28 Fla. L. Weekly Supp. 324b

Online Reference: FLWSUPP 2804KILG

Insurance — Med pay — Coverage — Exhaustion of policy limits — Insurer’s total of $3500 payments did not exhaust benefits under policy providing $1000 med pay coverage and $2500 PIP coverage — Med pay and PIP are separate and distinct coverages and, whether by mistake or otherwise, insurer’s explanations of benefits allocated only $41.60 of payments to med pay coverage — Corrected EOB issued after receipt of demand letter is not sufficient to “reallocate” payments to med pay coverage

PASCO-PINELLAS HILLSBOROUGH COMMUNITY HEALTH SYSTEM d/b/a FLORIDA HOSPITAL WESLEY CHAPEL, as assignee of Bryant Kilgore, Plaintiff, v. NATIONWIDE PROPERTY & CASUALTY INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2018-SC-016920-O. May 14, 2020. Gisela T. Laurent, Judge. Counsel: K. Douglas Walker, Bradford Cederberg, P.A., Orlando, for Plaintiff. Nancy Saint-Pierre, Law Office of David S. Lefton, Plantation, for Defendant.

ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING MEDICAL PAYMENTS COVERAGE

THIS MATTER having come before this Honorable Court on Plaintiff’s Motion for Partial Summary Judgment (certificate of service date August, 29, 2019) regarding the issue of Medical Payments Coverage, and Defendant’s Competing Motion for Partial Summary Judgment (certificate of service date January 8, 2020), and this Honorable Court having heard arguments of counsel, considered the evidence presented, reviewed all relevant statutes and caselaw provided, and being otherwise fully advised in the premises, the Court makes the following findings:

The subject policy of insurance is an Alabama policy, which provided $1,000 in Medical Payments (“MedPay”) coverage. (Torres Aff. ¶6.). The policy was thereafter conformed to provided Florida Personal Injury Protection (“PIP”) Coverage up to $10,000.00. Id. Florida PIP and the Medical Payments coverages are separate and distinct coverages. (Torres Dep., 14:23-15:4, Feb. 27, 2019).

On or about August 1, 2017, sixteen year-old Bryant Kilgore was injured when he was struck by a car while riding his bike. Bryant Kilgore was taken to the Emergency Room at Florida Hospital Wesley Chapel (Plaintiff), where he received emergency services and care related to his injures. There is no dispute Bryant Kilgore was covered by the Alabama Policy of Insurance described above.

Two providers — (1) Sheridan Radiology Services of West Florida and (2) Plaintiff — submitted bills to Defendant seeking reimbursement for the emergency services and care provided to Bryant Kilgore in the emergency room on or about August 1, 2017. Sheridan Radiology submitted a bill totaling $208.00; and Plaintiff’s bill totaled $4,824.32. There is no dispute each of these bills were covered by the subject policy of insurance.

Defendant processed and paid Sheridan Radiology’s $208.00 bill as follows: It allowed the charges in full, and paid Sheridan Radiology $208.00. Of the $208.00 paid to Sheridan Radiology, $166.40 was allocated to Florida PIP, and $41.60 was allocated to the $1,000 in MedPay coverage. (Torres Dep. 21:17-21).

The initial Explanation of Review regarding Plaintiff’s bill was sent by Defendant on or about November 20, 2017. According to this Explanation of Review, Plaintiff’s $4,824.32 bill was allowed at $4,115.00, which was to be paid to Plaintiff. Of the $4,115.00 to be paid to Plaintiff, $3,292.00 was allocated as a PIP payment, and $823.00 was allocated as a payment under the policy’s MedPay coverage. Defendant sent, without further explanation, a check to Plaintiff for only $3,292.00 — the amount allocated to PIP. The remaining $823.00 indicated as being allocated to Medical Payments Coverage was never paid.

Defendant later testified via its Corporate Representative that the November Explanation of Review was a mistake. (Torres Dep. 26:20-21). The November EOR was approved by Defendant and sent to Plaintiff as the “explanation” of how Defendant would be reimbursing Plaintiff for its submitted charges. A corrected EOR was not sent until March 6,2018 after Defendant received a Demand Letter from one of the providers. (Torres Dep. 28:18-29:4). When asked why a corrected EOR was not sent in November when she noticed the mistake, Defendant’s corporate representative testified, “I don’t know.” (Torres Dep. 27:17).

