26 Fla. L. Weekly Supp. 706a

Online Reference: FLWSUPP 2609TORRInsurance — Personal injury protection — Medical expenses — Reasonableness of charges — Affidavit of provider’s corporate officer was not conclusory where it was based on facts personally known to the officer and properly averred that the medical charges do not exceed what is customarily charged in the community with similar providers — Insurer was not precluded from having the opportunity to challenge medical provider’s charges under section 627.736(5)(a)1 despite its failure to elect to use the fee schedule limitation under section 627.736(5)(a)2 in its policy — Error to reject insurer’s opposing expert affidavits at summary judgment stage where affiants possessed the necessary background, knowledge, and skill in their disciplines to qualify as experts

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Appellant, v. GABLES INSURANCE RECOVERY, INC., a/a/o Yanai Torres, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 15-103 AP. L.T. Case No. 13-017271 SP 25. October 25, 2018. An Appeal from the County Court for Miami-Dade County. Marino Pedraza, Judge. Counsel: Nancy W. Gregoire, Kirschbaum, Birnbaum, Lippman & Gregoire, PLLC, and Luis N. Perez of Perez & Rodriguez, P.A., for Appellant. Jorge A. Gutierrez, Law Offices of Jorge A. Gutierrez, P.A., and G. Bart Billbrough, Billbrough & Marks, P.A., for Appellee.

(BEFORE SAYFIE, WALSH, and WOLFSON, JJ.)

(SAYFIE, J.) On June 1, 2010, Yanai Torres was involved in an automobile accident and sustained personal injuries. She was insured under an automobile policy with personal injury protection (PIP) benefits by Appellant State Farm Mutual Automobile Insurance Co. (State Farm). She sought treatment from All X-Ray Diagnostic Services Corp. (All X-Ray), who assigned its rights to Appellee, Gables Insurance Recovery, Inc. (GIR). The provider moved for summary judgment on the issue of reasonableness of the charges, totaling $2,975.00, for the patient’s X-Rays. State Farm submitted two affidavits in response to the motion for summary judgment. The trial judge struck State Farm’s affidavits and granted summary judgment for the provider on the issue of reasonableness, and State Farm appeals this ruling.

State Farm’s first argument is that the issue of the reasonableness of a charge is always a question of fact for a jury even in the absence of contradictory evidence. State Farm’s argument was rejected in State Farm Mutual Automobile Insurance Co. v. Gables Insurance Recovery, Inc., 25 Fla. L. Weekly Supp. 857a (Fla. 11th Cir. Ct. Sept. 28, 2017), cert. dismissed, Case No. 3D17-2311 (Fla. 3d DCA Dec. 20, 2017), because State Farm relies upon cases testing jury verdicts and not summary judgment orders.¹ Further, an opposing party on summary judgment must come forward with counter-evidence sufficient to create a genuine issue of material fact. Harvey Bldg., Inc. v. Haley, 175 So. 2d 780, 783 (Fla. 1965); Sokoloff v. Oceania I Condo. Ass’n., Inc., 201 So. 3d 664 (Fla. 3d DCA 2016) [41 Fla. L. Weekly D759a].

Next, concerning the issue of the reasonableness of the x-ray charges, State Farm challenges the legal sufficiency of GIR’s affidavit of Sabino Ferro² as conclusory, and argues that the prevailing amounts contained therein were based on hearsay. While GIR had the burden to prove that the medical x-ray charges were reasonable, Allstate Ins. Co. v. Derius, 723 So. 2d 271, 272 (Fla. 4th DCA 1998) [25 Fla. L. Weekly D2730a], Mr. Ferro’s supporting affidavit complies with the requirements of Rule 1.510(e). Since it is based on facts personally known to him, Mr. Ferro is competent to testify as to the matters stated in the affidavit, and he properly avers that the x-ray charges do not exceed what is customarily charged in the community with similar providers. The affidavit is not conclusory (reading the affidavit in the light most favorable to the non-moving party). See Millennium Radiology, LLC (a/a/o Juan Romero) v. United Auto. Ins. Co., 24 Fla. L. Weekly Supp. 441a (Miami-Dade Cty. Ct. July 20, 2016) (owner of radiological center testified based upon her experience what a reasonable charge is, based upon comparison of other similar centers’ charges and referring to recognized coding and charging publications and had been fully reimbursed by other insurers for her charges).

