27 Fla. L. Weekly Supp. 498a

Online Reference: FLWSUPP 2706DECHInsurance — Personal injury protection — Appeals — Where Florida Supreme Court receded from opinion determining that Frye standard was appropriate test to evaluate expert witness’s qualifications after issuance of circuit court’s opinion holding that trial court erred in applying Daubert standard but before time for rehearing had passed, circuit court must apply Daubert test in analysis on motion for rehearing — Trial court abused its discretion in finding that affidavit of insurer’s expert witness failed to meet Daubert standard where witness qualifies as expert on reasonableness of charges for x-ray and MRI services, witness used reliable principles and methods in making his determination of reasonableness, affidavit was based on sufficient facts and data, and affidavit applied principles and methods reliably to facts of case — Further, trial court erred in rejecting affidavit on ground that Medicare rates are not applicable to issue of reasonableness of charges — Summary judgment is reversed

UNITED AUTOMOBILE INSURANCE CO., Appellant, v. MIAMI DADE COUNTY MRI, CORP. a/a/o Rene Dechard, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 2017-183 AP. L.T. Case No. 2013-011978 SP 23. August 12, 2019. On Appeal from the County Court in and for Miami-Dade County, Judge Spencer Multack. Counsel: Michael J. Neimand, for Appellant. Kenneth J. Dorchak, for Appellee.

OPINION[Original Opinion at 27 Fla. L. Weekly Supp. 226a]

(Before PETER R. LOPEZ, ROSA FIGAROLA, and ABBY CYNAMON, JJ.)

(LOPEZ, J.) Upon consideration of Appellee’s Motion for Rehearing, we grant rehearing, withdraw the opinion of May 16, 2019, and substitute the following opinion in its place.

Facts

United Automobile Insurance Company (“United” or “Insurer”) appeals a summary judgment entered in favor of Miami Dade County MRI, Corp. (“MDC MRI” or “Provider”). United’s insured, Rene Dechard (“Insured”) sustained injures as the result of a motor vehicle accident that occurred on January 14, 2011. MDC MRI provided diagnostic services (an MRI and x-rays). United paid less than the amount billed by MDC MRI, and MDC MRI sued for the difference. United disputed that MDC MRI’s charges were reasonable. MDC MRI moved for summary judgment, submitting the affidavit of Llina Milian (“Milian”), its operations manager. It also relied on Practice Management Information Corp.’s Medical Fees in the United States. United relied on an affidavit of Edward Dauer, M.D. (“Dr. Dauer”) and two deposition transcripts.

United argued below that Milian’s affidavit was conclusory and deficient, while MDC MRI argued that Dr. Dauer’s affidavit was conclusory and that it failed to meet the requirements of Daubert.¹ United argued that the trial court should not apply Daubert because, at the time, the Florida Supreme Court had chosen not to adopt it (although United also argued that Dr. Dauer’s affidavit is sufficient under either the Daubert standard or the Frye standard²).

Daubert

In 2013, the Florida Legislature amended section 90.702, Florida Statutes, to adopt the Daubert standard as the test to be used in Florida for evaluating an expert witness’s qualifications. The Legislature intended to replace the longstanding Frye standard, which Florida had used for decades. When United challenged the applicability of Daubert below, the validity of the Daubert amendment was in question. The Florida Supreme Court had issued an opinion declining to adopt Daubert to the extent that it is procedural, although it declined to address its constitutionality until a proper case on the issue presented itself. In re Amendments to Florida Evidence Code, 210 So. 3d 1231, 1239 (Fla. 2017) [42 Fla. L. Weekly S179a]. Therefore, United argued below that the trial court should apply the Frye standard instead of the Daubert standard. The trial court disagreed, and determined that since the Florida Supreme Court had not found Daubert to be unconstitutional, it would presume the law written at the time of the order would control. Accordingly, it applied the Daubert standard to Dr. Dauer’s affidavit.

The trial court found that Dr. Dauer’s affidavit in this case failed to meet the Daubert standard. The trial court further found the affidavit to be insufficient because it relied on Medicare, HMO, and PPO reimbursement rates. As such, it granted summary judgment in MDC MRI’s favor as to reasonableness. The trial court certified the question of Daubert’s constitutionality to the Third DCA, but the Third DCA declined to accept review and transferred the case to this Court.

