5 Fla. L. Weekly Supp. 564a
Insurance — Personal injury protection — Arbitration — Assignment of benefits to medical provider — Motion to dismiss and/or compel arbitration arising out of insured’s action against insurer to enforce terms of PIP policy after insurer refused to pay certain amounts to health care provider — Section 627.736(5), which provides that upon accepting assignment of insured’s right to have benefits paid directly to insured, medical providers must resolve claims disputes with insurance company through binding arbitration, requires only assignment of benefits, not all contractual rights — Benefits, in context of statute, clearly refers to payments due insured from insurer pursuant to policy — Claims dispute, as contemplated by statute, refers to situation where insurance company has agreed that treatment given by medical provider is covered under policy, but insurer disputes dollar amount of charges as being unreasonable — If insured executes an assignment of benefits so that medical provider is paid directly for treatment for bodily injury covered by PIP insurance, and insurer disputes reasonableness of amount that medical provider has charged, this would constitute “claims dispute,” and pursuant to section 627.736(5) must be decided by binding arbitration between insurance company and medical provider — Where insurer refuses to pay any of medical expenses incurred, based upon belief that treatment is not covered under policy, insured must be allowed to assert any contractual rights insured may have pursuant to policy — Insurer’s motion to dismiss and/or compel arbitration denied
Richard A. Glover, Plaintiff, v. State Farm Mutual Automobile Insurance Company, Defendant. County Court, 19th Judicial Circuit in and for Indian River County. Case No. 96267CC10. August 12, 1997. David C. Morgan, Judge.
ORDER
THIS CAUSE having come to be heard on the defendant’s Motion to Dismiss and/or Compel Arbitration, and the Court having considered the oral arguments of counsel as well as written memorandums of law, and the Court having made the following findings of fact and conclusions of law;
1. Plaintiff (insured) brought this action against defendant (insurer) pursuant to a policy containing personal injury protection (PIP) coverage.
2. Both parties agree that plaintiff was injured in an automobile accident on November 21, 1994. Plaintiff claims that he incurred medical expenses as a result of the accident, and both parties agree that defendant has refused to pay certain amounts to the health care provider.
3. Plaintiff signed a “PATIENT INFORMATION SHEET” provided by the health care provider that included a section entitled “ASSIGNMENT & RELEASE”. This section contained the following language:
I HERBY (sic) GRANT PERMISSION TO GARY M. WEISS, M.D., P.A. 1051 PORT MALABAR BLVD., SUITE #6, PALM BAY FLORIDA 32905 TO RELEASE ANY PERTINTENT (sic) INFORMATION TO THE ABOVE INSURANCE COMPANY UPON REQUEST, AND I ALSO AUTHORIZE PAYMENT DIRECTLY TO THE ABOVE CLINIC FOR THE SURGICAL AND/OR MEDICAL BENEFITS FOR ITS SERVICES AS DESCRIBED HERIN, (sic) I UNDERSTAND THAT I AM FINANCIALLY RESPONSIBLE FOR THOSE CHARGES NOT PAID BY INSURANCE.
4. Plaintiff claims that this language does not constitute an “unqualified, irrevocable assignment”, of the plaintiff’s PIP benefits, and in any event is not precluded from bringing this action to enforce the terms of the policy. Defendant claims that plaintiff did make an assignment of benefits to the health care provider, and this action is barred by Section 627.736(5), Florida Statutes.
3. The policy provides:
Any claim dispute involving medical benefits under this section of the policy between us and a medical services or supplies provider (hereinafter referred to as health care provider) who has agreed to accept an assignment of personal injury benefits shall be decided by arbitration upon written request of either party.
