27 Fla. L. Weekly Supp. 982a

Online Reference: FLWSUPP 2711TOREInsurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Payment using 2007 Medicare Limiting Charge was proper and did not constitute gratuitous payment or bad faith — Having exhausted benefits in payment of valid timely bills, insurer is not liable for further payments to medical provider

SPINE & EXTREMITY REHABILITATION CENTER, INC., a/a/o Abisai Tores, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 19th Judicial Circuit in and for St. Lucie County. Case No. 562019SC000400AXXXHC. December 11, 2019. Daryl Isenhower, Judge. Counsel: Joshua Costello, Schiller, Kessler & Gomez, PLC, Ft. Lauderdale, for Plaintiff. Melissa McDavitt and Madison O’Connell, Conroy Simberg, West Palm Beach, for Defendant.

FINAL JUDGMENT AND ORDER GRANTINGDEFENDANT’S MOTION FOR FINAL SUMMARYJUDGMENT REGARDING EXHAUSTION OF BENEFITS

THIS CAUSE having come before the Court for hearing on November 18, 2019 upon Defendant, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY’s Motion for Final Summary Judgment based upon Exhaustion of Benefits. The Court, having read the submissions by the parties, having heard argument of counsel and being otherwise duly advised in the premises, makes the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. The subject action involves a claim for personal injury protection insurance benefits filed by Plaintiff, SPINE & EXTREMITY REHABILITATION CENTER, INC. (hereinafter “Plaintiff”) as assignee of ABISAI TORES (hereinafter “Claimant”) against Defendant, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (hereinafter “Defendant”), arising out of a motor-vehicle accident that occurred on September 13, 2017.

2. Plaintiff alleges that State Farm has failed to make payments for PIP benefits allegedly owed to it for services rendered to the Claimant arising from an automobile accident occurring on September 13, 2017.

3. On the date of the accident, the Claimant was covered by a policy of automobile insurance which provided, inter alia, $10,000.00 in personal injury protection benefits and no medical payments coverage with State Farm. Claim number 59-1418-K40 was assigned to the claim for benefits.

4. At hearing the parties agreed the 9810A policy of insurance properly elects the schedule of maximum charges for reimbursement.

5. Plaintiff submitted its insurance claims forms for treatment of Claimant, accompanied by medical records, for dates of service from October 23, 2017 through March 30, 2018.

6. The Claimant sought treatment with several other medical providers as well, who in turn submitted bills to State Farm for that treatment. State Farm had an obligation to evaluate all the bills received from all of the medical providers Abisai Torres treated with following the subject accident, and render payment subject to Florida Statute 627.736 and the policy of insurance.

7. State Farm reimbursed Abisai Torres’ medical providers with valid claims, including the Plaintiff, in accordance with Florida Statute 627.736 and the 9810A policy of insurance.

8. On or about April 10, 2018, State Farm issued a payment to the Plaintiff. By virtue of that payment of benefits, State Farm exhausted all remaining benefits under the PIP portion of the subject contract of insurance between State Farm and Abisai Torres. As of April 10, 2018, State Farm issued payment in the total amount of $10,000, the full amount available under the subject policy of insurance.

9. It is undisputed Defendant paid the total $10,000.00 of Personal Injury Protection Benefits under the subject policy of insurance.

10. Defendant moved for summary judgment on the grounds that the $10,000.00 in available Personal Injury Protection Benefits were properly exhausted.

11. Based on these facts, this Court has determined that Defendant’s motion for summary judgment should be granted.

CONCLUSIONS OF LAW

A. EXHAUSTION OF BENEFITS

12. As a result, based on the record evidence presented in this case, the benefits under the Policy were legally limited to $10,000. Since the $10,000.00 limit has been paid out, Defendant had no additional liability to Plaintiff when this case was filed, and continues to owe no additional liability to Plaintiff. See Simon v. Progressive Exp. Ins. Co., 904 So. 2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]; Progressive Am. Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a], and Sheldon v. United Services Auto. Ass’n, 55 So. 3d 593 (Fla. 1st DCA 2010) [36 Fla. L. Weekly D23a]. Absent a finding of bad faith, an insurer is not liable to pay any further PIP Benefits in excess of policy limits. Progressive Am. Ins. Co. v. Stand-Up MRI, 990 So. 2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a].