Subsequent to the trial court’s decision below, the Florida Supreme Court rejected the Legislature’s adoption of the Daubert standard and determined that the Frye standard should be used in Florida. Delisle v. Crane Co., 258 So. 3d 1219 (Fla. 2018) [43 Fla. L. Weekly S459a]. However, seven months later (exactly one week after the original opinion in this case was entered), the Florida Supreme Court receded from its decision in Delisle, and adopted the Daubert amendments to section 90.702, Florida Statutes. In re Amendments to Florida Evidence Code, 44 Fla. L. Weekly S170a (Fla. May 23, 2019). Thus, Daubert, not Frye, is the current test to evaluate an expert’s qualifications. We must apply Daubert to our analysis in this appeal because, pursuant to the “pipeline rule,” the disposition of a case on appeal should be made in accordance with the law in effect at the time of the appellate court’s decision. See Kemp v. State, 44 Fla. L. Weekly D1246a (Fla. 4th DCA May 8, 2019). Since the Florida Supreme Court changed the law regarding the test for the admissibility of expert testimony after our opinion was issued in this case on May 16, 2019, but before the time for rehearing passed and the opinion became final, the portion of that opinion declaring that the trial court erred in applying Daubert instead of Frye is no longer correct under current law.

Application of Daubert to the Instant Case

Before the Florida Supreme Court adopted the Daubert standard on May 23, 2019, United contested the applicability of Daubert. But, now that the Florida Supreme Court has unequivocally adopted the Daubert standard, as codified by the Legislature in section 90.702, Florida Statutes, United acknowledges in its response in opposition to the motion for rehearing that the Daubert standard applies to the instant case. However, it maintains that the summary judgment entered below should still be reversed, arguing that the affidavit submitted by Dr. Dauer in this case is sufficient under Daubert. The Provider, on the other hand, asserts that the trial court should be affirmed because it applied the Daubert standard, which comports with current law. To the extent that the Provider suggests that the trial court’s application of the Daubert standard should result in an automatic affirmance, we disagree. Instead, we must review the trial court’s application of the Daubert standard to Dr. Dauer’s affidavit.

Although we are reviewing a summary judgment motion, the trial court granted summary judgment based on its rejection of an expert’s opinion, and that affects our standard of review. “When considering an appeal of an order on summary judgment, an appellate court reviews the evidence de novo, and interprets the evidence contained in the record, including any affidavits submitted, in the light most favorable to the non-moving party.” State Farm Mut. Auto. Ins. Co. v. Progressive Health Servs. a/a/o Fernando Angulo, 27 Fla. L. Weekly Supp. 15a (Fla. 11th Cir. Ct. July 12, 2018) (Angulo) (citing Rakusin Law Firm v. Estate of Dennis, 27 So. 3d 166, 166-67 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D296a]). “ ‘If the record on appeal reveals the merest possibility of genuine issues of material fact, or even the slightest doubt in this respect, the summary judgment must be reversed.’ ” Ortega v. Citizens Prop. Ins. Corp., 257 So. 3d 1171, 1173 (Fla. 3d DCA 2018) [43 Fla. L. Weekly D2427b] (quoting Piedra v. City of N. Bay Vill., 193 So. 3d 48, 51 (Fla. 3d DCA 2016) [41 Fla. L. Weekly D1087a]). However, when, as occurred in the instant case, a trial court rules on a timely and proper objection to an expert’s opinion, including a ruling based on Daubert, the review of that ruling is by the abuse of discretion standard. Angulo, 27 Fla. L. Weekly Supp. 15a (citing Bunin v. Matrixx Initiatives, Inc., 197 So. 3d 1109 (Fla. 4th DCA 2016) [41 Fla. L. Weekly D1308a] and Booker v. Sumter Cty. Sherriff’s Office, 166 So. 3d 189 (Fla. 1st DCA 2015) [40 Fla. L. Weekly D1291c]).

