7 Fla. L. Weekly Supp. 627b
Insurance — Personal injury protection — Assignment — Priority of payments — Insurer may not randomly select order in which it will pay or apply medical expenses to a deductible — Insurer improperly applied health care provider’s charges to deductible rather than hospital charges which were received prior to health care charges, based upon belief that it was in best of interest of insured to pay hospital bill which might potentially impose lien on insured’s property — Once insured assigned his right to benefits to medical providers, his interests were no longer insurer’s concern and insurer became merely a holder of funds which were subject to competing claims — Where there were competing claims among persons claiming assignment of benefits, insurer should have paid benefits and applied deductible based upon order in which it received medical bills — Under facts of case, receipt of actual copy of signed assignment was not required before insurer applied deductible — Insurer may not raise payment of its policy limits as defense to erroneous method of applying the deductible — Decision establishing rights of assignee regarding priority of payments made by insurer does not impose judgment exceeding insured’s policy limits
TOWER HEALTH CENTER, (Clive Watson), Plaintiff, vs. LYNDON PROPERTY INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 99-02665 COCE (56). Bar No. 331112. June 5, 2000. Linda R. Pratt, Judge. Counsel: Gary Marks. Ralph McGrath.
ORDER GRANTING FINAL SUMMARY JUDGMENT
THIS CAUSE having come on to be heard before me on Plaintiff’s Motion for Final Summary Judgment and the Court having heard the argument of counsel and being otherwise fully advised in the premises, it is hereby
ORDERED AND ADJUDGED:
FINDINGS OF FACT
1. It is stipulated by the parties that TOWER HEALTH CENTER, was an assignee of Clive Watson and submitted medical bills on a HCFA form to the defendant for various dates of service. Additionally there is no issue regarding the reasonableness or necessity of the medical expenses.
2. On 11/16/98 Lyndon Property Insurance Company received HCFA forms from the Plaintiff, TOWER HEALTH CENTER for dates of service from 10/30/98 through 11/9/98, for charges totaled $1320.00.
3. LYNDON PROPERTY INSURANCE COMPANY received a UB-92 form, from MEMORIAL REGIONAL HOSPITAL for dates of service from 9/26/98 through 9/27/98 on 11/18/98. The total charges for this provider was $5727.00.
4. On 12/2/98 to 12/3/98 the defendant Lyndon Property Insurance Company received bills from Tower Health Center for dates of service from 11/18/98 through 11/30/98 totaling $1,790.00. The Defendant utilized these charges to satisfy the deductible and then paid $488.00 of these charges once the deductible was satisfied. All of the charges by TOWER HEALTH CENTER were submitted on HCFA forms with Box 26 checked indicating that the provider accepted assignment.
5. It is stipulated between the parties that Lyndon Property Insurance Company applied the entire $2000 deductible under Clive Watson’s Insurance Policy to the medical expenses of Tower Health Inc. In doing so it held the bills submitted by Memorial Regional Hospital until the bills submitted by Tower Health Inc. satisfied the deductible. This was done in spite of the fact that the bills from Memorial Regional Hospital were received prior to the bills for dates of services for many of the medical expenses from Tower Health Inc. that were utilized to satisfy the deductible.
6. The defendant Lyndon Property Insurance Company filed an affidavit that it did not receive an “actual” copy of the executed assignment by the patient Clive Watson. There is nothing in the record indicating that a copy of the assignment was ever requested or that the decision to reimburse the medical expenses in the order that the defendant did was due to the fact that it did not have an assignment from Tower Health Center, Inc. Rather, in its own affidavit, the Defendant concedes that its decision to use Tower Health Center, Inc.’s charges to satisfy the deductible was based upon the belief that was in the best interest of the insured to pay a hospital bill which might potentially impose a lien on the insured’s property.
Conclusions of Law
The issue before this court is whether an Insurance company may randomly select the order in which it will pay or apply medical expenses to a deductible. The insurance company in this matter believes that it was better to apply the deductible to the Health Care provider’s charges than to the Hospital’s charges, believing that the hospital might potentially assert a lien against the insured’s property. While the defendant’s intentions might seem noble, using the medical bills of the plaintiff in order to satisfy the deductible was improper. Once the insured assigns his right to benefits to a medical provider his interests vis a vis the assignee are no longer the insurance company’s concern. State Farm vs. Ray 556 So.2d 811 (Fla. 5th DCA, 1990). The assignment divests the insured of the right to direct how the policy benefits will be paid. The insurance carrier here attempted to revive the interest of the insured and select how the benefits would be applied in a manner which it believed the insured would have intended. This is improper.
