6 Fla. L. Weekly Supp. 780a
Insurance — Personal injury protection — Insurer not entitled to reduce amount of PIP benefits without an independent medical examination or showing that insured failed to perform a condition precedent — Insurer will not be permitted to escape or reduce liability by alleging that a purported fee review, which was conducted to determine reasonable amount for specified treatment given geographical locale, allows insurer to unilaterally reduce amount of required PIP benefits — Unless it can be shown that insured has failed to perform some condition precedent, insurer must obtain an independent medical examination before PIP benefits are withdrawn, reduced or denied
MANUEL BLANCO, Plaintiff, v. Liberty Mutual Fire Ins. Co., Defendant. County Court of the 11th Judicial Circuit in and for Miami-Dade County. Case No. 99-325 CC 05. August 11, 1999. Roger A. Silver, Judge.
FINAL ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
THIS MATTER is before the Court on Plaintiff’s Motion for Summary Judgment. Having reviewed the court file, the arguments of counsel, and the pleadings, and being fully advised in the premises, the Court finds as follows:
FINDINGS OF FACT
1. Plaintiff, Manuel Blanco, filed his Complaint against Defendant, Liberty Mutual Fire Insurance Company (“Liberty”) alleging that on 7/24/98, Plaintiff was involved in an auto accident in Dade County. As a result of the accident, Plaintiff was allegedly injured and therefore sought medical attention.
2. Plaintiff further alleged that at the time of the accident he was insured by Liberty under PIP policy No. A02-251-834110-007 9.1 Consequently, he submitted his bills for reasonable and necessary medical expenses to Liberty.
3. Liberty has not paid in accordance with Fla. Stat. § 627.736. Liberty argued that Plaintiff failed to comply with all conditions precedent and that Liberty had already paid all reasonable and necessary expenses on behalf of Plaintiff. Finally, Liberty argued that Plaintiff lacked standing to bring this action because he had assigned his benefits to the medical providers whose bills were the subject of this dispute.
4. Subsequently, on 5/3/99, Plaintiff filed his Motion for Summary Judgment arguing that Liberty had received Plaintiff’s medical bills totaling $4,080. Pursuant to the insurance policy, Liberty was obligated to pay $3,264 (80% of the total) in PIP benefits and $816.00 in med-pay benefits for a total of $4,080. Plaintiff argues that Liberty has only paid $2,844.00. Therefore, Plaintiff contends that Liberty has unilaterally reduced the amount of the required payment2 without first obtaining a doctor’s report. Consequently, per Plaintiff’s argument, because Liberty has not obtained the requisite medical report, it is precluded from reducing the benefit amount.
5. Plaintiff’s Motion for Summary Judgment was scheduled for hearing on June 2, 1999. At that time, the Court ordered the parties to brief the issue of whether United Automobile Ins. Co. v. Viles, 726 So.2d 320 (Fla. 3d DCA 1998) (holding that insurer’s termination of PIP benefits without report by physician was ineffective) controlled the instant matter. Pursuant to that Court order, Plaintiff submitted his Supplemental Brief in Support of his prior Motion for Partial3 Summary Judgment (realleging the arguments listed above).
6. Likewise, Liberty submitted its Memorandum of Law in Opposition to Plaintiff’s Motion for Summary Judgment. In this pleading, Liberty argued that it was entitled to reduce the amount of benefits paid because the statute talks about being responsible for “reasonable expenses” and some of Plaintiff’s medical bills were not reasonable. Liberty argues that Plaintiff’s bills were processed centrally in Pennsylvania where a “fee review” was conducted to determine a reasonable amount for the specified treatment given the geographical locale.4 According to Liberty’s argument, because there is no provision in the statute requiring a physician’s report when the dispute involves the reasonableness of the fee, Liberty is permitted to make the reductions that it did. Liberty reasons that because the issue of medical or peer review has not been addressed by the Florida courts, this Court should look to Massachusetts (wherein this methodology of analysis has been ostensibly approved), for guidance.5 Finally, Liberty argues that Plaintiff can always challenge its method of calculating what is reasonable by:
demonstrat[ing] another plausible and coherent method of calculation that would result in higher figures for reasonable and customary charges than those paid by [the defendant]; or alternatively, to show that [Liberty’s] method of calculating reasonable and customary charges was conceptually flawed.
Boston v. John Hancock Mut. Life Ins. Co., 619 N.E.2d 622 (Mass. App Ct. 1993).
