6 Fla. L. Weekly Supp. 356b
Insurance — Personal injury protection — Arbitration — Where insurer refuses to pay certain bills based on its belief that treatment is not covered under policy, insurer’s motion to dismiss and to compel arbitration denied — When the insurer flatly denies that certain treatment is covered, insured retains ability to contest that decision in court of law — Because section 627.736(5) states that providers “may charge only a reasonable amount,” the term “claims dispute” as used in arbitration statute contemplates only disputes in which insurer agrees that certain treatment is covered, but disputes the reasonableness of dollar amount being charged for that treatment
ROBERT VAN DUSEN and MARGARET VAN DUSEN, Plaintiffs, vs. NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Defendant. County Court of the 10th Judicial Circuit in and for Polk County. Case No. 98-CC11-2823. March 9, 1999. Michael E. Raiden, Judge.
ORDER ON MOTION TO DISMISS
This cause came on for hearing on the Motion to Dismiss and to Compel Arbitration by Defendant NATIONWIDE MUTUAL FIRE INSURANCE CO. Present were William J. Corda, Esq., counsel for Plaintiffs ROBERT and MARGARET Van DUSEN, and Tracy M. Falkowitz, Esq., counsel for Defendant. Upon a review of the arguments of the parties, the files and records in this case, and the applicable law, the Court finds as follows:
1. Plaintiffs were injured in a 1995 automobile accident, and claim to be suffering continued problems requiring medical treatment. Their insurer at the time (Defendant NATIONWIDE) has refused to pay certain bills, including those from Winter Haven Hospital and two chiropractors, resulting in the present lawsuit.
2. The motion to dismiss is grounded in Fla. Stat. §627.736(5), which will be discussed in greater detail in succeeding paragraphs. Briefly summarized, it provides that disputes between insurance companies and health care providers who have received assignments of benefits must be referred to arbitration. The statute was declared unconstitutional in Delta Casualty Co. v. Pinnacle Medical, Inc., Nos. 97-1429 et al. (Fla. 5th DCA October 2, 1998) [23 Fla. L. Weekly D2233]. That decision was not, however, unanimous, the dissent relying on Orion Insurance Co. v. Magnetic Imaging Systems I, 696 So. 2d 475 (Fla. 3d DCA 1997). In any event, the decision reached by this Court does not require it to reach the constitutional question. Neither is it necessary to determine whether the agreements between Plaintiffs and the respective providers constitute assignments for purposes of §627.736(5). Instead, the Court has determined that it will follow the well-reasoned opinion of Judge David C. Morgan in Glover v. State Farm Mutual Automobile Insurance Co., No. 96-267-CC10 (Indian River County Court August 12, 1997) [5 Fla L. Weekly Supp. 564].
3. The Florida Statutes’ mammoth Chapter 627 represents nearly two hundred pages’ worth of regulations, establishing if nothing else that this is an unusually contentious subject. The particular statute involved herein falls within those sections designated as the “Florida Motor Vehicle No-Fault Law.” Section 627.736 appears designed to effect a number of desired goals, among them the timely payment of benefits. In fact, a great deal of its language can fairly be interpreted as evincing a legislative desire that PIP claims be handled in an expeditious fashion. For example, an insurer may pay a medical provider directly if the insured has countersigned its invoice or bill. However, subsection (5), which states that providers “may charge only a reasonable amount” for products and services rendered to injured persons covered by PIP insurance, seems to be intended primarily to prevent overcharging by providers (who know a source of reimbursement is readily at hand), and to afford insurers a measure of protection by requiring arbitration (rather than jury trial) in disputes over these charges. Insofar as it applies only when the provider has accepted assignment of benefits, it is questionable whether the insured remains more than a nominal party in such settings.
4. In Glover the trial court held that the arbitration rule applies only to, but doesn’t define what is, a “claims dispute.” Two different types of potential disputes may be envisioned: In one, an insurance company agrees that certain treatment is covered, but disputes the reasonableness of the dollar amount being charged for that treatment; in the other, an insurance company simply refuses to pay anything, based on its belief that the treatment isn’t covered under the policy. Since §627.736(5) employs the wording “reasonable amount,” the term “claims dispute” as used therein contemplates only the first of these two examples. By contrast, when the insurer flatly denies that a certain treatment is covered, the insured retains the ability to contest that decision in a court of law. In the present case, the parties’ dispute seems also to be of the latter variety. Little would be accomplished by referring a price dispute to arbitration, only to have the insurer then deny any responsibility for a claim the arbitrator found fiscally reasonable.
Accordingly, it is ORDERED and ADJUDGED that the Defendant’s Motion to Dismiss and to Compel Arbitration is hereby DENIED. Defendant shall file its answer within 20 days of the date of this order.
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