26 Fla. L. Weekly Supp. 672a
Online Reference: FLWSUPP 2608STEEInsurance — Personal injury protection — Med pay — Coverage — Medical expenses — Exhaustion of policy limits — Where insurer exhausted PIP and med pay benefits in payments of claims, and medical provider failed to prove bad faith on part of insurer in adjusting claims, insurer is not liable for balance of provider’s reduced bill — Insurer was not required to reserve benefits for disputed portion of provider’s claim
LORETTA STEELE, Plaintiff, v. UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County. Case No. 502016CC006153. June 11, 2018. Sandra Bosso-Pardo, Judge. Counsel: Christian Kribbs, Hicks & Motto, P.A., Palm Beach Gardens, for Plaintiff. Billie Brock, Dutton Law Group, Fort Lauderdale, for Defendant.
ORDER GRANTING DEFENDANT’S MOTION FORSUMMARY JUDGMENT ON THE ISSUE OF EXHAUSTION OFBENEFITS WITH INCORPORATED MEMORANDUM OF LAW
THIS Cause, having come before the Court to be heard on March 1, 2018, regarding Defendant’s Motion for Summary Judgment on the Issue of Exhaustion of Benefits with Incorporated Memorandum of Law (hereinafter “Defendant’s Motion”), and the Court having reviewed the Motion, the entire court file, and the relevant legal authorities, having heard argument of counsel, having made a thorough review of the matters filed of record and having been advised in the premises, the Court finds as follows:
STATEMENT OF FACTS
On May 13, 2015, the Plaintiff was involved in an automobile accident in which she sustained injuries. At the time of the accident, the Plaintiff was insured under a contract of insurance issued by the Defendant that provided PIP benefits coverage and medical payments coverage in accordance with the Florida Motor Vehicle No-Fault Law (hereinafter “Policy”). The policy provided $10,000.00 in Personal Injury Protection (PIP) coverage and $100,000.00 in medical payments coverage.
Following its notice of the claim, the Defendant received bills from the Plaintiff’s medical providers. Defendant adjusted the bills and paid PIP and medical payments benefits in accordance with the policy and Florida law. Specifically, on August 18, 2015, Defendant received a bill from West Palm Hospital for date of service May 13, 2015. Defendant adjusted West Palm Hospital’s claim and paid for the subject services pursuant to the applicable Medicare Part A fee schedule. At the deposition of Alice Verble, Defendant’s Litigation Adjuster, occurring October 25, 2017, Ms. Verble testified that the reason West Palm Hospital’s bill was paid at the Medicare Part A fee schedule rate was because West Palm Hospital did not submit a bill which included a CPT code indicating that emergency services and care were rendered to Plaintiff by West Palm Hospital.
Prior to receipt of West Palm Hospital’s bills, PIP benefits exhausted on August 15, 2015. Thereafter, the medical payments coverage exhausted June 15, 2016.
Plaintiff sent its purported pre-suit demand letter dated April 11, 2016. In its purported pre-suit demand letter, Plaintiff alleged $11,457.56 was due and owing for services rendered on May 13, 2015 by West Palm Hospital. In its purported demand, Plaintiff attached an invoice from West Palm Hospital to Loretta Steele and Explanations of Reimbursement/Adjustments issued by Defendant to West Palm Hospital. At the time Defendant received the purported pre-suit demand on April 18, 2016, Defendant had paid out $10,000 in PIP benefits and $92,271.79 in medical payments coverage.
Thereafter, on May 24, 2016, Plaintiff filed its lawsuit against the entity, USAA Casualty Insurance Company. After realizing it had named an entity which did not provide coverage, Plaintiff moved to Amend its Complaint to name United Services Automobile Association as Defendant. This Court granted Plaintiff’s Motion for Leave to Amend Complaint, requiring Plaintiff to serve United Services Automobile Association.
United Services Automobile Association was served with notice of process December 15, 2016 and made a party to the suit. Plaintiff’s Amended Complaint, filed October 20, 2016, alleged Breach of Contract for failure to pay PIP and/or Medical Payments benefits. Defendant filed its Answer denying the allegations and asserting all payments made by Defendant were pursuant to the policy and No Fault Law and that no further benefits were due and owing due to the exhaustion of the policy limits. Defendant asserted as Affirmative Defenses that payments were made pursuant to the policy and No Fault Law, that the policy benefits had exhausted and Defendant could no longer be liable for policy benefits, that Plaintiff’s pre-suit demand letter was invalid, limit of liability, and set-off of benefits paid under the policy. Plaintiff did not file a Reply or responsive pleading to Defendant’s Answer and Affirmative Defenses.
