5 Fla. L. Weekly Supp. 134a

Insurance — Personal injury protection — Medical provider’s action against insurer which refused to pay for medical diagnostic testing ordered by insured’s treating physician on ground that testing was unnecessary, unreasonable, and not related to subject automobile accident — Jury instructions — No error in instructing jury that it had to determine whether diagnostic testing performed by plaintiff was medically necessary and related to accident and that plaintiff had burden of proof by greater weight of the evidence — Evidence — Expert — No error in admitting testimony of expert who completed paper review of insured’s medical treatment file but did not perform physical examination — No error in admitting testimony of physician who performed physical exam six months after subject testing took place — Whether or not doctors’ testimony comported with requirements of statute relating to physical examination whenever mental or physical condition of insured is material to claim is not relevant where issue is admissibility of testimony at a trial in which medical necessity and relation of treatment to subject accident are at issue — Any error that may have resulted from admitting testimony of expert who performed paper review would be harmless since examining physician concurred in conclusion that diagnostic testing ordered by treating physician was neither medically necessary nor reasonable — No abuse of discretion in refusing to permit insurer to cross-examine insured’s treating physician concerning financial motivations and potential bias — Court could have reasonably found that prejudicial effect outweighed any probative value in that issue of medical necessity could have been obscured if physician’s financial motives in ordering tests were addressed

DIAGNOSTIC NEUROLOGY GROUP, INC., Plaintiff/Appellant, v. ALLSTATE INSURANCE CO., Defendant/Appellee/Cross-Appellant. 9th Judicial Circuit in and for Orange County. Case No. CVA196-73. Counsel: Charles Steinberg, P.A., Charles Steinberg, on behalf of Appellant/Cross-Appellee. Rissman, Weisberg, Barrett, Hurt, Donahue & McLain, P.A., Hans Kennon, Jennings L. Hurt III, on behalf of Appellee/Cross-Appellant.

(Before Conrad, J., Rodriguez, J., and Perry, J.)

ORDER AND OPINION

The Court, having reviewed the record on appeal and briefs of counsel, dispenses with oral argument, pursuant to Florida Rule of Appellate Procedure 9.320. Plaintiff/Appellant/Cross-Appellee, Diagnostic Neurology Group, Inc. (“Diagnostic”), appeals a final judgment in favor of Defendant/Appellee/Cross-Appellant, Allstate Insurance Company “Allstate”). Allstate cross-appeals a ruling of the trial court. This Court has jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c)(1).

Diagnostic filed a breach of contract claim for personal injury protection (“PIP”) benefits against Allstate on behalf of Karen Barker (“Barker”), Allstate’s insured. Barker suffered injuries in an automobile accident which occurred on March 12, 1995. At the time of the accident, Barker’s automobile was insured by a policy provided by Allstate, which included PIP benefits in accordance with section 627.736, Florida Statutes. Diagnostic alleged that Allstate’s failure to pay for medical diagnostic testing ordered by Barker’s treating physician, Dr. Timko, and performed by Diagnostic, resulted in a breach of Barker’s policy.

Diagnostic alleged that the neurological care and testing provided to Barker were reasonable and necessary, as were the charges, and were related to the subject motor vehicle accident. Allstate alleged, as an affirmative defense, that the medical diagnostic treatment and testing received by Barker was unnecessary, not reasonable and not related to the subject automobile accident. The matter was tried before a jury which returned a verdict in favor of Allstate. The jury answered “no” to the following question: “Did Plaintiff, Diagnostic Neurology Group, Inc., perform any diagnostic testing on Allstate’s insured, Karen Barker, which was medically necessary as a result of the March 12, 1995, automobile accident?”

Diagnostic argues that the trial court erred in instructing the jury that Diagnostic had to show, by the greater weight of the evidence, that the diagnostic testing performed on Barker was reasonable and medically necessary. Diagnostic also argues that the trial court erred in permitting the expert testimony of Dr. Shooker and Dr. Bennett, Allstate’s experts, at trial.

