26 Fla. L. Weekly Supp. 909b

Online Reference: FLWSUPP 2611COMInsurance — Personal injury protection — Coverage — Medical expenses — Where evidence indicates that PIP policy failed to elect to limit reimbursement to statutory fee schedules and that insurer utilized Medicare Part B fee schedule as exclusive basis for reimbursement of medical provider’s claim, provider has met prima facie burden to establish that its charges are reasonable, and insurer has not filed opposing affidavit regarding reasonableness of charges, summary judgment is entered in favor of provider

PALMETTO PHYSICAL THERAPY, INC., a/a/o Hebeida Com, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County, Civil Division. Case No. 15-020465 COCE 55. September 6, 2018. Daniel J. Kanner, Judge. Counsel: Majid Vossoughi and Brad R. Blackwelder, Majid Vossoughi, P.A., Miami, for Plaintiff. Nicholas A. Ferreiro, Cole, Scott & Kissane, P.A., Plantation, for Defendant.

ORDER GRANTING PLAINTIFF’S MOTIONFOR SUMMARY FINAL JUDGMENT AND MOTIONFOR ENTRY OF FINAL JUDGMENT

THIS CAUSE came before the Court on 08/13/18 on Plaintiff’s Motion for Summary Final Judgment and Motion for Entry of Final Judgment. The issue raised by Plaintiff’s Motion is whether the charges for treatment rendered to Hebeida Com were reasonable in price.

The Court having reviewed Plaintiff’s Motion for Summary Final Judgment and Motion for Entry of Final Judgment with supporting evidence, the entire Court file, the relevant legal authorities, and having heard argument from counsel and being otherwise sufficiently advised in the premises, hereby enters this Order GRANTING Plaintiff’s Motion for Summary Final Judgment and Motion for Entry of Final Judgment and makes the following factual findings and conclusions of law.

FACTUAL FINDINGS

Hebeida Com was involved in an automobile accident on 05/13/12 and treated with Plaintiff from 05/16/12 through 07/27/12 in relation to injuries sustained in the accident.

Plaintiff, as assignee of a policy of insurance issued by Defendant, submitted its bills in the amount of $15,815.00 for treatment of Hebeida Corn to Defendant for payment of Personal Injury Protection (“PIP”) benefits.

Defendant processed Plaintiff’s claim for payment of PIP benefits and tendered payment to Plaintiff in the amount of $8,106.31.

On 09/09/15 Plaintiff, as the assignee of Hebeida Com, filed suit for PIP benefits alleging breach of contract by Defendant. Plaintiff’s Complaint alleges in part:

(i) that Defendant has failed to pay “eighty percent of Plaintiff’s bills for all reasonable expenses” (¶ 23),

(ii) that Defendant has “limited reimbursement” pursuant to “limitation set forth in Fla. Stat. 627.736(5)(a)(2)(f)” (¶ 24),

(iii) that “Defendant’s policy of insurance does not contain an election to limit reimbursement of no-fault payment to that of the permissive fee scheduled contained in Fla. Stat. 627.736(5)(a)(2)(f)” (¶¶ 24, 28), and

(iv) that “Defendant’s refusal or failure to correctly pay eight percent of Plaintiff’s medical bill(s) . . . constitutes a breach of its duties under the applicable insurance contract” (¶¶ 29, 30).

Defendant’s policy of insurance, a copy of which was filed with this Court on 05/01/17, contains Amendatory Endorsement 6910.3 which delineates payable amounts under the PIP or No-Fault law as required by Defendant’s policy of insurance.

Defendant’s Amendatory Endorsement 6910.3 does not contain the “optional” payment methodology set forth in Fla. Stat. 627.736(5)(a)2. which came into effect as a result of the 2008 statutory amendments to the PIP statute allowing payments exclusively based on Medicare Fee Schedules without regard to “reasonableness” of a provider’s charge.

As to payable amounts under the PIP or No-Fault portion of Defendant’s policy, Amendatory Endorsement 6910.3 mandates Defendant to pay “80% of all reasonable expenses incurred for medically necessary . . . . rehabilitative services.”

