), arising out of a motor vehicle accident that allegedly occurred on August 30, 2010.
The insurance policy providing coverage for the instant claim was issued to Ms. Manes and provided $10,000.00 in Personal Injury Protection (PIP) coverage. After the accident, the Defendant received bills for medical services from three of Ms. Manes’ medical providers: Fountainbleau Rehab Corp. (Fountainblueau), Velo Chiro Fizik, Inc. (Plaintiff), and B&A Diagnostic, Inc. (B&A Diagnostic).
Of note, on September 24, 2010, the Defendant received bills totaling $4,754.84 from Fountainbleau for medical services provided from September 1, 2010 through September 21, 2010. MGA received medical records with the bills, including a purported prescription from Dr. Eduardo Ramirez, D.C., allegedly prescribing all of the services rendered by Fountainbleau. Three days later, on September 27, 2014, Defendant received bills from Plaintiff (Dr. Ramirez), including a prescription for services from Dr. Ramirez which appears to be identical to the one Fountainbleu submitted (including the handwriting), with one key exception — the modality for mechanical traction (CPT Code 97012) was not circled in Dr. Ramirez’ prescription, but was circled in the prescription provided by Fountainbleu. The Defendant paid for Fountainbleu’s services, including mechanical traction.
On October 26, 2010, Defendant received a bill package from B&A Diagnostic for some X-rays. The Defendant reimbursed $295.90 to B&A on December 9, 2010. When B&A Diagnostic filed a lawsuit for additional payment on September 2, 2014, Defendant and B&A Diagnostic reached a settlement agreement for $66.08 for the medical benefits portion of that lawsuit. The payments made to Plaintiff, B&A, and Fountainbleu totaled $10,000.00. Defendant asserted to the Plaintiff that benefits had been exhausted. Thereafter, Plaintiff filed the instant lawsuit.
Defendant filed its Amended Motion for Summary Judgment regarding exhaustion of benefits on December 21, 2015 and Notice of Filing Supplemental Authority on December 13, 2016. As evidence in support of its Motion, Defendant filed the affidavit of Jeannine Zangronis, Defendant’s PIP Litigation Adjuster.
On December 13, 2016, Plaintiff filed the deposition transcript of Jeannine Zangronis, the affidavit of Dr. Eduardo Ramirez, and various records from Defendant and Fountainbleau. Plaintiff also filed a Request for Judicial Notice of a Court Order from the United States District Court for the Southern District of Florida, Case No. 14-cv-24387-KMM. That Federal Court lawsuit was brought by State Farm Mutual Automobile Insurance Company and State Farm Fire & Casualty Company and involved unjust enrichment claims against B&A Diagnostic and several individual Defendants. That court granted summary judgment against B&A Diagnostic related to X-Rays provided by B&A, indicating that at least some of B&A’s services in 2010 were unlawful. Defendant filed a Response in Opposition to Plaintiff’s Motion for Judicial Notice.
It is Defendant’s contention that benefits have been exhausted and that Plaintiff is not entitled to any further PIP benefits. Plaintiff responds that there are genuine issues of material fact and that it has submitted evidence that tends to show that 1) Defendant has paid medical bills which do not qualify as medical benefits because they were not lawfully prescribed by a physician — as Dr. Ramirez testified in his affidavit that he did not prescribe the traction modality and the insurer paid Fountainbleu for those services anyway, 2) Fountainbleau Rehab has possibly committed insurance fraud by possibly falsifying a prescription, making all of their services potentially non-payable and illegal, 3) the insurance company paid for illegal services from B&A Diagnostic Center which was not properly licensed. The Plaintiff argues that it has presented some evidence that the insurance company has committed bad faith and/or has paid unpayable and invalid medical bills and in doing an improper and incomplete investigation. Plaintiff alleges that in a light most favorable to the Plaintiff, the facts show that the Defendant did not take proper care of the patient’s limited medical benefits, and that there is an issue of fact as to whether Defendant has violated several of the statutes in Fla. Stat. 624.155 and 626.9541, which would entitle the Plaintiff to extra-contractual damages beyond the $10,000.
