8 Fla. L. Weekly Supp. 839a
Hospitals — Health Maintenance Organizations — Insurance — Hospital claim of lien — Action by hospital to pursue liens against patient’s personal injury protection and uninsured motorist coverage rather than submitting bills to patient’s health insurance carrier where express terms of participating provider agreement between hospital and carrier provide that hospital will accept payment from carrier as payment in full for covered services — Coordination of benefits provision of health insurance policy operates as between health insurance carrier and insured only, not as vehicle for hospital to circumvent express terms of contract to accept payment from carrier as payment in full — Hospital waived statutory right to pursue its liens by entering into participating provider agreement with health insurance carrier — Medicare and Medicaid statutes, which provide that payment may not be made for any item or service to the extent that payment is made or can reasonably be expected to be made by automobile, liability or no fault insurance, are inapplicable — No merit to claim that because participating provider contract does not contain express language modifying or limiting hospitals’ statutory hospital lien rights, silence must result in upholding lien claims as if there were no health insurance coverage — Contract read in pari materia with Florida HMO Act provision that HMO subscriber is not liable to medical provider for any services for which the HMO is liable supports conclusion that hospital has no right to recourse against patient except for applicable co-payments and deductibles for covered services or fees for services not covered by health insurance policy — Liens invalidated by HMO Act
See 9 Fla. L. Weekly Supp. 380a
SOUTH BROWARD HOSPITAL DISTRICT, a Special Tax District of the State of Florida d/b/a MEMORIAL REGIONAL HOSPITAL, Plaintiff, vs. CHARLES GIBSON and ALLSTATE INSURANCE COMPANY, Defendant. CHARLES GIBSON, Defendant/Counter-Plaintiff, vs. SOUTH BROWARD HOSPITAL DISTRICT, a Special Tax District of the State of Florida d/b/a MEMORIAL REGIONAL HOSPITAL, Plaintiff/Counter-Defendant. CHARLES GIBSON, Defendant/Cross-Plaintiff vs. ALLSTATE INSURANCE COMPANY, Defendant/Cross-Defendant. Circuit Court, 17th Judicial Circuit in and for Broward County. Case No. 98-6738 (09). October 1, 2001. Robert Lance Andrews, Judge.
ORDER
THIS CAUSE having come before the Court upon Plaintiff/Counter-Defendant’s Motion for Summary Judgment, and Defendant/Counter-Plaintiff’s Motion for Partial Summary Judgment, and the Court having considered same, having heard argument of counsel, and being otherwise duly advised in premises, finds and decides as follows:
On August 22, 1997, the Defendant/Counter-Plaintiff, Charles Gibson was injured in a motor vehicle accident and was then admitted to Memorial Hospital and received services from the hospital. At the time of Mr. Gibson’s accident, he maintained health insurance coverage through Neighborhood Health Partnership (“NHP”). Memorial Hospital is a participating provider pursuant to a Participating Agreement Between Neighborhood Health Partnership, Inc. and Memorial Physician-Hospital Organization, Inc. During the period Mr. Gibson was in the hospital, Memorial Hospital sought and obtained a certification of medical necessity from Neighborhood Health Partnership, as provided by the partnership agreement. On September 16, 1997 and January 8, 1998, respectively, Memorial Hospital recorded its Hospital Claim of Lien in the amounts of $47,718.00 and $2,730.00. Mr. Gibson submitted a claim to Neighborhood Health Partnership for the services rendered during his hospital stay, for payment to Memorial Hospital.
After his discharge from the Hospital, Mr. Gibson through his counsel, elected to have all the PIP coverage available under his Allstate automobile insurance policy be allocated to lost wages, as permitted under Holloway v. State Farm Mutual Automobile Insurance Company, 370 So.2d 452 (Fla. 4th DCA 1979). On October 15, 1997, Allstate tendered a check in the amount of $10,000.00, payable to Charles Gibson and Memorial Regional Hospital. Neighborhood Health Partnership issued a check to Memorial Hospital for the claim filed by Mr. Gibson, for $6,500.00 less his $200.00 deductible. This check was ultimately returned by Memorial Hospital to Neighborhood Health Partnership.
Counsel for Mr. Gibson returned the check representing PIP benefits to Allstate, and requested that a new check be issued to Mr. Gibson only. However, Allstate sent a check for $10,000.00 directly to the Hospital. On or about October 30, 1997, Mr. Gibson settled his uninsured motorist claim with Allstate and received a check in the amount of $20,000.00.