Allstate cross-appeals in this matter, raising one issue of error at the trial below. Allstate argues that the trial court erred when it refused to allow Allstate to cross-examine Dr. Timko as to his financial relationship with Diagnostic because his deposition testimony reflected that he earned a profit of $900.00 on the $1,000.00 he received for prescribing the neurodiagnostic test performed by Diagnostic.

DIAGNOSTIC’S APPEAL

Diagnostic argues that the trial court erroneously instructed the jury with regard to Diagnostic’s burden of proof in this matter. The trial court instructed the jury that it had to determine whether Diagnostic performed diagnostic testing for Barker which was medically necessary and related to the automobile accident. The trial court further instructed the jury that Diagnostic had the burden of proof by the greater weight of the evidence. Diagnostic contends that, because Allstate raised these issues as affirmative defenses to this action, it was Allstate’s burden to prove that the testing was not necessary, not related and not reasonable, by the greater weight of the evidence. Diagnostic argues that its only burden of proof was to show that the testing was covered under Barker’s automobile insurance policy’s PIP provisions, as issued by Allstate, and if so, what amount Allstate should have paid pursuant to the terms and conditions of the policy.

“Trial courts are accorded broad discretion in formulating appropriate jury instructions and appellate courts do not find reversible error unless the error complained of resulted in a miscarriage of justice, or where the instruction or failure to give a requested instruction was reasonably calculated to confuse or mislead the jury.” Reyka v. Halifax Hospital Dist., 657 So. 2d 967, 968-69 (Fla. 5th DCA 1995). “The party presenting a jury instruction point as error on appeal must show the requested instruction accurately states the applicable law, that the facts in the case support giving the instruction, and that the instruction was necessary in order to allow the jury to properly resolve all issues in the case.” Id. at 968.

Section 627.736, Florida Statutes states in pertinent part:

(1) Required benefits. — Every insurance policy complying with the security requirements of s. 627.733 shall provide personal injury protection to the named insured … to a limit of $10,000 for loss sustained by any such person as a result of bodily injury, sickness, disease, or death arising out of the ownership, maintenance, or use of a motor vehicle as follows: (a) Medical benefits. — Eighty percent of all reasonable expenses for necessary medical, surgical, X-ray, dental and rehabilitative services, including prosthetic devices, and necessary ambulance, hospital, and nursing services. Such benefits shall also include necessary remedial treatment and services recognized and permitted under the laws of the state for an injured person who relies upon spiritual means through prayer alone for healing, in accordance with his religious beliefs.

(4)(b) Personal injury protection insurance benefits paid pursuant to this section shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same…. However, any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment, notwithstanding that written notice has been furnished to the insurer. (Emphasis added).

Diagnostic cites Crooks v. State Farm Mutual Automobile Ins. Co., 659 So. 2d 1266 (Fla. 3d DCA 1995) for the proposition that it is an insurer’s responsibility to prove that a medical expense submitted pursuant to section 627.736, Florida Statutes is not reasonable, necessary or related to the subject accident. In Crooks, the plaintiff sued his insurer when his insurer refused to pay a submitted medical claim because the claim was submitted on the wrong claim form. The Third District Court of Appeal stated that “[t]here is no question that these bills qualified for `no-fault’ insurance benefits under the State Farm policy…. State Farm’s sole reason for not paying these bills within the statutory time period was that the bills were not submitted on a particular in-house claim form.” Id. at 1267. This case is distinguishable from Crooks in that it involves a question of whether the bills qualify for “no-fault” insurance benefits, not in what form such a claim should be made.