Moreover, GIR is correct that State Farm’s hearsay argument contesting the prevailing amounts contained in the affidavit of Mr. Ferro was not preserved for appellate review. An appellate court may not consider unpreserved arguments raised for the first time on appeal and those arguments cannot form the basis for a reversal. Dade Cty. School Bd. v. Radio Station WQBA, 731 So. 2d 638, 644 (Fla. 1999) [24 Fla. L. Weekly S216a]; Aills v. Boemi, 41 So. 3d 1022, 1024 (Fla. 2d DCA 2010) [35 Fla. L. Weekly D1778a]. Based on this record, we find that the trial court correctly determined that GIR satisfied its burden of proof that All-X-Ray’s charges were reasonable. The burden of proof shifted to State Farm to counter the proof to create a factual dispute.

State Farm filed two affidavits as to the reasonableness of the x-ray charges. State Farm argues that its opposing affidavits of Darrell D. Spell, a consulting actuary since 1982, and Dr. Edward A. Dauer, M.D., a radiologist since 1976 who teaches at Mt. Sinai Medical Center and is a research associate professor at the University of Miami, were sufficient to create a material issue of fact (along with an updated affidavit of Mr. Spell).³ Furthermore, State Farm’s experts properly considered the Medicare Part B physician’s fee schedule as a factor under section 627.736(5)(a)1, Florida Statutes (2010). That statute, entitled “charges for treatment of injured persons,” is part of the Florida Motor Vehicle No-Fault Law.⁴ Therein, the reasonableness of the charges for a medical provider is a fact-dependent inquiry and is determined by a consideration of various elements. Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So. 3d 147, 155-56 (Fla. 2013) [38 Fla. L. Weekly S517a].⁵ State Farm is correct that despite an insurer’s failure to elect to use the fee schedule limitation under (5)(a)2. in its policy, it is not precluded from having an opportunity to challenge the reasonableness of a medical provider’s charges under section 627.736(5)(a)1. See Progressive Select Ins. Co. v. Emergency Physicians of Central Fla., 202 So. 2d 437, 438 (Fla. 5th DCA 2016) [41 Fla. L. Weekly D2145a] (even after reimbursement improperly reduced based on the statutory fee schedules, an insurer was entitled to challenge the reasonableness of the medical charges).

Section 627.736(5)(a)1. allows (but does not require) an insurer to consider all of the listed statutory factors including “federal and state medical fee schedules” as one among a range of other factors when determining the reasonableness of a charge. Allstate Ins. Co. v. Orthopedic Specialists, 212 So. 3d 973, 979 (Fla. 2017) [42 Fla. L. Weekly S38a]; State Farm Mut. Auto. Ins. Co. v. AIA Mgmt. Servs., LLC, a/a/o Farano Muselaire, 25 Fla. L. Weekly Supp. 860a (Fla. 11th Cir. Ct. Oct. 25, 2017) (when determining reasonableness of a medical charge, evidence may be considered relating to the Medicare fee schedules incorporated into the statute); United Auto. Ins. Co. v. Hallandale Open MRI, LLC., 21 Fla. L. Weekly Supp. 399d (Fla. 17th Cir. Ct. Dec. 11, 2013) (holding that the PIP statute does not require consideration of every factor).

GIR argued that the opposing affidavits did not create a genuine issue of material fact because Medicare fee schedules are not relevant in PIP cases and should not be used, since section 627.736(5)(a)1. does not contemplate consideration of Medicare fee schedules and reimbursement schedules. GIR relies on Hialeah Medical Associates, Inc. a/a/o Ana Lexcano v. United Automobile Insurance Co., 21 Fla. L. Weekly Supp. 487b (Fla. 11th Cir. Ct. Mar. 7, 2014).

However, Lexcano is factually distinguishable and inapplicable to this case, because the treatment in Lexcano was covered under a 2007 policy, and GIR’s treatment occurred in 2010. See State Farm Mut. Auto. Ins. Co. v. Gables Ins. Recovery, Inc., 25 Fla. L. Weekly Supp. 857a (Fla. 11th Cir. Ct. Sept. 28. 2017). The 2007 statute did not permit consideration of federal fee schedules while the 2010 statute, applicable here, expressly permits such consideration. The court in Lexcano held that while Medicare fee schedules were not relevant in determining the reasonableness of treatment in that case, the court pointed out that the 2008 amendment to the PIP statute incorporated the use of such fee schedules. The Lexcano policy was issued prior to that change in the PIP law. Id.

Mr. Spell’s updated affidavit addresses the additional statutory factors of reimbursement levels in the community and the usual customary charges of section 627.736(5)(a)1. . Furthermore, Mr. Spell indicated that he referenced the Medicare Part B physician’s fee schedule as one of the statutory factors and fee schedules he used to arrive at his conclusion that All-XRay’s charges were unreasonable. Dr. Dauer’s affidavit also addressed reimbursement levels in the community, a statutory factor of section 627.736(5)(a)1. and indicated that he referenced Medicare Part B physician’s fee schedule as one of the statutory factors he used to arrive at his conclusion that All-X-Ray’ s charges were unreasonable.