Plaintiff argues in its Motion for Partial Summary Judgment that, according to Defendant’s own documents indicating specific allocations, Defendant paid only $41.60 under the Policy’s $1,000 in Medical Payments Coverage. Defendant argues Bryant Kilgore is entitled to only $2,500 of the $10,000 in Florida PIP coverage because there is no affirmative determination Bryant Kilgore suffered from an “emergency medical condition,” and that the total payments issued for this claim total $3,500 — which this Court should determine as satisfying Defendant’s contractual obligation to pay $2,500 in FL PIP, and $1,000 in Medical Payments under the policy of insurance.

The Court is bound by the plain language of the insurance contract. Applying the plain language of the insurance policy to the evidence before this Court, the Court agrees with Plaintiff. According to Defendant’s itemized specifications of how each bill was paid, Defendant clearly paid only $41.60 allocated to the $1,000 in available Medical Payments coverage.

Florida PIP and the contractual Medical Payments Coverage are very separate and distinct coverages, which are paid separately. Florida PIP is paid according to section 627.736 of the Florida Statutes; and according to page 10 of 27 of the policy attached to the Affidavit of Nicole Torres, medical payments coverage pays 100% of “usual, customary, and reasonable charges.”

The Policy of insurance clearly provides for $1,000 in Medical Payments coverage, and up to $10,000 in Florida PIP. Contrary to Defendant’s argument that Defendant exhausted all available benefits at $3,500, the policy does not provide for simply “$3,500 in benefits.” Simply paying $3,500 does not adequately exhaust one coverage or the other. The Court cannot rewrite this contract entered into by Defendant and its insured. Accordingly, the Court finds, as a matter of law, the contract of insurance provides $1,000 in medical payments coverage, and up to $10,000 in Florida PIP.¹

The question then becomes whether Defendant exhausted the $1,000 in Medical Payments Coverage available under the policy of insurance. This Court determines, based on Defendant’s own allocations, there is no genuine issue of material fact that Defendant has not exhausted the $1,000 in Medical Payments coverage.

On or around October 16, 2017, Defendant issued an “Explanation of Review” (or “EOR”) detailing how the bill from Sheridan Radiology was processed and paid. That EOR indicated an “EOR Check Amount” of $208.00. Of the $208.00 to be paid to Sheridan Radiology, $166.40 was an “Allocated PIP Payment,” and $41.60 was an “Allocated MedPay/Medical Expense Payment.’ There is no dispute Sheridan Radiology received $208.00 as indicated in the EOR.

On or around November 20, 2017, Defendant issued an EOR detailing how Plaintiff’s bill would be processed and paid. That EOR indicated an “EOR Check Amount” of $4,115.00. Of the $4,115.00 to be paid to Plaintiff, $3,292.00 was an “Allocated PIP Payment,” and $823.00 was an “Allocated MedPay/Medical Expense Payment.’ There is no dispute that Plaintiff received a check for $3,292.00 — or the amount allocated by Defendant as a “PIP Payment.” The $823.00 “Allocated MedPay/Medical Expense Payment” was never tendered.

Importantly, section 627.736(4)(b)(2) states:

“If an insurer pays only a portion of a claim or rejects a claim, the insurer shall provide at the time of the partial payment or rejection an itemized specification of each item that the insurer had reduced, omitted, or declined to pay . . . .”

§627.736(4)(b)(2), Fla. Stat. (2018) (emphasis added). The statutory mandate that an insurer provide an “itemized specification” is commonly achieved via “Explanations of Review” or “Explanation of Benefits” like the ones generated, approved, and sent by Defendant in this instance. Defendant’s corporate representative testified she noticed a “mistake” on the November 20, 2017 EOR sent to Plaintiff, but she did not send a corrected EOR at that time. (Torres Dep., 27:14-15). When asked why a corrected EOR was not sent at that time, Defendant’s corporate representative testified, “I don’t know.” (Torres Dep., 14-17).

In addition to the plain language of §627.736(4)(b)(2) stating “the insurer shall provide at the time of the partial payment or rejection an itemized specification of each item . . .”, courts have addressed this issue as it relates to Explanations of Review. See, e.g., Fidel S. Goldson, D.C., P.A. a/a/o John Gray v. United Auto. Ins. Co., 12 Fla. L. Weekly Supp. 161b (Broward Cnty. Nov. 14, 2004). In Goldson, the Court explained:

Florida Statute §627.736(4)(b)(2) provides: “When an insurer pays only a portion of the claim or rejects a claim, the insurer shall provide at the time of the partial payment or rejection an itemized specification of each item that the insurer had reduced, omitted, or declined to pay . . . .this is generally informally referred to as an “explanation of benefits.” The statute does not further defined what is meant by an “itemized specification.