The Hospital asserts that the settlement between Mr. Gibson and Allstate constituted an impairment of each of Memorial’s liens, and therefore, Memorial is entitled to partial summary judgment against Defendants for those impairments. Memorial argues that the Broward County lien law provides that Memorial is entitled to a lien for all reasonable charges for hospital care, treatment and maintenance of ill or injured persons. Memorial further argues that pursuant to Section 16-13 of the Broward County Lien Law, once they properly filed and recorded the liens, the liens extended to:
any and all causes of action, suits, claims, counterclaims and demands accruing to the persons to whom such care, treatment or maintenance are furnished . . . and upon all judgments, settlements and settlement agreements rendered or entered into by virtue thereof, on account of illness or injuries giving rise to such cause of action, suits, claims . . . and which necessitated or shall have necessitated such hospital care, treatment and maintenance. . .
Plaintiff/Counter-Defendant, Memorial Hospital asserts that a claimant with a valid hospital lien is afforded a status which is superior to all others and its claim is not subject to reduction.
Defendant/Counter-Plaintiff argues in support of his Motion for Partial Summary Judgment that by the express terms of the contract entered into between Memorial and Neighborhood Health Partnership, the Hospital’s only recourse was to seek reimbursement for medical bills from Mr. Gibson’s health insurance provider.
Section 4.5 of the Participating Agreement between Neighborhood Health Partnership, Inc. and Memorial Physician-Hospital Organization Inc. provides that:
Payment by NHP of the amounts determined in accordance with Exhibit 4.2 shall be considered payment in full for all Covered Services. PHO and/or its members agree that it shall not bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against any Covered Person or person acting on a Covered Person’s behalf for Covered Services provided pursuant to this Agreement. This provision shall not prohibit PHO and/or its members from collecting from Covered Persons services not covered under the applicable product and applicable deductibles and/or copayments as provided in this Agreement. This section shall survive termination or expiration of this Agreement regardless of the cause giving rise to termination, and shall be construed to be for the benefit of Covered Persons. (Emphasis added)
By the express terms of the contract, the Hospital agreed to accept payment from Neighborhood Health Partnership as payment in full for all services rendered to Defendant/Counter-Plaintiff, and further agreed not to seek payment, in any form, from Defendant/Counter-Plaintiff. It is undisputed that Mr. Gibson paid the $200.00 deductible. Furthermore, the Hospital is not claiming that any of the amounts recorded by the liens are for “uncovered services.” The Hospital merely asserts that it had a right to forego the contract and pursue its liens against Mr. Gibson’s PIP and uninsured motorist coverage with Allstate.
The Hospital attempts to argue that it is entitled to pursue its Hospital Claim of Lien against PIP and uninsured motorist benefits instead of submitting a claim to a patient’s health insurance carrier pursuant to coordination of benefits law. The Hospital refers to Mr. Gibson’s Neighborhood Health Partnership Policy, Article VIII, Section A which provides that:
A. Coordination of Benefits
When a Covered Person is covered by more than one group health plan or insurance program, this Coordination of Benefits provision controls which plan or insurance carrier will be the primary payor and which will be the secondary payor.
In coordinating benefits, one of the two or more plans or programs involved is the primary plan or program and the other plans are secondary (or tertiary, as the case may be). Payments from secondary plans are coordinated so that the total of the payments from all plans or programs are not more than 100% of the Plan’s benefits for Covered Services. (Emphasis added)
Any plan without a Coordination of Benefits provision is automatically designated as the primary plan. Where the applicable plans all have coordination of benefits provisions, the Plan’s coordinator will determinate the order of benefits . . . .
B. THE PLAN IS ENTITLED TO RECOVER FROM THE COVERED PERSON, AMOUNTS THAT ARE OVERPAID TO HIM OR FOR HIM FOR MEDICAL SERVICES PROVIDED BY THE PLAN. (Emphasis Added)
It is clear that this provision operates as between the Neighborhood Health Partnership plan and the member only, not as a vehicle for the Hospital to circumvent the express terms of its contract with Neighborhood Health Partnership to accept payment. The provision expressly provides that any payments from secondary plans are coordinated so the total of payments from all plans are not more than 100% of the Plan’s benefits for covered services. It belies logic to interpret this provision so as to allow the Hospital to pursue their lien instead of submitting a claim to the health insurance carrier. Indeed, this provision does just the opposite; it makes known the intention that the Hospital is not entitled to more than 100% of the Plan’s benefits for covered services. Allowing the Hospital to pursue its lien against PIP and uninsured motorist benefits is in direct contradiction to the Coordination of Benefits provision.1
It is well settled under the rules established for interpretation of written contracts, if the language of the contract is clear and unambiguous, there is no occasion for construction, and the language will be accorded its natural meaning. New Amsterdam Casualty Co. v. Addison, 169 So.2d 877 (Fla. 2d DCA 1964). The contract in question contains no ambiguities; the Hospital was not to pursue reimbursement for services from anyone other than Neighborhood Health Partnership.