GIR argues that the opposing affidavits of Mr. Spell and Dr. Dauer failed to comply with the admissibility of expert testimony governed by section 90.702, Florida Statutes⁶ since their opinions were not based on sufficient facts or data or reliable principles and methods because both were not qualified as experts. At the summary judgment stage, the trial court should not have rejected the opposing expert affidavits. Hernandez v. United Auto. Ins. Co., 730 So. 2d 344, 345 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D646a]. Mr. Spell and Dr. Dauer were qualified as experts. State Farm is correct that an expert may be qualified by experience and education. The court in Kumho Tire Co. Ltd. v. Carmichael, 526 U.S. 137, 147 (1999) emphasized that an expert may testify to an opinion that is not based on “firsthand knowledge or observation” as long as it has a reliable basis in the “knowledge and experience of his discipline” and that an expert “might draw a conclusion from a set of observations based on extensive and specialized experience.” Id. at 148. An expert may be qualified on the basis of experience so long as the connection between the experience and the expert opinion is explained. Baan v. Columbia Cty., 180 So. 3d 1127, 113334 (Fla. 1st DCA 2015) [40 Fla. L. Weekly D2707a]. Mr. Spell and Dr. Dauer have the necessary background, knowledge, and skill in their disciplines.

Additionally, the Supreme Court of Florida recently in DeLisle v. Crane Co., No. SC16- 2182 (Fla. Oct. 15, 2018) [43 Fla. L. Weekly S459a] held that the Legislature’s amendment of Rule 90.702 incorporating the Daubert standard was unconstitutional where the rules on admission of scientific evidence are procedural. Accordingly, the Court rejected the Daubert standard. Frye is only applicable to test the admissibility of new or novel scientific evidence. Therefore, there is no surviving challenge to the competence of State Farm’s expert witnesses, and the affidavits should have been admitted. Based on this record, we find that the opposing affidavits of Mr. Spell and Dr. Dauer were sufficient to create a genuine issue of material fact on the issue of the reasonableness of the x-ray charges, and summary judgment was not proper below.

Accordingly, we reverse the final summary judgment in this appeal. State Farm’s motion for appellate attorney’s fees under Florida Rule of Appellate Procedure 9.400(b) and section 768.79, Florida Statutes (2010) is hereby granted, conditioned on it prevailing below. GIR’s motion for appellate attorney’s fees under Florida Rule of Appellate Procedure 9.400(b) and section 627.428, Florida Statutes (2010) is hereby denied.

REVERSED and REMANDED. (WALSH and WOLFSON, JJ. concur.)

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¹State Farm’s reliance on Garrett v. Morris Kirschman & Co. Inc., 336 So. 2d 566, 571 (Fla. 1976) is distinguishable since it does not involve a summary judgment motion.

²The owner and senior corporate officer of All X-Ray.

³GIR argues that the updated affidavit of Mr. Spell electronically filed [service completed] two business days before the final summary judgment hearing was untimely under Florida Rule of Civil Procedure Rule 1.510(c). That Rule requires that “[t]he adverse party may serve opposing affidavits by mailing the affidavits at least 5 days prior to the day of the hearing, or by delivering the affidavits to the movant’s attorney no later than 5:00 p.m., two business days prior to the day of hearing.” However, the record shows that the trial court below never specifically ruled whether the updated affidavit of Mr. Spell was untimely, nor ultimately excluded it.

⁴The language of the statute provides a guideline for a determination of reasonable medical charges. This statute states in relevant part:

[a]ny physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for 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, . . . . In no event, however, may such a charge be in excess of the amount the person or institution customarily charges for like services or supplies. 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.

⁵Insurers were given the choice of two statutory payment methodologies: 1) they could pay the reasonable amount of charges pursuant to subsection (5)(a)1 or 2) they could limit reimbursement to 200% of the Medicare Part B participating physicians fee schedule for 2007 or the current year, whichever is greater under subsection (5)(a)2. Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So. 3d 147, 157 (Fla. 2013) [38 Fla. L. Weekly S517a] (“[T]he 2008 amendments provided an alternative, permissive way for an insurer to calculate reimbursements to satisfy the PIP statute’s reasonable medical expenses coverage mandate.”).

⁶This statute states that “[i]f scientific, technical or other specialized knowledge will assist the trier of fact in understanding the evidence or in determining a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify about it in the form of an opinion or otherwise, if: (1) The testimony is based upon sufficient facts or data; (2) The testimony is the product of reliable principles and methods; and (3) The witness has applied the principles and methods reliably to the facts of the case.”