Diagnostic also relies on Palma v. State Farm Fire & Casualty Co., 489 So. 2d 147 (Fla. 4th DCA 1986) and Farmer v. Protective Casualty Insurance Company, 530 So. 2d 356 (Fla. 2d DCA 1988) for the proposition that the PIP statute should be construed in favor of the insured. Palma involved the question of whether thermographic testing was “necessary” pursuant to section 627.736, Florida Statutes. The District Court found that the trial court employed a definition that was too restrictive given the intent of the PIP statute. In Palma, the insured contended that “the evidence established that the thermographic examinations performed in her case constituted a necessary medical service, and therefore she was entitled to reimbursement pursuant to section 627.736.” Id. at 148. In Farmer, the District Court found that testing which failed to link an injury to the accident, but was necessary to exclude a cause of the injury, was compensable under the PIP statute. Both cases are distinguishable from the instant case. This case involves the issue of the parties’ respective burdens of proof. The question of whether, in fact, the testing was reasonable or necessary is not at issue in this appeal as Diagnostic has not challenged that finding, but has challenged the basis upon which the jury was instructed to make the finding.

Lastly, Diagnostic cites to Public Health Trust of Dade County, Florida v. Holmes, 646 So. 2d 266 (Fla. 3d DCA 1994) to support its argument that the burden of proving an affirmative defense of medical necessity is on the defendant. In that case, the defendant was a patient who signed a guaranty for payment for services rendered. When the plaintiff sued on the guaranty to recover the balance owed, the defendant alleged that the services were not medically necessary. In this case, Diagnostic has filed a breach of contract action claiming entitlement to payment pursuant to a statute which permits payment of claims which are reasonable, necessary and related. Therefore, this case is distinguishable factually and legally.

By definition, Allstate must cover any medical benefit which is defined in section 627.736(1), Florida Statutes as a required benefit. However, it is not enough for an insured to submit a medical claim to an insurer for PIP coverage. The insured must present a claim that is reasonable, necessary and related, according to the terms of the statute. See, e.g., §627.736(6)(b), Fla. Stat. (requiring sworn statement of charges by medical provider). Thus, if an insurer failed to pay its insured, upon filing suit, the insured would have to prove that the claim is within the definition contained in the statute in order to state a claim for relief. The burden would then shift to the insurer to show some other reason why it should not be responsible for payment of the insured’s claim. Therefore, the trial court’s instruction was appropriate.

Diagnostic next argues that the testimony of Dr. Shooker and Dr. Bennett should have been excluded. Diagnostic claims Dr. Shooker’s testimony should have been excluded because he completed a paper review of the insured’s medical treatment file, but he did not perform a physical exam. Diagnostic claims that Dr. Bennett’s testimony should have been excluded because he performed a physical exam six months after the subject testing took place. Diagnostic argues that in order for Dr. Bennett’s testimony to be admissible, he would have had to examine Barker before the testing took place. Diagnostic relies on the language of section 627.736(7)(a), Florida Statutes, governing withdrawal of insurance benefits, to support its argument.

Allstate argues that Diagnostic is not Barker’s “treating physician” and that the only issue at trial was whether the testing performed was medically necessary, not whether Barker should be denied future treatment. Allstate also argues that Diagnostic’s interpretation of the statute, requiring a physical examination prior to the performance of any testing or treatment of an insured, is untenable.

Section 627.736(7)(a), Florida Statutes states:

(a) Whenever the mental or physical condition of an injured person covered by personal injury protection is material to any claim that has been or may be made for past or future personal injury protection insurance benefits, such person shall, upon the request of an insurer, submit to mental or physical examination by a physician or physicians. . . . An insurer may not withdraw payment of a treating physician without the consent of the injured person covered by the personal injury protection, unless the insurer first obtains a report by a physician licensed under the same chapter as the treating physician whose treatment authorization is sought to be withdrawn, stating that treatment was not reasonable, related or necessary.

Diagnostic argues that legislative history, legislative staff analyses and informational bulletins related to section 627.736, Florida Statutes, support its position that Dr. Shooker’s report and Dr. Bennett’s physical examination were insufficient. With regard to Dr. Bennett’s examination, if a physical examination of the insured may be performed when the insured’s physical condition is material, with regard to a claim for benefits, an insurer should be entitled to rely on such examination to deny claims for payment on past treatment where the other requirements of the statute are met. To do otherwise would limit the ability of the insurer to investigate claims for payment when a party’s medical condition is at issue. As to Diagnostic’s claim that Dr. Shooker’s paper review was insufficient, the statute does not currently, by its plain language, require that a physical examination take place in addition to a paper review.¹