Defendant also argues that the affidavit of Dr. Ramirez is self-serving, conclusory, and otherwise fails to create an issue of material fact where the affidavit merely sets forth the Plaintiff’s contention that there is a suspicion of fraud. Defendant further argues that it is the Plaintiff’s burden to prove that Fountainbleau committed fraud and that the Defendant was aware of said fraud when it paid the bills. Defendant also contends that it is a due process violation and otherwise improper for this Court to rule as a matter of law that Fountainbleau committed fraud where there has been no adjudication of same.
LEGAL ANALYSIS AND DISCUSSION
Summary judgments are only to be granted where “the facts are so crystallized that nothing remains but questions of law.” Moore v. Morris, 475 So.2d 666 (Fla. 1985). The party moving for summary judgment must show conclusively the absence of any genuine issue of material fact and the Court must draw every possible inference in favor of a party against whom summary judgment is sought. Id.
Defendant contends that its initial summary judgment burden is met where they establish that the policy benefits are limited to $10,000.00 and that $10,000.00 has been paid. Defendant argues that the burden then shifts to the Plaintiff to provide competent evidence revealing a genuine issue of fact that benefits were exhausted improperly, and that it is not enough for Plaintiff to merely assert that an issue does exist. See Landers v. Milton, 370 So.2d 368 (Fla. 1979). Furthermore, Defendant argues that exhaustion of benefits is only improper where there is a finding of bad faith or when Defendant knowingly pays bills that were submitted untimely in violation of §627.736(5)(b). See Northwoods Sports v. State Farm Mut. Auto Ins Co., 137 So.3d 1049 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a], Coral Imaging v. GEICO, 955 So.2d 11 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D2478a], GEICO Indemnity Company v. Gables Insurance Recovery, Inc., 159 So.3d 151 (Fla. 3d DCA 2014) [39 Fla. L. Weekly D2561a]. Defendant contends that there is no evidence that Defendant has acted in bad faith. Lastly, Defendant asserts that in the event that Coral Imaging is interpreted to extend past the auspices of §627.736(5)(b) and prohibit insurers from paying all improperly billed charges, Plaintiff must prove that 1) the Defendant paid an improperly billed charge and 2) Defendant had actual knowledge that it was paying an improperly billed charge.
The Plaintiff argues that the unpayable medical bills should not be debited from the patient’s account, because of Coral Imaging v. GEICO, 955 So.2d 11 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D2478a]. The Plaintiff also contends that the Defendant must make a prima facie showing that it paid for valid medical bills, as opposed to just paying $10,000.00. Plaintiff argues that the Defendant’s summary judgment burden is to prove that all of Defendant’s payments to other providers were made properly for valid claims only, and that such a burden never shifts to Plaintiff. Plaintiff argues that even if the Defendant makes a prima facie showing demonstrating that it had paid $10,000, that Plaintiff may demonstrate there is an issue of fact by merely introducing evidence that there may have been improper payments made. Hearing Tr. 19:22-25, 20:1-6.
This Court rejects Defendant’s argument that summary judgment should be granted in its favor where the payment of potentially invalid bills was unknowing and unintentional, or by suggesting that the Plaintiff must prove that the Defendant acted intentionally or with knowledge of any impropriety in its payments. According to the caselaw, an insurer’s
“good faith duty to the insured requires it to fully investigate all claims arising from a multiple claim accident, keep the insured informed of the claim resolution process, and minimize the magnitude of possible excess judgments against the insured by reasoned claim settlement. This does not mean that [the insurer] has no discretion in how it elects to settle claims, and may even choose to settle certain claims to the exclusion of others, provided this decision is reasonable and in keeping with its good faith duty. Second, whether [the insurer] has met its good faith duty and undertaken a reasonable claims settlement strategy are questions for a jury to decide.” Farinas v. Florida Farm Bureau, 850 So.2d 555 (Fla. 4th DCA, 2003) [28 Fla. L. Weekly D1023b].
Furthermore, the Court declines to limit Coral Imaging to payment of an untimely bill. See Coral Imaging (the statute “must be read as prohibiting [the insurer] from paying the untimely and improperly billed charges. . .as violative of § 627.736(5)(b). . .the payment by [the insurer] must be characterized as ‘gratuitous’ and should not be considered as having been made against the limits of the PIP policy” (emphasis added)). The Court finds that the rationale in Coral Imaging applies to services which were unlawful under Fla. Stat. 627.736(5)(b), in addition to bills that were untimely under that same subsection. The Court further rejects Defendant’s contention that Plaintiff has not provided competent material evidence that Defendant paid bills which were improperly charged.