NO-FAULT — COVERAGE P

b. Item 1. of What We Pay is changed to read:

1. Medical Expenses. 80% of all reasonable expenses incurred for:

a. medically necessary medical, surgical, X-ray, dental, ambulance, hospital, professional nursing and rehabilitative services, eyeglass, hearing aids and prosthetic devices; and

b. necessary remedial treatment and services recognized and permitted under the laws of the state for an injured person who relies upon spiritual means through prayer alone for healing, in accordance with his or her religious beliefs.

To determine whether a charge is reasonable we may consider usual and customary charges and payments accepted by the provider, 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.

Amendatory Endorsement 6910.3, page 3-4 (emphasis added)

Defendant’s statutorily mandated Explanations of Review pursuant to Fla. Stat. 627.736(4)(b), copies of which were filed with this Court on 10/03/16, reflect that in processing Plaintiff’s claim the Defendant in fact utilized the fee schedule methodology and/or payment limitation contained in Fla. Stat. 627.736(5)(a)2. as their exclusive basis for reimbursement of Plaintiff’s claim (although it was not specifically incorporated in Defendant’s policy).

Specifically, Defendant’s statutorily mandated Explanations of Review contain numeric “Explanations” or “Reason Codes” next to each and every “Approved Amount” delineating Defendant’s specific payment methodology, not to mention the specific reference to “subparagraph 2.” of the PIP statute contained within Defendant’s Explanations of Review.

EXPLANATIONS

305. . . The payment for this service is based upon 200% of the Participating Level of Medicare Part 13 fee schedule for the locale in which the services were rendered.

432. . . The payment for this service is based upon 200% of the 2007 Participating Level of Medicare physician fee schedule for the locale in which the services were rendered.

433. . . The payment for this service is based upon the payment methodology established pursuant to the Workers’ Compensation Fee Schedule (s.440.13).

C1281. . . The payment for this service is based upon 200% of the Participating Level of Medicare Part B fee schedule for the region in which the services were rendered.

C1283. . . The payment for this service is based upon the payment methodology established pursuant to the Workers Compensation Fee Schedule (s.440.13).

For date of accident 1/1/08 and after, if an insurer limits payment as authorized by subparagraph 2., the person providing such services, supplies, or care may not bill or attempt to collect from the insured any amount in excess of such limits, except for amounts that are not covered by the insured’s personal injury protection coverage due to coinsure amount or maximum policy limits. F.S. 627.736(5)(a)5.

There is no evidence reflecting that Defendant ever undertook any fact-based inquiry into the reasonableness of Plaintiff’s charges electing instead to limit reimbursement in accordance with the fee schedule methodology set forth in Fla. Stat. 627.736(5)(a)2. not incorporated within Defendant’s policy of insurance.

Defendant filed its Answer to Plaintiff’s Complaint which did not raise any affirmative defenses to Plaintiff’s cause of action.

On 08/26/16 Plaintiff filed its Motion for Summary Judgment and Motion for Entry of Final Judgment as to reasonableness, relatedness, and medical necessity of its care and treatment.

On 02/10/17 this Court entered its Order on Plaintiff’s Motion for Summary Judgment and found all treatment rendered by the Plaintiff to be related to the subject automobile accident and medically necessary as a matter of law. The Order denied Plaintiff’s motion without prejudice as to the issue of reasonableness of its charges.

Accordingly, the sole remaining issue in this action is the reasonableness of-Plaintiff’s charges for its care and treatment rendered to Hebeida Corn.

On 05/10/18 Plaintiff filed an affidavit from Craig Dempsey who rendered an opinion as to the reasonableness of Plaintiff’s charges. In his affidavit, Mr. Dempsey testifies that the charges for treatment rendered by the Plaintiff are reasonable charges within the range of usual and customary charges for similar care in the Miami-Dade County geographical area. A copy of the medical bills submitted to Defendant reflecting the treatment rendered to Hebeida Corn from 05/16/12 through 07/27/12 are attached to Mr. Dempsey’s affidavit and were also attached to Plaintiff’s Declaration of Records Custodian filed with this Court on 05/10/18.