Additionally, whether or not the doctors’ testimony comports with the requirements of section 627.736, Florida Statutes is irrelevant when the issue is the admissibility of such testimony at a trial in which medical necessity and relation to the subject accident are at issue. In DeFerrari v. GEICO, 613 So. 2d 101 (Fla. 3d DCA 1993), the insured refused an independent medical examination by an orthopaedic surgeon, based upon the language of section 627.736(7)(a), Florida Statutes, because she was not being treated by an orthopaedic surgeon and, therefore, the opinion of an orthopaedic surgeon was not relevant. The court in DeFerrari held that the limitation of section 627.736(7)(a), Florida Statutes, requiring an examination by a physician similarly licensed “clearly related only to the type of physician whose report could be used to terminate benefits and placed no limitation on the type of physician an insurer can reasonably choose to perform an IME.” Id. at 103.

The testimony of Drs. Shooker and Bennett was admissible pursuant to Florida Rules of Evidence 90.702 and 90.703. Further, even if the examinations, testimony, and opinions offered were subject to the requirements of section 627.736(7)(a), Florida Statutes, any error that resulted from permitting Dr. Shooker’s testimony in derogation of the statute would be harmless, as Dr. Bennett concurred in Dr. Shooker’s conclusion that the diagnostic testing ordered by Dr. Timko was neither medically necessary nor reasonable.

ALLSTATE’S CROSS-APPEAL

In its cross-appeal, Allstate argues that the trial court erroneously denied it the right to cross-examine Dr. Timko about the profit he received from ordering the subject testing. Florida Rule of Evidence 90.608(2), states that “[a]ny party, including the party calling the witness, may attack the credibility of a witness by … [s]howing that the witness is biased.” Allstate claims it had an inherent right to explore and expose Dr. Timko’s motivation to testify. Diagnostic argues that the probative value of such an examination was outweighed by its prejudicial effect. Fla. R. Evid. 90.403. The trial court held that it would not

allow the evidence for the purpose of showing the doctor’s motivation for ordering the test. Any relevance of that is substantially outweighed by confusion, and misleading. . . . I do feel that it is a legitimate area for . . . argument on the question of credibility of the doctor, a financial incentive to testify the way he does. . . . If the jury believes it is medically necessary, the doctor is going to get paid. That gives the doctor incentive to state from the witness stand that it is medically necessary. Do we need to go over that with the doctor on the stand? I think not, because that evidence is already in the record. We know the doctor has not been paid. We know the amount the doctor will potentially earn, . . . and so that argument can be made. To put on the evidence through the doctor, . . . will be overemphasizing that particular area.

Generally, “if the introduction of the evidence tends in actual operation to produce a confusion in the minds of the jurors in excess of the legitimate probative effect of such evidence — if it tends to obscure rather than illuminate the true issue before the jury — then such evidence should be excluded.” Perper v. Edell, 44 So. 2d 78, 80 (Fla. 1949). The issue of medical necessity could have been obscured if Dr. Timko’s financial motives in ordering the tests were addressed. The trial court could have reasonably found that the prejudicial effect of that evidence outweighed any probative value it might have. Therefore, the trial court did not abuse its discretion in denying Allstate’s request to cross-examine Dr. Timko as to his financial motivations and potential bias.

Accordingly, it is hereby

ORDERED AND ADJUDGED that the Appeal and Cross-Appeal are DENIED and the rulings of the trial court are AFFIRMED.

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¹There is evidence that the Department of Insurance and the legislature intended that the statute be interpreted in that manner and at least one circuit court has agreed. See Williamson v. Fortune Insurance Company, 4 Fla. L. Weekly Supp. 510 (Fla. 17th Cir. Ct. December 12, 1996) (“The legislative intent of Sec. 627.736(7)(a) indicates that the last sentence referring to the physician’s report was placed in the same paragraph and should be read in the context of Section (7)(a) requiring an actual mental or physical examination and should not be taken out of context of (7)(a).”).

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