13. It is undisputed that State Farm paid the available $10,000.00 in PIP Benefits under the policy for valid claims submitted by the Claimant’s numerous medical providers. Because payment was made in accordance with the No-Fault Statute and 9810A policy, State Farm cannot be held liable for the Plaintiff’s bills beyond the exhaustion of benefits, absent a finding of bad faith. There is no bad faith arising from State Farm’s payment of the insured’s medical bills in the ordinary course of treatment and submission of those bills.

B. BAD FAITH

14. “An insurer does not act in bad faith when it processes the plaintiff’s bill in accordance with then-existing law. If an insurer has an objectively reasonable basis under Florida law for reducing or denying the provider’s charge(s) in the manner that it did, then it possesses the reasonable proof that is necessary under subsection (4)(b).” Emergency Physicians, Inc. d/b/a Emergency Resources Group, a/a/o Thomas Losoncy v. Auto-Owners Ins. Co., 24 Fla. L. Weekly Supp. 832b (7th Jud. Cir. December 6, 2016) (citing Virtual Imaging Svcs., Inc. a/a/o Yudi Vigoreaux v. United Svcs. Auto. Ass’n, 18 Fla. L. Weekly Supp. 491a (Fla. 11th Jud. Cir. February 2, 2011); and Wellness Assoc. of Fla., Inc. a/a/o Daniel North v. USAA Casualty Ins. Co., 18 Fla. L. Weekly Supp. 1056a (Fla. 15th Jud. Cir, July 26, 2011)). When an insurer takes a legal position based on the applicable statute, bad faith does not exist if there is no binding case law on the issue, even if there were non-binding County Court opinions supporting the alternative. Pembroke Pines MRI, Inc. a/a/o Brian Schoedinger v. USAA Casualty Ins. Co., 17 Fla. L. Weekly Supp. 479a (Fla. 17th Jud. Cir. March 29, 2010).

15. It is undisputed that Plaintiff has not alleged bad faith by State Farm in its processing of the claim in any pleading, including Plaintiff’s Motion for Summary Judgment. Thus, absent an allegation of showing of bad faith, State Farm is not liable for bills in excess of policy limits.

C. FLORIDA STATUTE 627.736(5)(A)(2)

16. Plaintiff contends that payment for at the 2007 Limiting Charge under Medicare Part B to an MRI provider was voluntary and/or gratuitous, as it exceeded the amount State Farm was obligated to pay under the policy and Florida Statute.

17. However, Florida Statute 627.736(5)(a)(2) is silent as to whether an insurer should apply the participating or non-participating fee schedule when the 2007 fee schedule is higher than the applicable- fee schedule for the service year in which the services are rendered.

The current version of the PIP Statute Florida Statute §627.736(5)(a)(2) states:

[T]he applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect on March 1 of the service year in which the services, supplies, or care is rendered and for the area in which such services, supplies, or care is rendered, and the applicable fee schedule or payment limitation applies to services, supplies, or care rendered during that service year, notwithstanding any subsequent change made to the fee schedule or payment limitation, except that it may not be less than the allowable amount under the applicable schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B. For purposes of this subparagraph, the term ‘service year’ means the period from March 1 through the end of February of the following year.” (Emphasis added.)

Prior to 2012, Florida Statute §627.736(5)(a)(3) stated,

“[T]he applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect at the time the services, supplies, or care was rendered and for the area in which such services were rendered, except that it may not be less than the allowable amount under the participating physicians schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B.”

18. It is undisputed the Legislature replaced the “participating” with “applicable” when describing which fee schedule to use if the 2007 fee schedule is higher than the service year.

19. It is also undisputed the statute does not explicitly prohibit of the 2007 Limiting Charge for determining the proper reimbursement.

20. As such, it appears the Legislature indicated multiple fee schedule amounts are proper for reimbursing a claim, other than just the Participating Physician Fee Schedule.

21. There is ambiguity as to the proper fee schedule amount an insurer should utilize in reimbursement when the 2007 fee schedule is higher than the applicable service year fee schedule.