Under Florida Law, in the absence of a statutory definition, a word used in a statute is given its standard dictionary definition. The word “specification” is defined as “a detailed precise presentation of something,” and “the act or process of specifying.” The word “specify” is defined as “to name or state explicitly in detail.” Webster’s New Collegiate Dictionary 1108 (1980).

In the instant case, the insurer has denied the claim in total. The question then for the Court is whether the letters provided by the insurer [complied with the statute]. . . . Rather than “explicitly stating” the reason for the denial, the insured’s response to the claim does nothing more than confuse the matter even further. As a result, the Court finds that there is no disputed issue of material fact on this issue. As a matter of law, the Defendant’s response does not come close to meeting the requirements of Fla. Stat. §627.736(4)(b).

The plaintiff is correct that the provisions of the Florida Statutes governing insurance become a part of the insurance contract between the parties. Grant v. State Farm Fire & Casualty Co., 638 So. 2d 936, 938) (Fla. 1994); Mia A. Higginbotham, D.C., P.A. v. United Automobile Ins. Co., 11 Fla. L. Weekly Supp. 748e (Broward Cty. Ct. 2004). As a result, when the Defendant failed to comply with the mandatory provisions of Fla. Stat. §627.736(4)(b), it breached its insurance contract with the insured.

Goldson, 12 Fla. L. Weekly Supp. 161b.

Defendant now argues a corrected EOR — sent in March 2018 after receiving a demand letter — is sufficient to “reallocate” the payments made to Plaintiff. Defendant has provided no authority to support this type of “reallocation,” and the Court finds the March 2018 EOR does not comply with §627.736(4)(b)(2), which mandates insurers provide an “itemized specification” “at the time of the partial payment.” (emphasis added).

Defendant also argues, relying on United Auto. Ins. Co. v. A 1st Choice Healthcare Sys., 21 So. 3d 124 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D2268a], that it is not required to send an EOR within any timeframe, an accurate EOR, or any EOR at all. Notwithstanding the fact the plain language of the statute says an insurer “shall” provided an “itemized specification” “at the time of the partial payment,” United Auto is clearly distinguishable. In that case, the insurer did not deny or partially pay a claim — it did nothing. The Third DCA reiterated, however, that the mandates of §627.736(4)(b)(2) are in fact triggered anytime an insurer denies or partially pays a claim. Id. at 126-27. There is no dispute in the case before this Court that Nationwide partially paid Plaintiff’s claim. Nationwide was therefore required by law to provide an accurate itemized specification at the time of the partial payment. See id; §627.736(4)(b)(2), Fla. Stat. (2018).

Accordingly, based on the facts before this Court, whether by mistake or otherwise, Defendant allocated only $41.60 to the $1,000 in Medical Payments Coverage available under the policy. Despite Defendant’s subsequent allegations that the $3,500 paid for this claim consisted of $1,000 in medical payments and $2,500 in Florida PIP, these conclusory allegations are contradicted by Defendant’s own documents showing the specific, itemized allocations for each payment made. The Court, therefore, finds no genuine issue of material fact exists — Defendant paid only $41.60 allocated to the $1,000 in Medical Payments Coverage. See K.E.L. Title Ins. Agency v. CIT Tech. Fin. Servs., Inc., 58 So. 3d 369 (Fla. 5th DCA 2011) [36 Fla. L. Weekly D742a] (holding conclusory allegations that are contradicted by explicit portions of the record are not sufficient to create a genuine issue of material fact).

As a matter of law, therefore, there remains $958.40 in Medical Payments Coverage which can and shall be used to pay claims according to the terms of the policy. Defendant testified it received bills from only Sheridan Radiology and Plaintiff for the emergency treatment rendered to Bryant Kilgore on or about August 1, 2017. Because Sheridan Radiology’s $208 bill was paid in full, the remaining Medical Payments coverage should be used to reimburse Plaintiff according to the terms of the policy as it relates to Medical Payments Coverage.

ORDERED AND ADJUDGED that:

1. Plaintiff’s Motion for Partial Summary Judgment is GRANTED.

2. Defendant’s competing Motion for Partial Summary Judgment is DENIED.

3. There remains $958.40 in Medical Payments coverage available for payment of claims related to Bryant Kilgore’s injuries sustained on or about August 1, 2017.

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¹The issue of whether Defendant properly limited the $10,000 in available PIP to $2,500 was not before the Court. The Court, therefore, does not address that issue in this order.