On January 29, 2018, Plaintiff moved to amend its Complaint to plead allegations that Defendant acted in bad faith in its adjustment of bills submitted to Defendant. At the summary judgment hearing of March 1, 2018, this Court denied Plaintiff’s Motion to Amend pursuant to Noble, M.D. vs. Martin Memorial Hospital Assc., Inc., 710 So.2d 567 (Fla. [4th DCA] 1997) [23 Fla. L. Weekly D58a]. Accordingly, at no time prior to the summary judgment hearing of March 1, 2018, did Plaintiff plead any allegations of bad faith exhaustion or otherwise introduce into evidence that Defendant had acted in bad faith in adjustment of the bill submitted by West Palm Hospital for date of service May 13, 2015.
ANALYSIS
As the rights and obligations of parties under a policy of insurance arise out of a contract of insurance, they are governed by contract law. State Farm Mut. Auto. Ins. Co. v. St. Godard, 936 So. 2d 5, 9 (Fla. 4th DCA 2006) [31 Fla. L. Weekly D1320a]. Accordingly, the amount of the judgment against the insurer may not exceed the policy limits, absent a judicial finding of bad faith. Id. Additionally, there is no legal requirement that an insurer set aside a reserve fund for claims which are reduced or denied. Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So.2d 3, 5 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a].
Plaintiff did not properly establish a claim for bad faith in the pleadings or submit to the Court’s satisfaction any record evidence of bad faith on the part of Defendant in adjustment of West Palm Hospital’s bill for date of service May 13, 2015. In fact, the evidence in the record evidences Defendant adjusted West Palm Hospital’s bill pursuant to Fla. Stat. §627.736(5)(1)1.d., which provides:
(5) Charges for treatment of injured persons. —
(a) A physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge the insurer and injured party only a reasonable amount pursuant to this section for the services and supplies rendered, and the insurer providing such coverage may pay for such charges directly to such person or institution lawfully rendering such treatment if the insured receiving such treatment or his or her guardian has countersigned the properly completed invoice, bill, or claim form approved by the office upon which such charges are to be paid for as having actually been rendered, to the best knowledge of the insured or his or her guardian. However, such a charge may not exceed the amount the person or institution customarily charges for like services or supplies. In determining 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, reimbursement levels in the community and various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.
1. The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:
a. For emergency transport and treatment by providers licensed under chapter 401, 200 percent of Medicare.
b. For emergency services and care provided by a hospital licensed under chapter 395, 75 percent of the hospital’s usual and customary charges.
c. For emergency services and care as defined by s. 395.002 provided in a facility licensed under chapter 395 rendered by a physician or dentist, and related hospital inpatient services rendered by a physician or dentist, the usual and customary charges in the community.
d. For hospital inpatient services, other than emergency services and care, 200 percent of the Medicare Part A prospective payment applicable to the specific hospital providing the inpatient services.
e. For hospital outpatient services, other than emergency services and care, 200 percent of the Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services.
As to payment for PIP benefits, Plaintiff’s policy provides for payment of reasonable fees under section “Part B-1 — Personal Injury Protection (K)(2)&(3), which states as follows:
K. “Reasonable fee is no more than 80 percent of the following schedule of maximum charges:
1. Two hundred (200) percent of Medicare for emergency transport and treatment by providers licensed under chapter 401.
2. Seventy-five (75) percent of the hospital’s usual and customary charges for emergency services and care provided by a hospital licensed under chapter 395.
3. The usual and customary charges in the community for emergency services and care as defined by s. 395.002 provided in a facility licensed under chapter 395 rendered by a physician or dentist, and related to hospital inpatient services rendered by a physician or dentist.”
4. Two hundred (200) percent of Medicare Part A prospective payment applicable to the specific hospital providing the inpatient services for hospital inpatient services, other than emergency services and care.
The Court found there is no record of intentional conduct by Defendant to manipulate or gain an unfair advantage over West Palm Hospital in the adjustment of its bill, or over that of Plaintiff.
Accordingly, the Court found that Defendant properly exhausted the policy of insurance in the amount of $10,000.00 in PIP benefits and $100,000.00 in medical payments coverage. In reaching this ruling, the Court relied upon the 4th District Court of Appeals decision that an insurer is not obligated to reserve and hold benefits when a provider claims the benefits paid are less than required by the contract and Defendant received a pre-suit demand letter notifying the insurer of the provider’s dispute and the Defendant was thereafter served with the subject lawsuit. Northwoods Sports Medicine and Physical Rehabilitation, Inc., (a/a/o Suzanne Cabrera) and Wellness Associates of Florida, Inc., (a/a/o Daniel North) v. State Farm Mutual Automobile Insurance Company and USAA Casualty Insurance Company, 137 So.3d 1049 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a] review denied sub nom. Wellness Associates of Florida, Inc. v. USAA Cas. Ins. Co., No. SC14-1355, 2015 WL 1403734 (Fla. Mar. 24, 2015)
Therefore, it is ORDERED AND ADJUDGED that Defendant’s Motion for Summary Judgment on the Issue of Exhaustion of Benefits is GRANTED. Judgment is hereby entered in favor of Defendant UNITED SERVICES AUTOMOBILE ASSOCIATION, and Defendant shall go hence without delay. Plaintiff, LORETTA STEELE, shall take nothing by this action.
