6 Fla. L. Weekly Supp. 612a
Insurance — Personal injury protection — Dispute between medical services provider and insurer — Arbitration — Where insurer denied payment for electrodiagnostic procedures performed by assignee after neurologist who reviewed insured’s medical records found that the amount of diagnostic testing was medically unnecessary; assignee filed suit alleging breach of contract and seeking declaration that statute requires an actual physical examination by a physician prior to denial of claimed medical bills; and insurer responded by filing motion to compel arbitration, trial court erred when it denied arbitration and entered final declaratory judgment — Valid written agreement existed requiring application of arbitration code, and arbitration was not waived — Arbitrable issues — Whether diagnostic testing was reasonable and necessary was arbitrable claim — Filing of count for declaratory relief was merely an attempt to avoid arbitration of legitimate claims by raising a coverage issue based upon the lack of a hands-on physical examination prior to denying benefits — Trial court erred as matter of law in finding section 627.736(7)(a) ambiguous and in interpreting the statute to require a physical independent medical examination
ALLSTATE INSURANCE COMPANY, Appellant, vs. NEW DIAGNOSTIC INC., Appellee. 11th Judicial Circuit in and for Miami-Dade County, Appellate Division. Case No. 98-360 AP. Lower Case No. 98-1709 CC 23. Opinion filed June 18, 1999. An Appeal from County Court for Miami-Dade County, Florida, Reginald A. Richardson, Judge. Counsel: Richard A. Sherman and Jonathan A. Berkowitz, for appellant. Harley N. Kane, for appellee.
(Before JEFFREY ROSINEK, ELLEN L. LEESFIELD and LEON M. FIRTEL, JJ.)
(PER CURIAM.) Appellant, ALLSTATE INSURANCE COMPANY (“Allstate”), seeks review of a decision of the trial court denying its Motion to Compel Arbitration and Motion to Stay Proceedings. New Diagnostic, Inc. (“New Diagnostic”) filed a two count complaint against Allstate arising out of an assignment of benefits received from Ana Padron (“Padron”). Padron was an insured of Allstate who was injured in an automobile accident which occurred on November 5, 1996. Padron went to New Diagnostic for electrodiagnostic testing. New Diagnostic submitted its bill for these treatments to Allstate for payment. Allstate in turn sent Padron’s medical records to a neurologist who found that the amount of diagnostic testing was medically unnecessary. Based upon the medical review done by the neurologist, Allstate denied payment for the electrodiagnostic procedures done on March 12, 1997, noting that the insured’s documentation did not substantiate the need for the testing, pursuant to the PIP statute, § 627.736, Fla. Stat. (1993).
Count I of the complaint was for breach of contract action against Allstate for refusing to pay for diagnostic testing under the policy of insurance and § 627.736, Fla. Stat. (1993). Count II was a claim for declaratory relief alleging that § 627.736(7), Fla. Stat. (1993) required an actual physical examination by a physician from Allstate, prior to the denial of claimed medical bills. Allstate responded by filing its Motion to Compel Arbitration and Motion to Stay Proceedings. The trial court stayed Count I allowing New Diagnostic to proceed under Count II for declaratory relief. Final Declaratory Judgment was entered and Allstate filed this appeal. We find that the trial court erred as a matter of law in denying arbitration and in entering Final Declaratory Judgment.
Courts favor arbitration to expedite claims and reduce litigation. Midwest Mut. Ins. Co. v. Santiesteban, 287 So. 2d 665, 667 (Fla. 1973). “[A]ny time a contract contains an arbitration clause, there is a presumption of arbitrability in the sense that `[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.’ ” U.S. Insurance Company v. Magnetic Imaging Systems, I, Ltd., 678 So. 2d 872, 874 (Fla. 3d DCA 1996), citing Beaver Coaches, Inc. v. Revels Nationwide R.V. Sales, Inc., 543 So.2d 359, 362 (Fla. 1st DCA 1989); citing, AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986); see also, Ronbeck Construction Co., Inc. v. Savanna Club Corporation, 592 So.2d 344 (Fla. 4th DCA 1992).
“The trial court’s role when considering motions to compel arbitration is limited to determining whether a valid written agreement exists, whether an arbitrable issue exists, and whether the right to arbitration was waived.” Fortune Ins. Co. v. U.S.A. Diagnostics, Inc., 684 So. 2d 208, 209 (Fla. 4th DCA 1996). It is uncontested that the Allstate policy contained an arbitration clause. Additionally, § 627.736(5), Fla. Stat. (1993) requires that,
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 attorney’s fees and costs.