22. Any ambiguity should be resolved in favor of the insured or the insured’s assignor’s (medical providers) State Farm Mutual Auto Ins. Co. v. Menendez, 70 So.3d 566, 570 (Fla. 2011) [36 Fla. L. Weekly S469a].

23. Because the payment at the 2007 Limiting Charge did not exceed its obligation under the statute, the payment was neither voluntary nor gratuitous.

POLICY LANGUAGE

24. At hearing, the parties agreed the 9810A policy of insurance, applicable to this claim, properly elected the schedule of maximum charges.

25. The policy, as indicated below, mirrors the No-Fault Statute’s language regarding the applicable fee schedule for reimbursement.

26. The 9810A policy of insurance, of which Plaintiff’s seeks reimbursement under states in part:

We will pay in accordance with the No-Fault Act properly billed and documented reasonable charges for bodily injury to an insured caused by an accident resulting from the ownership, maintenance, or use of a motor vehicle.

. . .

We will limit payment of Medical Expenses described in the Insuring Agreement of this policy’s No-Fault Coverage to 80% of a properly billed and documented reasonable charge, but in no event will we pay more than 80% of the following No-Fault Act “schedule of maximum charges” including the use of Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers

. . .

For purposes of the above, the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect on March 1 of the year in which the services, supplies, or care is rendered and for the area in which such services, supplies, or care is rendered, and the applicable fee schedule or payment limitation applies throughout the remainder of that year, notwithstanding any subsequent change made to the fee schedule or payment limitation, except that it will not be less than the allowable amount under the applicable schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B.

(9810A Policy Form, Ex. 1 at 14-16 (underlining added)).

27. Identical to the No-Fault Statute, the 9810A policy does not specify whether the “participating” or “limiting” amount should be utilized when the 2007 fee schedule is higher than the applicable service year fee schedule and instead uses the word “applicable”.

28. Like the No-Fault Statute, the 9810A policy does not expressly prohibit the “Limiting Charge” payment.

29. Based on the ambiguity, State Farm paid the Insured’s providers at the highest possible rate in accordance with policy of insurance, which was the 2007 Limiting Charge amount.

30. State Farm’s payment to the Insured’s providers did not exceed its contractual obligation and thus were not voluntary or gratuitous.

CONCLUSION

It is undisputed that benefits totaling $10,000.00 were exhausted by payment to legitimate claims of the Claimant’s providers. It is also undisputed that State Farm is not liable for benefits in excess of the $10,000.00 under the policy absent a finding of bad faith, which has not been alleged in the pleadings.

There is no logical basis for an allegation of bad faith (and Plaintiff has not asserted a bad faith claim) by Defendant in processing of the Claimant’s medical bills. The payments made to each of the Claimant’s providers did not strategically or prematurely exhaust benefits nor did Defendant gain by these payments. Even if State Farm had paid less to any one of the Insured’s providers, it would have still paid a total of $10,000.00 in benefits available under the policy. State Farm’s payment of the less than $100.00 disputed amount to one provider over another would not have achieved any more positive result for State Farm and thus cannot logically be considered bad faith.

Plaintiff’s assertion that payment at the 2007 Limiting Charge amount exceeded State Farm’s contractual and statutory obligation is not supported by the evidence. At the time of State Farm processed the instant claim and at present, there is a lack of binding clarification from the Courts as to the use of the 2007 Limiting Charge. Thus, State Farm had a reasonable basis to process the bills in the manner it did.

Because the Statute and Policy are ambiguous and fail to address whether the “participating” or “limiting” amount should be utilized when the 2007 fee schedule is higher than the applicable service year fee schedule, State Farm must resolve the dispute in favor of the insured’s medical providers by providing the highest allowable amount under the statute and policy. As such, State Farm’s payments at the 2007 Limiting Charge amount have not exceeded its statutory or contractual obligation and thus were not voluntary or gratuitous.

ORDERED and ADJUDGED, as follows:

1. That Defendant’s Motion for Summary Judgment is hereby GRANTED and Plaintiff’s Motion is DENIED.

2. That judgment be and hereby is entered for Defendant, that Plaintiff take nothing by this action and that Defendant go hence without day.

The Court reserves jurisdiction to determine attorney’s fees and costs.