CONCLUSIONS OF LAW
1. Quite simply, Liberty’s argument is unsupported by Florida decisional law. Hence, Liberty must rely on the law of Massachusetts, which, while interesting, is not the law of this State. In a nut shell, Liberty is arguing that it is entitled to unilaterally determine what is a reasonable fee for medical services rendered (based on the geographical locale) and then to pay only up to that amount. Thus, the burden is shifted to the insured to prove that the method of calculating the amount paid was not reasonable. Liberty concedes that it is not arguing that it may unilaterally determine what is reasonable medical treatment because in order to do so, it would be required to obtain a medical report first. However, according to this argument, because Liberty is only determining the reasonableness of the fee, a medical report is not required
2. While this argument is conceptually intriguing, it is most certainly at odds with the law of this State. If it were otherwise, insurers could easily escape (or reduce) liability by facilely arguing in every case that the charges are not reasonable. Furthermore, United Automobile Ins. Co. v. Viles, 726 So. 2d 320 (Fla. 3d DCA 1998) is directly on point and compels the opposite conclusion.
3. In Viles, the insured brought an action to recover PIP benefits after the insurer stopped paying the chiropractor’s bills. The insurer had already paid $1,100 before it decided to suspend further payments based on its suspicion that the bills were fraudulent and not reasonably related. The insurer did not obtain an IME. After the trial, the insured moved for a directed verdict. The court reserved on the motion and the matter was submitted to the jury which awarded the insured only a portion of the claimed amount. However, after the jury’s verdict, the court granted the insured’s motion for a directed verdict reasoning that the insurer was barred from raising as a defense that the bills were not reasonable or necessary because it had failed to obtain the requisite IME. Therefore, notwithstanding the jury’s findings of fact, final judgment was entered for the insured in the entire amount requested. Additionally, the court certified the following question as being of great public importance:
[i]n any claim for personal injury protection benefits in which the insurance carrier has withdrawn, reduced benefits or denied further benefits, is it a condition precedent pursuant to Section 627.736(7)(a), Florida Statutes, that an insurer obtain by a physician licensed under the same chapter as the treating physician stating that the treatment was not reasonable, related or necessary in order for the insurance carrier to defend a suit for reduction, withdrawal or denial of further payments on the grounds of reasonableness, necessity or relationships [Emphasis added]
4. To this abundantly clear question, the Third District replied “[w]e answer the certified question in the affirmative, and affirm the order below.” Therefore, unless it can be shown that the insured has failed to perform some condition precedent, the holding in Viles clearly requires that before benefits are withdrawn, reduced or denied, the insurer must obtain an IME.
5. In this case, Liberty will not be permitted to escape or reduce liability by alleging that a purported “fee review” (conducted in Pennsylvania) allows the insurer to unilaterally reduce the benefit amount. The law in this area is quite clear and well-settled — as in Viles, Liberty in the case at bar was not entitled to reduce benefits without an IME or a showing that the insured failed to perform a condition precedent.
WHEREFORE, it is ORDERED and ADJUDGED
Plaintiff’s Motion for Summary Judgment is GRANTED.
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1Plaintiff maintained that the policy was in the exclusive possession of Liberty and that it would be produced through discovery. However, it is still not part of the record in this case. Nevertheless, Plaintiff later avers that the policy had a maximum PIP coverage of $10,000 with no deductible and $1,000 Med Pay Coverage.
2It is not clear what the actual disputed amount in this case is — at one point Plaintiff argues that Liberty received an x-ray bill for $520. Liberty should have paid $416 (or 80%). Instead, Plaintiff alleges that Liberty paid only $170. But, if this is the only discrepancy of which Plaintiff is complaining, then it is unclear why Plaintiff alleges that Liberty was obligated to pay $3,264 but has only paid $2,844.
3It is not clear why this pleading is now styled “Partial” Summary Judgment.
4Apparently, based on this fee review, Liberty determined that the x-rays of Plaintiff’s entire back and head were unrelated to Plaintiff’s reported injuries to the neck and shoulders. Therefore, Liberty argues that because Plaintiff failed to provide documentation of the full extent of his injuries, Liberty deemed the “extra” x-rays unnecessary.
5In support of this position, Liberty cites to NY v. Metro. Prop. & Cas. Ins. Co., 1998 WL 603138 (Mass. App. Ct. 1998) (attached in Liberty’s Memorandum of Law in Opposition, tab 4), for the proposition that when an insurer has conducted a fee review of the amount of the charge, no peer review is necessary before the insurer pays only the amount of the charge which is deemed reasonable. Per Liberty, see also, Nhem v. Metro. Prop. & Cas. Ins.Co., 1997 WL 321374 (Mass App. Ct 1997) (attached at tab 5).
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