A trial court’s discretion when ruling on the admissibility of an expert’s opinion is so broad that it is considered conclusive, unless its decision was based on an erroneous application of the law or an incorrect legal principle. See Lake Hosp. and Clinic, Inc. v. Silversmith, 551 So. 2d 538 (Fla. 4th DCA 1989) (“A trial court’s decision on the qualifications of an expert is ordinarily conclusive, and entitled to great weight on appeal, unless it is shown that the trial court applied erroneous legal principles in arriving at its decision.”); but see McBean v. State, 688 So. 2d 383, 386 (Fla. 4th DCA 1997) [22 Fla. L. Weekly D347c] (explaining that an appellate court may reach the opposite position of the trial court regarding an expert’s qualifications when the trial court reached its decision by applying incorrect legal principles). When a trial court excludes expert testimony which complies with the requirements for admission, that is legal error, and not within the trial court’s discretion. See Meyer v. Caruso, 731 So. 2d 118, 123 (Fla. 4th DCA 1999) [24 Fla. L. Weekly D990c]. Furthermore, when, as here, the trial court rules on a written affidavit, without conducting an evidentiary hearing, the appellate court can review an expert’s affidavit “and draw its own legal conclusions about whether the affidavit violated Daubert, and whether the trial court abused its discretion in disregarding Dr. Dauer’s affidavit.” United Auto. Ins. Co. v. Miami Dade Cty. MRI Corp. a/a/o Javier Rodriguez, Case No. 16-453 AP at 6 (Fla. 11th Jud. Cir. Ct. July 25, 2019) (Rodriguez) [27 Fla. L. Weekly Supp. 501a].

Under the Daubert standard, as codified in section 90.702, Florida Statutes, and now adopted by the Florida Supreme Court:

If 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.

§ 90.702, Fla. Stat. (2013).

Knowledge, Skill, Experience, Training, or Education

Whether Dr. Dauer may provide evidence under Daubert depends, first, on whether he is qualified, by knowledge, skill, experience, training, or education, as an expert on reasonable charges for the services provided in this case (a diagnostic MRI and x-rays).

In Dr. Dauer’s affidavit, he states that he has been a medical doctor licensed in Florida since 1976, and that he is Board Certified in Diagnostic Radiology by the American Board of Radiology. He states that he is the Medical Director of Radiology at Florida Medical Center Hospital in Lauderdale Lakes; he is a managing member of Broward PET Imaging Center; he is a member of the medical teaching staff at Mt. Sinai Medical Center, Miami Beach; and he is a Research Associate Professor of Biomedical Engineering, Radiology, and Family Medicine at the University of Miami. He states that, in his professional practice as a medical doctor over the last 40 years, he has “treated patients injured in automobile accidents and reviewed and evaluated medical records and bills for patients who were injured in automobile accidents and received medical treatment and diagnostic studies.” He states that he has owned and operated diagnostic centers in Broward, and that Broward PET Imaging Center (which he operates and is a managing member of) is a diagnostic center which provides services including cervical spine, thoracic spine, lumbar spine, knee and skull radiographs, as well as cervical spine MRI imaging. He states that he conducts numerous peer reviews which provides him the opportunity to review the medical records of other physicians and their patients, allowing him to routinely review the charges and reimbursements for the medical services at issue therein. In the course of conducting peer reviews, he has reviewed, considered, and evaluated the medical charges and reimbursements of hundreds of persons, not his patients, who were injured in automobile accidents and received medical treatment, including x-rays, MRIs, and CT scans. His affidavit provides that he has “therefore obtained extensive personal knowledge and professional expertise regarding medical care and medical charges and medical reimbursements, including medical care and medical charges and medical reimbursements in the community for x-rays, MRIs, and CT scans, in the South Florida communities of Miami-Dade and Broward Counties,” including technical fees as well as professional fees.

Based on his knowledge, skill, experience, training, and education, it cannot reasonably be questioned that Dr. Dauer is qualified as an expert concerning the reasonableness of charges for diagnostic MRI and x-ray services.