On 05/10/18 Plaintiff filed its Motion for Summary Final Judgment and Motion for Entry of Final Judgment as to the sole remaining issue of reasonableness of Plaintiff charges for the care and treatment rendered to FIebeida Corn relying on affidavit testimony from Mr. Dempsey.

Defendant did not file any affidavits in opposition to Plaintiff’s Motion for Summary Final Judgment and Motion for Entry of Final Judgment.

Summary Judgment Standard

Florida Rule of Civil Procedure 1.510(c) provides that “judgment sought must be rendered immediately if the pleadings and summary judgment evidence on file show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law”.

“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”. Volusia County v. Aberdeen At Ormond Beach, L.P., 760 So.2d 126 (Fla. 2000) [25 Fla. L. Weekly S390a] [citing Menendez v. Palms West Condominium Ass’n, 736 So.2d 58 (Fla. 1st DCA 1999) [24 Fla. L. Weekly D1317a]; see also Holl v. Talcott, 191 So.2d 40 (Fla. 1966); Moore v. Morris, 475 So.2d 666 (Fla. 1985).

The Plaintiff’s burden of proof in establishing its prima facie case to recover PIP benefits requires proof that the medical services are related to the subject automobile accident, medically necessary, and that the bills for said services are reasonable. See Derius v. Allstate Indemnity Co., 723 So.2d 271 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D1383a].

Once the Plaintiff has met its initial burden of proof, the Defendant must come forward with evidence establishing a genuine issue of material fact. Latour Auto Sales, Inc. v. StrornbergCarlson Leasing Corp., 335 So.2d 600 (Fla. 3d DCA 1976). If the Defendant “fails to come forward with any affidavit or other proof in opposition to the motion for summary judgment, the [Plaintiff] need only establish a prima facie case, whereupon the court may enter its summary judgment.” Id. at 601 [citing Harvey Building, Inc. v. Haley, 175 So.2d 780 (Fla. 1965)]; see also Landers v. Milton, 370 So.2d 368, 370 (Fla. 1979). Defendant cannot “merely assert that an issue does exist,” but rather “must go forward with evidence sufficient to generate an issue on a material fact.” Byrd v. Leach, 226 So.2d 866 (Fla. 4th DCA 1969).

Reasonableness of Plaintiff’s Charges

As it pertains to a medical provider’s burden in establishing reasonableness of its charges, the 17th Judicial Circuit, sitting in its appellate capacity, has held that a medical provider establishes a prima facie case that its bills are reasonable by offering testimony through a qualified witness that its prices are based on years of personal experience, consideration of fee and coding reference books and the usual and customary charges of other medical providers in the community for the same procedure codes. United Auto Ins. Co. v. Hallandale Open MRI, LLC. a/a/o Antonette Williams, 21 Fla. L. Weekly Supp. 399d (Fla. 17th Cir. App. December 11, 2013); Cert. Den., 145 So.3d 997 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D1883c].

A plaintiff’s prima facie showing of the reasonableness of its charges can also be established by merely presenting the medical bill produced for the service at issue, along with testimony that the patient received the treatment in question. See A.J. v. State, 677 So.2d 935, 937 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D1677e] (“a medical bill constitutes the provider’s opinion of a reasonable charge for the services.”); see also State Farm Mutual Auto. Ins. Co. v. Multicare Medical Group, Inc., 12 Fla. L. Weekly Supp. 33a (Fla. 11th Cir. App. October 5, 2004).

Affidavit of Craig Dempsey

As to reasonableness of Plaintiff’s charges, Plaintiff provided affidavit testimony from Craig Dempsey. Mr. Dempsey testified that the charges for treatment rendered by the Plaintiff were reasonable and within the range of usual and customary charges for similar care in the Miami-Dade County geographical area. As noted above, a copy of the medical bills submitted to Defendant reflecting the treatment rendered to Hebeida Corn from 05/16/12 through 07/27/12 are attached to Mr. Dempsey’s affidavit and were also attached to Plaintiff’s Declaration of Records Custodian filed with this Court on 05/10/18.