Accordingly, the Court finds that a valid written agreement exists requiring the application of the arbitration code and that arbitration is the proper forum for the resolution of any claims dispute between the parties. The Court further finds that there was no waiver of arbitration; therefore, the main issue is whether an arbitrable “claims issue” exists. Allstate argues that there is an arbitrable “claims issue” concerning whether the electrodiagnostic testing performed by New Diagnostics was reasonable and necessary medical service which was related to the accident. Conversely, New Diagnostic argues that this case involves a “coverage issue” involving a pure question of law and therefore cannot be referred to arbitration. New Diagnostic alleges that Allstate’s failure to conduct an independent physical medical exam before denying payment violated the PIP statute. The trial court agreed with New Diagnostic’s position, and entered a declaratory judgment finding that § 627.736(7)(a), Fla. Stat. (1998) was ambiguous and further finding that this section required a physical IME.
Declaratory relief actions are limited to cases involving insurance coverage issues. See United States Fidelity and Guaranty Company v. Woolard, 523 So.2d 798 (Fla. 1st DCA 1988). Further, declaratory relief actions are not the proper vehicle to determine whether medical expenses are reasonable and necessary, or related to the subject accident. See Cruz v. Union General Insurance, 586 So. 2d 91 (Fla. 3d DCA 1991). We find that New Diagnostic’s seeking of declaratory relief was merely an attempt to avoid the arbitration of a legitimate claims dispute concerning the reasonableness of the diagnostic testing by raising a coverage issue based upon the lack of a hands-on physical examination prior to denying benefits.
Section 627.736(7)(a), Fla. Stat. (1998) provides in part that,
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.
Section 627.736(7)(a), Fla. Stat. (1998) (italics added).
“The plain meaning of statutory language is the first consideration of statutory construction.” Shelby Mutual Ins. Co. of Shelby, Ohio v. Smith, 556 So. 2d 393, 395 (Fla. 1990); citing, St. Petersburg Bank & Trust Co. v. Hamm, 414 So. 2d 1071 (Fla. 1982); Opperman v. Nationwide Mut. Fire Ins. Co., 515 So. 2d 263, 266 (Fla. 5th DCA 1987). “Only when a statute is of doubtful meaning should matters extrinsic to the statute be considered in construing the language employed by the legislature.” Shelby Mutual Ins. Co., 556 So. 2d at 395; citing, Florida State Racing Comm’n v. McLaughlin, 102 So. 2d 574 (Fla. 1958); Holly v. Auld, 450 So.2d 217 (Fla. 1984). On its face, this section does not require a hands-on physical examination of the insured prior to the termination of benefits. The only requirement is that the insurer first obtain a report before terminating benefits. This position is supported by the recent opinion of the Third District Court of Appeal in United Automobile Insurance Company v. Viles, 726 So. 2d 320 (Fla. 3d DCA 1998). The court in Viles held that the condition precedent for the reduction, withdrawal or denial of a PIP payment is a medical “report” stating that the treatment was not reasonable, related or necessary. The court in Viles, did not require a hands-on physical; rather, the court expressly required a “report.” Accordingly, we find that the trial court erred as a matter of law in finding § 627.736(7)(a), Fla. Stat. ( 1998) ambiguous and in interpreting the statute to require a physical IME.
The Court notes that this result is consistent with a recent ruling of the Seventeenth Judicial Circuit in the case of Allstate Insurance Company v. Southeast Diagnostic, Inc., Circuit Court Case No. 97-18707 (October 8, 1998). In Southeast, the insured was injured in an automobile accident and two months later received a series of electrodiagnostic tests at Southeast. The insured assigned his rights to seek payment of his PIP benefits to Southeast. Southeast submitted bills for its testing to Allstate, the insured’s PIP carrier. Allstate reviewed the medical records of the insured and determined that the testing was not reasonable and necessary medical care. Accordingly, Allstate denied payment. Southeast then brought a two count complaint against Allstate. Count I, as in the case at bar, alleged a breach of contract against Allstate. Count II, again as in the case at bar, was for declaratory relief alleging that Allstate had a statutory duty to do an actual physical examination of the insured before it denied benefits.
The court found that both counts of the complaint constituted claims disputes and that the case presented a standard dispute over payment. The court further found that there never was any insurance coverage issues nor coverage defenses. Accordingly, the court held that once the provider accepted an assignment of benefits for the insured, all claims disputes and any related issues of fact and law must be decided by binding arbitration, as required by established Florida law and Allstate’s insurance policy.
Accordingly, we find that the trial court erred, as a matter of law, in entering a declaratory judgment where coverage was not at issue. We further find that the trial court erred in refusing to compel arbitration which is mandatory under a PIP claims dispute. The trial court’s entry of Final Judgment is REVERSED and the case is REMANDED for binding arbitration of the claims issue. Accordingly, the Court denies the Appellee’s request for appellate attorneys fees and costs.
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