Section 627.736(5), Florida Statutes, provides:
Any physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge only a reasonable amount for the products, services, and accommodations rendered, and the insurer providing such coverage may pay for such charges directly to such person or institution lawfully rendering such treatment, if the insured receiving such treatment or his guardian has countersigned the invoice, bill, or claim form approved by the Department of Insurance upon which such charges are to be paid for as having actually been rendered, to the best knowledge of the insured or his guardian. In no event, however, may such a charge be in excess of the amount the person or institution customarily charges for like products, services, or accommodations in cases involving no insurance, provided that charges for cephalic thermograms and peripheral thermograms shall not exceed the maximum reimbursement allowance for such procedures as set forth in the applicable fee schedule established pursuant to s. 440.13. Every insurer shall include a provision in its policy for personal injury protection benefits for binding arbitration of any claims dispute involving medical benefits arising between the insurer and any person providing medical services or supplies if that person has agreed to accept assignment of personal injury protection benefits. The provision shall specify that the provisions of chapter 682 relating to arbitration shall apply. The prevailing party shall be entitled to attorneys fees and costs.
4. There are no cases addressing what constitutes an assignment of personal injury protection benefits under Section 627.736(5). The Court must therefore give a reasonable interpretation to the text in light of any available statements of legislature intent.
5. The plaintiff mistakenly interprets the statute to require an assignment of all contractual rights. The plain language of the statute requires only an assignment of benefits. In the context of the statute, benefits clearly refers to payments due the insured from the insurer pursuant to the policy. In State Farm Mut. Auto. Ins. v. Gonnella, 677 So.2d 1355 (Fla. 5th DCA 1996), the Court stated, “The legislative intent is clear. Section 627.736(5) requires arbitration to resolve disputes involving medical benefits” (emphasis added). In other words, since the enactment of Section 627.736(5), all medical providers are on notice that upon accepting assignment of the insured’s right to have benefits paid directly to the insured, they must resolve claims disputes with the insurance company through binding arbitration.
6. However, the central issue in this case involves the term “claims dispute”, as the rule of arbitration does not apply unless there exists a “claims dispute” as contemplated by the statute. There are no cases addressing what constitutes a “claims dispute”. However, it would seem that this term refers to one of two different situations. Either the insurance company has agreed that the treatment given by the medical provider is covered under the policy, but they dispute the dollar amount of the charge, or the insurance company refuses to pay anything, based upon their belief that the treatment is not covered under the policy.
7. Section 627.736(5), clearly addresses the amounts that a medical provider may charge to treat bodily injury covered by personal injury protection insurance. The medical provider may charge only a “reasonable amount” and, “In no event, however, may such a charge be in excess of the amount the person or institution customarily charges for like products, services, or accommodations in cases involving no insurance,” with provisions being made for specialized services. Therefore, the term “claims dispute”, refers to a situation where the insurance company has agreed that the treatment given by the medical provider is covered under the policy, but they dispute the dollar amount of the charges as being unreasonable.
8. The application of common sense also dictates this result. If the insurance company takes the position that the treatment is not covered under the policy, the insured should be able to contest that decision. Yet the defendant would have this conflict decided by arbitration between the medical provider and the insurance company, without input from the insured. If the arbitrator decided for the insurance company, the medical provider could then proceed against the insured for the amount of the charge. However, if the insurance company merely disputes the reasonableness of the charges, the statute requires binding arbitration. If the arbitrator decided for the insurance company, the insured would not be liable for any deficiency after arbitration.1
9. In conclusion, if an insured executes an assignment of benefits so that the medical provider is paid directly for treatment for a bodily injury covered by personal injury protection insurance, and the insurance company disputes the amount that the medical provider has charged, this would constitute a “claims dispute,” and pursuant to Section 627.736(5), Florida Statutes must be decided by binding arbitration between the insurance company and the medical provider. However, if the insurance company refuses to pay anything, based upon their belief that the treatment is not covered under the policy, as is the situation in the case at bar, the insured must be allowed to assert any contractual rights he or she may have pursuant to the policy.
It is therefore;
ORDERED AND ADJUDGED that the defendant’s Motion to Dismiss and/or Motion to Compel Arbitration is hereby DENIED.
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1The language of Section 627.736(5) would seem to make void any clause of an assignment making an insured financially responsible for the difference between the charge and what was paid by the insurance company. In any event, Section 627.736(5) also provides the provider, “may charge only a reasonable amount for the products, services, and accommodations rendered”. When a “reasonable amount” is determined by arbitration, the provider would not be able to relitigate the issue by bringing suit against an insured for a deficiency.
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