Mr. Dempsey’s affidavit reflects that he has been in the medical billing field since 1979, operated two billing companies, has personally prepared thousands of medical bills for medical providers that were submitted to PIP insurers, has reviewed and/or helped to determine medical charges for numerous physicians, and has personal knowledge of the range of usual and customary charges for medical care and related therapeutic treatment in Miami-Dade County.

Mr. Dempsey’s affidavit outlines his methodology which involves comparing Plaintiff’s charges to the range of charges of other medical providers in the community. His affidavit outlines the data utilized in formulating his opinion, including the charges of other medical providers in the community as well as information contained within a fee and coding reference book published by Practice Management Information Corporation (PMIC). A copy of this data was produced to Defendant along with Mr. Dempsey’s affidavit.

This Court holds that Plaintiff has met its prima facie burden to establish that its charges are reasonable and also notes that Mr. Dempsey’s opinions on the issue of reasonableness of charges have been upheld on appeal by the 17th Judicial Circuit, sitting in its appellate capacity.¹

PIP Payment Methodology Options

The 2008 amendments to Fla. Stat. 627.736 created two separate and distinct PIP payment methodology options.

The default method, known as the “fact dependent” or “reasonableness” method, is set forth in Fla. Stat. 627.736(5)(a)1. and requires PIP insurers to pay for medical expenses based upon a fact intensive analysis of various “reasonableness” factors.

The second “optional” method is the “Medicare Fee Schedule” method set forth in Fla. Stat. 627.736(5)a.2, allowing PIP insurers to pay for medical services based exclusively on Medicare Fee Schedules without regard to the “reasonableness” of a provider’s charge.

In July 2013, the Florida Supreme Court in Geico General Ins. Co. v. Virtual Imaging Services, Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a] accepted from the Florida Third District Court of Appeal a certified question of great public importance which it rephrased as follows:

“WITH RESPECT TO PIP POLICIES ISSUED AFTER JANUARY 1, 2008, MAY AN INSURER LIMIT REIMBURSEMENTS BASED ON THE MEDICARE FEE SCHEDULES IDENTIFIED IN SECTION 627.736(5)(a), FLORIDA STATUTES, WITHOUT PROVIDING NOTICE IN ITS POLICY OF AN ELECTION TO USE THE MEDICARE FEE SCHEDULES AS THE BASIS FOR CALCULATING REIMBURSEMENTS?”

In answering the question in the negative, the Court held:

“Accordingly, we conclude that the insurer was required to give notice to its insured by electing the permissive Medicare fee schedules in its policy before taking advantage of the Medicare fee schedule methodology to limit reimbursements.”

The Supreme Court in Virtual Imaging made clear that a policy “election” providing notice to insureds of its intent to limit reimbursement of no-fault benefits under the Medicare Fee Schedules was required “before” an insurer could “take advantage” of the Medicare Fee Schedule methodology.

The Supreme Court changed the certified question to include the phrase “as the basis” for calculating reimbursement, intentionally broadening the scope of its holding to preclude the use of the Medicare Fee schedules contained in section 627.736(5)(a)2. “as the basis” for determining payment of no-fault expenses unless the policy of insurance expressly contained notice of the intent to utilize same.

The plain language of section 627.736 “allows an insurer to choose between two different payment calculation methodology options” and “anticipates that an insurer will make a choice”. Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]; see also State Farm Mutual Auto. Ins. Co. v. Plantation Open MRI, LLC, a/a/o Jessica Hall, 25 Fla. L. Weekly Supp. 698b (Fla. 17th Cir. App. September 27, 2017) (“[a]lthough the Fourth District Court of appeal explained that the Medicare Part B fee schedule could be a factor to determine a reasonable charge, the court reiterated that the Medicare Part 13 fee schedule cannot be used to limit an insurer’s reimbursement without the insurer first electing to do so in its policy as required by the Florida Supreme Court”); see also Northwest Center for Integrative Medicine & Rehabilitation, Inc. v. State Farm Mut. Auto. Ins. Co., 214 So.3d 679, 681-82 (Fla. 4th DCA 2017) [42 Fla. L. Weekly D446b] [citing Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]].Conclusion

The summary judgment evidence demonstrates that State Farm’s policy of insurance failed to elect to limit its reimbursement to “Medicare Part B” fee schedules as is otherwise required by binding precedent.

