28 Fla. L. Weekly Supp. 142a

Online Reference: FLWSUPP 2802COLE

Insurance — Personal injury protection — Notice of loss — Claim form that contains correct name of medical provider but omits provider’s professional license number is substantially complete and accurate and provided insurer notice of covered loss — No merit to argument that change in PIP statute from stating that providers “shall” include professional license number to stating that providers “must” provide professional license number changes standard for notice of loss from substantial compliance to strict liability

HYDE PARK MEDICAL CENTER a/a/o Kimberly Coleman (“HYDE PARK”), Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (“STATE FARM”), Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 16-2019-SC-012313-MA, Division L. March 30, 2020. Michelle Kalil, Judge. Counsel: Adam Saben, Shuster & Saben, LLC, Jacksonville, for Plaintiff. James C. Rinaman III, Dutton Law Group, Jacksonville, for Defendant.

ORDER DENYING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT

THIS MATTER comes before this Court for hearing on March 5, 2020 on Defendant’s Motion for Summary Judgment. This Court, having reviewed the Court file and having heard argument of counsel and being otherwise advised in the premises DENIES the Defendant’s Motion and finds as follows:

The facts are not in dispute. Plaintiff, HYDE PARK, treated assignor, Kimberly Coleman, for injuries sustained in a motor vehicle accident on June 26, 2016. Plaintiff submitted its bills to Defendant, STATE FARM, for payment and all bills were paid, including the one date of service at issue in the motion, July 6, 2016. State Farm now seeks recoupment for payment issued for said date because Hyde Park failed to place the treating physician’s license number in Box 31 of the submitted CMS-1500 form, arguing that such omission fails to place the insurer on written notice of a covered loss, pursuant to Florida Statute 627.736(5)(d)(2016).

Florida courts have now addressed this exact issue, at least, three times, providing this Court with guidance on the proper standard for determining whether an insurance company has been placed on written notice of a covered loss, pursuant to section 627.736(5)(d), Florida Statutes (2016). In United Automobile Ins. Co. v. Professional Medical Group, Inc., 26 So.3d 21 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D2500a](“Professional Medical”), the insurer argued that it was not placed on written notice of a covered loss because, inter alia, the medical provider did not place the physician’s license number in Box 31 of the CMS-1500 forms. The relevant section of the PIP statute states:

For purposes of paragraph (4)(b), an insurer shall not be considered to have been furnished with notice of the amount of covered loss or medical bills due unless the statements or bills comply with this paragraph, and unless the statements or bills are properly completed in their entirety as to all material provisions, with all relevant information being provided therein. Fla.Stat. 627.736(5)(d)(2009).

The Third District focused on the words “properly completed”, referencing the pip statute’s definition of same in section 627.732(13), Florida Statutes (2004):

“Properly completed” means providing truthful, substantially complete, and substantially accurate responses as to all material elements to each applicable request for information or statement by a means that may lawfully be provided and that complies with this section, or as agreed by the parties. Id. at 24. (emphasis in original).

The Third District concluded that “based on the statute’s plain language, a bill or statement need only be ‘substantially complete’ and ‘substantially accurate’ as to relevant information and material provisions in order to provide notice to an insurer.” Id. The Court found that the bills submitted to United Auto were “substantially complete” as to all relevant and material information as required by section 627.736(5)(d). Important to the Court’s decision were the additional facts that, at no time did United Auto object to the missing physician’s license number. In the case at bar, State Farm never took issue with the missing number in Box 31. Therefore, State Farm cannot argue that the missing number was a material provision since it in no way prevented the Defendant in its ability to adjust the claim.

In USAA Cas. Ins. Co. v. Pembroke Pines MRI, Inc., 31 So.3d 234 (Fla 4th DCA 2010) [35 Fla. L. Weekly D613b] (“Pembroke Pines MRI”), USAA argued that it was not placed on written notice of a covered loss because the MRI center did not place a professional license number in Box 31 of its CMS-1500 form. The Fourth DCA affirmed the trial court in finding that Pembroke Pines MRI substantially complied with section 627.736(5)(d) because it “provided substantially accurate responses to all relevant information and material elements.” Id. at 238.

In Geico General Ins. Co. v. Tarpon Total Health Care, 86 So.3d 585 (Fla. 2nd DCA 2012) [37 Fla. L. Weekly D1027a] (“Tarpon Total”), the Second DCA adopted the reasoning from the above two cases in finding that the medical provider’s failure to include the professional license number in Box 31 was not fatal and that an insurer is placed on written notice of a covered loss by a substantially completed CMS-1500 claim form. Therefore, three Florida District courts concluded that the proper standard to apply is “substantial compliance” in determining whether a submitted CMS-1500 form places an insurer on written notice of a covered loss. More specifically, all three concluded that the failure to include a professional license number in Box 31 is not fatal to an otherwise properly submitted claim form. Following the guidance of the discussed, binding case law, this Court concludes that the claim form submitted by Plaintiff, HYDE PARK, for date of service July 6, 2016 substantially complied with section 627.736(5)(d) and State Farm was placed on proper notice of a covered loss for said date.