Principles and Methods

For Dr. Dauer’s testimony (in this case, his affidavit) to be admissible, Daubert also requires that it be the product of reliable principles and methods. In paragraph 9 of his affidavit, Dr. Dauer sets forth the principles and methods which he used to determine whether MDC MRI’s charges in this case were reasonable. His methodology comports with the methodology set forth in the 2009 version of section 627.736(5)(a)(1) that applies to this case. Dr. Dauer states that he considered a) reimbursement levels and charges in the community; b) his own charges in the community and payments received by cash patients without insurance; c) “[v]arious federal and state medical fee schedules applicable to motor vehicles and other insurance coverages including worker’s compensation, Medicare, HMO/PPO, and other third party insurance carriers”; and d) payments and reimbursements which MDC MRI receives from all sources. Section 627.736(5)(a)(1) provides that, to determine the reasonableness of a medical charge, “consideration may be given to [1] evidence of usual and customary charges and payments accepted by the provider involved in the dispute, and [2] reimbursement levels in the community and [3] various federal and state medical fee schedules applicable to automobile and other insurance coverages, and [4] other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.” § 627.736(5)(a)(1), Fla. Stat. (2009).

Section 627.736(5)(a)(1) does not state that its methodology must be strictly followed. It lists factors that “may” be considered in determining whether a charge is reasonable. It does not mandate that any particular factor be considered, and it allows for “other information relevant to the reasonableness of the reimbursement for the service . . . ” to be considered. Nevertheless, Dr. Dauer’s methodology is very similar to the methodology set forth in the statute, although there are some differences. In regard to the first statutory factor, Dr. Dauer considers payments and reimbursements actually received by MDC MRI from all sources, rather than “charges and payments” as written in the statute. He explains that a provider can charge any amount for any service, but if a provider’s charges are not in line with what they regularly accept, then they cannot be objectively considered usual and customary. So, he considers what MDC MRI actually accepts rather than what it charges. In regard to the second statutory factor, Dr. Dauer states that he considered reimbursement levels and charges in the community, including his own reimbursements in the community. In regard to the third and fourth statutory factors, he states that he also considered reimbursement rates for worker’s compensation, Medicare, HMO and PPO, and other third party insurance carriers. As discussed in more detail below, Medicare fee schedules fall into the category of federal and state medical fee schedules. HMO, PPO, and third party insurance carrier rates are “other information relevant to the reasonableness” of the charges.

Hewing so closely to the statutory methodology, it cannot reasonably be said that Dr. Dauer did not use reliable principles and methods in making his determination.

Facts and Data

Under the Daubert standard, for Dr. Dauer’s affidavit to be admissible, it must also be based upon sufficient facts or data. Based on his knowledge, skill, and experience, including knowledge gained from his experience conducting peer reviews, his knowledge about the 45 contracts that his company has with insurance companies, his discussions with peers and colleagues, and his time serving on the governing board of Florida Medical Center Hospital, Dr. Dauer is “familiar with the range and rate of charges for radiological services provided in the area to patients by credentialed and experienced diagnostic centers and hospitals,” and his experience leads him to reach the factual conclusion that “charges between 70% of the Medicare Fee Schedule and up to 200% of the Medicare Fee Schedule . . . reflect a reasonable range of charges for the professional fee interpretation for the x-rays and the global fee for the cervical MRI scan at issue in this case in 2011 in Miami-Dade County.” He states that based on his 45 insurance contracts, the majority of which are with the same companies that contract with MDC MRI, reimbursement rates by insurance providers for radiology services range from 55% to 80% of the Medicare fee schedule. His average rate for radiology services is about 70% of the Medicare fee schedule. He explains that “Medicare Fee Schedule rates are determined by, among other things, collected data which reflects changes in medical practice and relative value of services along with policies affecting the calculation of payment rates.” The concrete data set forth in the affidavit includes details of what he charges for the CPT codes at issue. Other data attached to Dr. Dauer’s affidavit includes a list of his 45 contracts with insurance providers, examples of copies of some of his contracts, and the deposition of the Provider’s operations manager, as well as the medical records for the medical care provided to the Insured in this case, which include the HCFA billing forms and the written reports of the treating physician. Dr. Dauer reviewed this data in formulating his opinion. Dr. Dauer notes in his affidavit that the deposition of the Provider’s operations director indicates that it accepts payments from Medicare, HMOs, and PPOs. The Provider is reimbursed at 140% of Medicare for HMO/PPO carriers, some reimbursement is at 110% or 100% of Medicare, a quarter of the Provider’s business is non-PIP cases, and it accepts all PPOs.