The general rule is that competent parties shall have the utmost liberty of contracting and their agreements voluntarily and fairly made will be upheld and sustained by the courts. All parties sui juris are free to make whatever contract they may choose so long as no fraud or deception is practiced, and there is no infraction of law. The fact that one of the parties to a contract made a hard bargain will not alone avoid a contract.
Pierce v. Isaac, 184 So. 509 (Fla. 1938). The fact that the Hospital desires to reap more benefits than that to which it agreed to under the participating provider contract, does not allow it to void the contract.
Additionally, it is a well-established principle that a party may waive any right to which he is legally entitled, whether secured by contract, conferred by statute, or guaranteed by the Constitution. See Bellaire Securities Corp. v. Brown, 168 So. 625 (Fla. 1936). A waiver may be express or implied. Thomas N. Carlton Estate, Inc. v. Keller, 52 So.2d 131 (Fla. 1951). Clearly, the Hospital waived its statutory right to pursue its lien, by freely entering into the participating provider agreement with Neighborhood Health Partnership, and agreeing therein to accept payment from NHP as payment in full for covered services.
However, Memorial argues that because the “NHP” provider contract did not contain express language modifying or limiting Memorial’s statutorily derived hospital lien rights, such silence must result in this Court upholding Memorial’s lien claims as if there had been no NHP coverage at all. Memorial asserts its position is supported because it is hospital industry standard and practice to bill the PIP carrier, enforce its hospital lien, and bill the health insurance carrier last. Memorial states that the acceptability of this type of coordination of benefits and prioritization is found in the Medicare Secondary Payor Act, 42 U.S.C. 1395(y)(b)(2)(a). The Medicare Secondary Payor Act is a federal statute which specifically requires that payment may not be made with respect to any item or service to the extent that payment has been made or can reasonably be expected to be made under an automobile or liability insurance policy or under no fault insurance. The same is true with Medicaid, which requires that the participating state or state agency administering the plan ascertain whether any third party is legally liable for the medical services and seek reimbursement. 42 U.S.C. 1396a(a)(25). These statutes are inapplicable to the case at bar. Florida, however, does have in place a statute, the Health Maintenance Organization (HMO) Act which might be construed so as to prohibit the Hospital from enforcing its lien.
In construing a statute a court must ascertain and give effect to the legislature’s intent in enacting the statute. Deltona Corp. v. Florida Public Service Comm., 220 So.2d 905 (Fla. 1969). If the language of a statute is clear and unambiguous, courts are not permitted to resort to other rules of construction. Tropical Coach Line, Inc. v. Carter, 121 So.2d 779 (Fla. 1960). Where two legislative enactments allegedly conflict, the court has a duty to construe those statutes in a manner that avoids an inconsistency and gives effect to both enactments, if such a construction is reasonably possible. Curry v. Lehman, 47 So. 18 (Fla. 1908). The legislature is presumed to have intended that statutes relating to a single subject and controlled by a single policy will be consistent and harmonious, and any apparent conflicts between two such statutes will be reconciled if possible. Id.
Turning to the hospital lien law, the act provides for liens in favors of hospitals upon causes of action, suits, claims, counterclaims and demands accruing to patients therein and upon judgments, settlements and settlement agreement, on account of illness or injuries of such patients, for all reasonable charges for hospital care, treatment and maintenance necessitated by such illness or injuries. The legislative intent as to the hospital lien law has been interpreted so as to assure hospitals a source of payment for the medical care they provide to nonpaying or indigent patients, and assure that the hospital should have no reluctance about providing further services in view of potential anticipated costs. Palm Springs Gen. Hosp., Inc. v. State Farm Mut. Auto. Ins. Co., 218 So.2d 793 (Fla. 3d DCA 1969). As the Court in Palm Springs, stated:
No lien is necessary against the injured patient as the usual channels of legal recourse are available against a solvent patient indebted to the hospital for services The problem to which the Legislature addressed itself arises for the hospital when it is confronted with an insolvent patient whose treatment results in a mounting bill for expenses.
Id. at 798.
Section 641.18 Florida Statutes sets forth the legislative intent in enacting the HMO Act:
(1) Faced with the continuation of mounting costs of health care, coupled with the state’s interest in high-quality care, the Legislature has determined that there is a need to explore alternative methods for the delivery of health care services, with a view toward achieving greater efficiency and economy in providing these services.
(4) It shall be the policy of this state to:
(a) Eliminate legal barriers to the organization, promotion, and expansion of comprehensive prepaid health care plans.