State Farm argues that Professional Medical, Pembroke Pines MRI and Tarpon Total do not apply to the analysis of this case because all three cases involved a version of section 627.736(5)(d) that predate 2012. State Farm notes that, in 2012, the legislature amended Florida Statute 627.736(5)(d) to state that “All providers, other than hospitals, must include on the applicable claim form the professional license number of the provider in the line or space provided for ‘Signature of Physician or Supplier, Including Degree or Credentials.’ Prior to 2012, this provision stated that providers “shall” include the professional license number.” State Farm argues that changing the word “shall” to “must” changes the standard from “substantial compliance” to “strict liability”, wherein the mere omission of the license number in Box 31 constitutes failure to provide the insurer of written notice of a covered loss. This Court rejects the Defendant’s argument for the following reasons. One, none of the three opinions from the District Courts of Appeal (Professional Medical, Pembroke Pines MRI or Tarpon Total) focus on the word “shall” in their analysis. All three focus on the application of the definition of “properly completed” from section 627.732(13); a definition that remains the same before and after 2012. “Properly completed” is found to mean “substantially complete” and “substantially accurate”, which aligns with a standard of substantial compliance. Therefore, to focus on the distinction between “shall” and “must” (words that are close in meaning anyway) is to divert from the analysis of three appellate decisions on the same issue as the before this Court. Two, although the three noted opinions analyze the pre-2012 version of the stature, sister courts faced with the same or similar legal issue after 2012 applied these same Opinions in support of the theory of substantial compliance. In Spinal Health & Rehab of Punta Gorda, Inc. v. Star Casualty Ins. Co., 25 Fla. L. Weekly Supp. 120a (Broward Cty. Ct., February 12, 2017), Judge Fry relied on Pembroke Pines MRI to discredit the opinions of the defense medical expert as to Box 31, calling them “contrary to established law”. In North Broward Health & Rehab, Inc. v. State Farm Fire & Cas. Company, 21 Fla. L. Weekly Supp. 838b (Broward Cty. Ct., March 25, 2014) (“North Broward Health”), Judge Levy relies on Professional Medical to discount attacks on alleged errors in Box 31 from the insurance company, finding that the “Defendant’s interpretation…does not comport with substantial compliance precedent including other examinations of Box 31 defects.” (emphasis added), also see, Healing Hands Pain Relief Center, Inc. v. Star Casualty Ins. Co., 20 Fla. L. Weekly Supp. 182a (Polk Cty. Ct., December 7, 2012)(applying the “substantial compliance” standard to alleged defects in the CMS-1500 form, relying on Professional Medical). Therefore, the analysis of Professional Medical, Pembroke Pines MRI and Tarpon Total with respect to the “substantial compliance” standard applies after 2012. Three, written notice of a covered loss only applies to the proper completion of “material provisions” of the CMS-1500 form. In this case, State Farm paid the submitted claim without the need to have the physician’s license number in Box 31. The form contained the physician’s name and all other relevant information needed to adjust the claim. An adjuster can quickly look up the license number of any physician on the Florida Department of Regulation website, if needed. Therefore, it is hard for this Court to accept that the omission of the license number from Box 31 is a “material” provision that prevented State Farm from being able to adjust the claim at issue. Four, while State Farm argues that the change in terms from “shall” to “must” shows a legislative intent to denote a mandatory provision regarding the license number in Box 31, it is difficult to reconcile the suggested intent with the established legislative intent of the no-fault statute to provide “swift and virtually automatic” payment of medical claims. See, North Broward Health, citing, Gov’t Employees Ins. Co. v. Gonzalez, 512 So.2d 269 (Fla. 3rd DCA 1987). Such a strict liability standard as suggested by State Farm would result in the “wholesale denials of otherwise valid bills for services that were rendered.” See North Broward Health at 3. Furthermore, if the intent of the legislature were truly to replace the substantial compliance standard with a strict liability standard, it is difficult to understand how that would be achieved by replacing “shall” with “must”. The two terms, are, essentially, synonyms. Accepting State Farm’s argument, as true, it would be reasonable to assume that the legislature would replace “shall” with some term other than “must” to differentiate the stark change in the notice standard suggested by State Farm.¹

Therefore, the Defendant’s Motion for Partial Summary Judgment is DENIED.

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¹Plaintiff also argued that State Farm waived its ability to challenge Box 31 based on the insurer’s failure to raise the issue in its Explanation of Benefits or in its response to Plaintiff’s pre-suit Demand Letter. Based on the Court’s finding of substantial compliance, the Court need not reach this legal issue.