Once the assignment was executed, the insurance company became merely a holder of the funds which were subject to competing claims. If there were competing claims among persons claiming assignment of these proceeds, the defendant should have paid the benefits and likewise applied the deductible in the order it received bills. Boulevard National Bank vs. Air Metal Industries, 176 So. 2d 94 (Fla., 1965). Additionally this result is further mandated by the appellate courts in this jurisdiction under similar facts. See Pinnacle Medical Inc. vs. Allstate Insurance Company, Case No. 97-12340 (18) Judge Moriarty 17th Judicial Circuit, Broward County, Florida and Physician’s Diagnostic and Rehab Inc. vs. State Farm Mutual, Case No. 97-2591 (12) Judge Miller 17th Judicial Circuit, Broward County, Florida. Thus the insurance carrier should have applied the deductible in the following fashion based upon the order in which it received the medical bills.
| Provider/Date of Service | Total Charge | 80% |
| Tower Health 10/30-11/9/98 | $1320.00 | $1056.00 to Deductible |
| Memorial Regional 9/26/98 | $5727.00 | $4581.60 ($944.00) to Deductible |
Thus 80% of all of Tower Health’s charges after its initial billing of $1320.00 should have been paid by the Defendant1.
The defendant stipulated that there was an assignment of benefits but urges that it is not liable because an actual copy of the original assignment was not received by it before it applied the deductible. Additionally it contends that since it paid out its policy limits it can not be required to pay additional sums absent finding of bad faith or malicious intent.
With regard to the issue of receipt of the assignment, the court finds that it is not necessary for the insurance carrier to receive an actual copy of the signed assignment under the facts in this case. Defendant’s decision to pay was not based upon whether it believed that Tower Health Center held an assignment; rather it unilaterally decided to give preference to the Hospital bill thinking that this would be better for its insured. There was no documentation received from the hospital demanding or inferring that it was entitled to a preference over any other medical provider’s bill. In fact the only notice regarding any one having an assignment was from the plaintiff Tower Health Center. The HCFA form received from the plaintiff Tower Health Center indicated that it accepted assignment. While the HCFA form by itself, may not have been sufficient to create an assignment, it was sufficient to put the defendant Lyndon Property Insurance Company on notice to inquire about the existence of an assignment2. See BIOTRONIX vs. SECURITY NATIONAL INSURANCE COMPANY, 5 Fla. L. Weekly Supp. 696a, County Court in and for Dade County, Civil Division. Case No. 96-12868 SP05. May 26, 1998.(HCFA form with box 26 checked sufficient to put insurance company on notice of the fact that there is an assignment accepted by health care provider, there being no common law or statutory requirement that the assignment document(s) be provided to the debtor for examination before liability attaches.)
The second point urged by the Defendant, regarding the requirement of bad faith or manipulative behavior before the court may impose liability in excess of the policy limits is also without merit. Clearly the law of assignments applies to an insurance company in PIP matters. State Farm Fire and Cas. Co. v. Ray, 556 So.2d 811 (Fla. App. 5th Dist. 1990); Margiotta v. State Farm Mutual Automobile Insurance Company, 622 So.2d 135 (Fla. App. 4th Dist. 1993). This decision does not impose a judgment exceeding the insured’s policy limits. It merely establishes the rights of an assignee regarding the priority of payments made by the Defendant. It does preclude the defendant from raising the payment of its policy limits as a defense to the erroneous method of applying the deductible. See Pinnacle Medical and Physician’s Diagnostic and Rehab., supra. If the defendant misapplied benefits it may certainly seek those benefits back from the party it mistakenly or inappropriately paid. This however is not the concern of the party aggrieved by the insurance carrier’s decision.
Accordingly, Plaintiff’s Motion for final summary judgment is granted, and Plaintiff shall submit a judgment for those medical expenses that should have been paid by the insurance carrier to Tower Health Center, Inc. following the application of the deductible to Memorial Regional’s bill.
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1It is essential to note that there was no issue raised in this case as to the reasonableness or necessity of the bills, nor did Defendant claim it had any grounds to deny their payment. Such facts might alter the picture.
2This assumes that having the signed assignment was material to the Defendant’s decision on how it was going to apply the deductible.
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