This Court finds that by way of the affidavit of Dr. Ramirez, the Plaintiff has submitted evidence that Fountainbleau may have altered Dr. Ramirez’ prescription to get the insurance company to pay for some non-prescribed services. If this is true it would render the entire massage therapist’s bill unpayable, and show that the insurer paid non-prescribed charges. See Fla. Stat. 627.637(5)(b)(1)(c), “An insurer or insured is not required to pay a claim or charges . . . [t]o any person who knowingly submits a false or misleading statement relating to the claim or charges.” Furthermore, services that are not prescribed by a physician are not valid medical benefits. See Fla. Stat. 627.736(1)(a). The Court finds that whether Fountainbleu submitted false or misleading statements and whether some of their services were not prescribed or otherwise invalid is a genuine issue of material fact that precludes summary judgment for Defendant.
In addition, Ms. Zangronis, the Defendant’s representative, was asked if she was currently aware of any “issues in terms of the lawfulness of the treatment submitted by B&A for the years 2010 or 2011” and whether she was currently aware “of any problems with the lawfulness of the treatment that they submitted for reimbursement from insurance companies.” She testified “as of today, I am aware.” She further indicated that “there was a period that they had — they — the tech wasn’t properly licensed.” (Zangronis Dep. 36:17-25, 37:1, October 3, 2016). It should be noted that the order from the Federal Court case grants summary judgment against B&A Diagnostic and other individual Defendants. The body of the order suggests that all of B&A Diagnostic Center’s services were unlawful from 2008 until late 2011 due to a host of various licensing difficulties and administrative and statutory violations by that company.
Defendant argued that the Plaintiff has not set forth any summary judgment evidence to establish that B&A Diagnostic was in fact ever operating unlawfully1, or any evidence that Defendant had any knowledge of B&A Diagnostic’s purported unlawful treatment at the time the bill was submitted to Defendant. Defendant argues that the federal court order (and the findings of fact contained therein) does not constitute summary judgment evidence. Although this Court did not and has not taken judicial notice of the order, this Court rules that the Court order is authority and this Court can consider the factual findings made therein, and that those factual findings contained within the federal court order are sufficient to create a genuine issue of material fact as to whether or not the services were rendered lawfully and whether or not Defendant paid B&A’s bill improperly. Hearing Tr. 40:16-24.
In light of the foregoing, this Court rejects Defendant’s position that it only needs to prove policy limits and payment of same, and furthermore rules that for purposes of summary judgment, the burden is on the Defendant to prove that all bills were paid properly for valid claims. The only question here is whether the Plaintiff presented some evidence that the Defendant may have paid for improperly billed charges, or acted in bad faith. In the light most favorable to the Plaintiff non-moving party, the Court finds that Plaintiff has provided enough evidence to require a jury to decide whether the insurer has paid for invalid medical bills, or whether the insurer acted in bad faith in paying some of the medical bills. By merely introducing evidence that there may have been improperly paid claims, and by showing evidence of potential unlicensed and fraudulent activity by the other medical providers, it is this Court’s finding that the Plaintiff demonstrated that there is an issue of fact. See Doral Health Center a/a/o Sara Perez v. United Auto., 23 Fla. L. Weekly Supp. 963a (Fla. Miami-Dade County Ct. 2016). It should be noted that the Court is not making an adjudication that Fountainbleu has committed fraud at this time, nor is the Defendant prohibited from arguing that Fountainbleu’s bills were not fraudulent, only that the Plaintiff has demonstrated some evidence that the Defendant may have paid fraudulent medical bills so as to preclude summary judgment. The Defendant will have an opportunity to rebut these contentions to the jury in this matter so to satisfy any due process concerns, and it will be a jury that will make the determination on whether the Defendant properly exhausted benefits in this matter.
For the foregoing reasons, Defendant’s Motion for Summary Judgment is hereby DENIED.
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1At hearing, Defense counsel alleged that B&A Diagnostic is still licensed to operate, but that evidence was not before the Court at the time of the hearing, and as such, the Court did not consider it. See Hearing Tr. 30:21-22.