Based on the above, it is clear that Dr. Dauer’s affidavit is based upon sufficient facts and data.

Application of the Principles and Methods to the Facts of the Case.

Finally, under Daubert, for Dr. Dauer’s affidavit to be admissible, it has to apply his principles and methods reliably to the facts of the case. Based on his affidavit, Dr. Dauer reviewed the treatment provided to the Insured, reviewed the amount charged by the Provider, and compared the amount charged to what, in his expert opinion, he considers to be a reasonable range based on his evaluation of facts and data discussed above, in light of the factors listed in paragraph 9 of his affidavit. Such a comparison is a reliable application of his principles to the facts of the case.

Daubert Conclusion

As noted above, when a trial court excludes expert testimony which complies with the requirements for admission, that is legal error, and not within the trial court’s discretion. See Meyer, 731 So. 2d at 123. Here, based on Dr. Dauer’s affidavit, it cannot reasonably be doubted that (1) Dr. Dauer is qualified as an expert on the reasonableness of charges for diagnostic MRI and x-ray services, based on his knowledge, skill, experience, training, and education; (2) Dr. Dauer used reliable principles and methods in making his determination in this case; (3) Dr. Dauer’s affidavit is based upon sufficient facts and data; and (4) Dr. Dauer applied the described principles and methods reliably to the facts of the case.

Accordingly, the trial court legally erred, and abused its discretion, by finding that Dr. Dauer’s affidavit is insufficient under Daubert.Medicare

The trial court’s decision regarding the Medicare component of Dr. Dauer’s methodology is worthy of additional discussion. The trial court determined that Medicare reimbursement rates are “not relevant to the issue of reasonableness of charges.” The trial court’s holding that Medicare reimbursements are not relevant “is expressly contradicted by the PIP statute.” Rodriguez, Case No. 16-453 AP at 7 (emphasis in original). As stated in United Automobile Insurance Co. v. Miami Dade County MRI a/a/o Barrios, 27 Fla. L. Weekly Supp. 7a (Fla. 11th Jud. Cir. Ct. Mar. 5, 2019):

Section 627.736(5)(a)(1) states that an Insurer may consider any factor in the provided list. One of the factors in the list is “various federal and state medical fee schedules applicable to automobile and other insurance coverages.” Black’s Law Dictionary defines ‘applicable,’ in part, as ‘[c]apable of being applied . . . .’ Black’s Law Dictionary (10th ed. 2010) at 120. Since the Medicare Fee schedule has been capable of being applied to determine reasonableness since 2008, . . . the Medicare fee schedule is applicable to PIP coverage. As such, the Medicare fee schedule is one of the factors that may be considered when making a reasonableness determination under section 627.736(5)(a)(1).

Thus, the trial court’s rejection of Dr. Dauer’s affidavit based on its determination that Medicare rates are not applicable was an application of an erroneous legal principle, which is an additional basis for reversing the summary judgment below. See McBean, 688 So. 2d at 386.Conclusion

Although the trial court was correct to apply the Daubert standard to the instant case, it applied it incorrectly and abused its discretion by determining that Dr. Dauer’s affidavit was insufficient under Daubert. Furthermore, Dr. Dauer’s affidavit complies with Rule 1.510(e), and it is not conclusory. Dr. Dauer’s affidavit establishes the existence of a genuine issue of material fact concerning the reasonableness of the Provider’s charges in the instant case. Therefore, summary judgment should not have been granted. See Ortega, 257 So. 3d at 1173.

Accordingly, the summary judgment on appeal is hereby REVERSED, and this cause is REMANDED to the trial court for proceedings consistent with this opinion. (FIGAROLA and CYNAMON, JJ., concur.)

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¹Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).

²Frye v. United States, 293 F. 1013, 1014 (D.C. Cir. 1923).