The summary judgment evidence demonstrates that Defendant utilized the fee schedule methodology and/or payment limitation contained in Fla. Stat. 627.736(5)(a)2. as their exclusive basis for reimbursement of Plaintiff’s claim without a specific policy election to do so.

The summary judgment evidence demonstrates that Plaintiff has met its prima facie burden to establish that its charges are reasonable in price and Defendant has failed to come forward with any affidavits opposing the reasonableness of Plaintiff’s charges.

Accordingly, based on this Court’s analysis set forth above, it is

ORDERED AND ADJUDGED that Plaintiff’s Motion for Summary Final Judgment and Motion for Entry of Final Judgment is GRANTED. Plaintiff is directed to provide the Court with a separate Final Judgment within 10 days of this Order.

__________________

¹See State Farm Mutual Auto. Ins. Co. v. Margate Pain and Rehabilitation, Inc. (Meike Reichert), Case No. CACE 14-009527 (AP), LT Case No. COCE13-012309; State Farm Mutual Auto. Ins. Co. v. Margate Pain and Rehabilitation, Inc. (Pierre Charlesca), Case No. CACE 14-009523 (AP), LT Case No. COCE13-012317; State Farm Mutual Auto. Ins. Co. v. Margate Pain and Rehabilitation, Inc. (Rhonda Metz Kanugalawatta), Case No. CACE 14-009526 (AP), LT Case No. COCE 13-012327: State Farm Mutual Auto. Ins. Co. v. Margate Pain and Rehabilitation, Inc. (Sandra Vincente), Case No. CACE 14-009515 (AP), LT Case No. COCE13-012337; State Farm Mutual Auto. Ins. Co. v. Margate Pain and Rehabilitation, Inc. (Timothy Tripp), Case No. CACE 14-010365 (AP), LT Case No. COCE13-012352; State Farm Mutual Auto. Ins. Co. v. Margate Pain and Rehabilitation, Inc. (Shadae McNutt), 25 Fla. L. Weekly Supp. 149a (Fla. 17th Cir. App. March 31, 2017); State Farm Mutual Auto. Ins. Co. v. Margate Pain & Rehabilitation, Inc. (Paul Hernandez), 25 Fla. L. Weekly Supp. 700b (Fla. 17th Cir. App. October 16, 2017); State Farm Mutual Auto. Ins. Co. v. Margate Pain & Rehabilitation, Inc. (Rosemary Ortiz-Castro), 25 Fla. L. Weekly Supp. 700a (Fla. 17th Cir. App. October 16, 2017); State Farm Mutual Auto. Ins. Co. v. Margate Pain & Rehabilitation, Inc. (Russell McCullough), 25 Fla. L. Weekly Supp. 699b (Fla. 17th Cir. App. October 16, 2017); State Farm Mutual Auto. Ins. Co. v. Margate Pain & Rehabilitation, Inc. (Susan Roseboro), 25 Fla. L. Weekly Supp. 701a (Fla. 17th Cir. App. October 16, 2017); State Farm Mutual Auto. Ins. Co. v. Margate Pain & Rehabilitation, Inc. (Michael Olivera), 25 Fla. L. Weekly Supp. 699c (Fla. 17th Cir. App. October 16, 2017); State Farm Mutual Auto. Ins. Co. v. Margate Pain & Rehabilitation, Inc. (Silvio Joselin), 25 Fla. L. Weekly Supp. 701b (Fla. 17th Cir. App. October 16, 2017); State Farm Mutual Auto. Ins. Co. v. Margate Pain & Rehabilitation, Inc. (Rafael Rodriguez), 25 Fla. L. Weekly Supp. 701c (Fla. 17th Cir. App. October 16, 2017).