The Department of Insurance regulates the activities of prepaid health care plans, and requires every contract to clearly state all of the services to which a subscriber is entitled and must include a clear understandable statement of any limitations on the services provided. §641.31(4), (5) Florida Statutes. The Act further sets forth provisions dealing with provider contracts. Section 641.315 Florida Statutes provides that:
(1) Each contract between a health maintenance organization and a provider of health care services must be in writing and must contain a provision that the subscriber is not liable to the provider for any services for which the health maintenance organization is liable as specified in s. 641.3154. (Emphasis added)
Section 641.3154 provides:
(4) A provider or any representative of a provider, regardless of whether the provider is under contract with the health maintenance organization, may not collect or attempt to collect money from, maintain any action at law against, or report to a credit agency a subscriber of an organization for payment of services for which the organization is liable, if the provider in good faith knows or should know that the organization is liable. . . .
As Memorial cites, 17 C.J.S.; Contracts; Section 27 provides:
The general rule is that every contract is governed by the laws, including judicial precedents, as well as regulations and ordinances in effect at the time it is executed, unless the contract expressly provides otherwise. The statutes and laws in existence at the time a contract is executed are considered part of the contract as fully as if incorporated by reference, whether or not the laws are specifically incorporated into the contract . . .
It is presumed that parties contract with knowledge of the existing law, and intend the law to bind the contract. It is improper, therefore, to construe a contract outside the legal conditions underlying the transaction. Further, parties are generally deemed to contract in reliance on existing law. So, when parties make no provision for a particular situation in a contract, it must be assumed that the parties intended to bind themselves not only to the express provisions of the contract, but also to the law as implied in the contract. Silence, on the issue of the applicable law in an agreement will not negate that law, as contractual adjustment or rights contrary to law must be clearly expressed in agreement before the applicable law will not apply.
Although Memorial relies on this principle to support their argument that because the contract did not contain language expressly modifying or limiting its statutorily derived hospital lien rights, this Court must uphold the lien; however, a cursory reading of the contract in pari materia with the HMO Act supports the opposite outcome. As stated above, §641.315 expressly states that each contract between a health maintenance organization and a provider of health care services must contain a provision that the subscriber is not liable to the provider for any services for which the health maintenance organization is liable as provided in §641.3154. Section 641.3154 expressly provides that a provider may not collect or attempt to collect money from, or maintain any action at law against a subscriber of an organization for payment of services for which the organization is liable. Turning to the participating provider agreement herein, the language of the HMO Act is incorporated into the contract in section 4.5 which states that “PHO and/or its members agree that it shall not bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or of any recourse against any covered person for covered services pursuant to this agreement.” Therefore, the HMO Act, as it was in existence at the time the contract was executed must be considered part of the contract; and it is improper for this Court to construe the contract outside the legal conditions underlying the transaction.
While the Hospital Lien Law permits Memorial Hospital to file a lien against money paid to a patient who settles an insurance claim, section 641.3154(4) of the HMO Act provides that Memorial has no right to recourse against Mr. Gibson except for applicable co-payments and deductibles for the medical services covered by the policy, or fees for services not covered by the policy. There being no indication that the lien was filed to recover payment for one of these exceptions in the matter at bar, the Hospital’s lien is invalidated by section 641.3154(4) Florida Statutes.2
Accordingly, it is hereby
ORDERED AND ADJUDGED that Plaintiff/Counter-Defendant’s Motion for Summary Judgment is DENIED.
It is further ORDERED AND ADJUDGED that Defendant/Counter-Plaintiff’s Motion for Partial Summary Judgment is GRANTED.
It is further ORDERED AND ADJUDGED that Memorial Hospital is directed to refund the $10,000.00 representing PIP benefits to Allstate Insurance Company, plus statutory interest.
It is further ORDERED AND ADJUDGED that Memorial Hospital provide and file a satisfaction of lien.
This Court reserves jurisdiction to adjudicate reasonable costs and attorneys fees in this matter.
__________________
1The Court must note that under Part III Personal Injury Protection — Limits of Liability, the terms of Mr. Gibson’s policy with Allstate state that: Benefits will be reduced by (2) Amounts received from any insurer for the same items of loss and expense for which benefits are available under this policy. This reduction applies only to amounts that are a duplication of payment for the same loss or expense. The insurer paying these benefits, however, will be entitled to recover from us an equitable pro-rata share of the benefit paid and expenses incurred in processing the claim. Additionally, under Part IV Uninsured Motorist Insurance — Limits of Liability provides in section (2) that Damages payable will be reduced by (b) All amounts payable under any workers compensation law, disability benefits law, or similar law.
2Although no Florida case addresses this issue, courts in other jurisdictions have agreed with this conclusion. See N.C. v. A.W., 713 N.E.2d 775 (Ill. App. 2 Dist. 1999); Richmond v. Caban, 2001 WL 973929 (Ill. App. 2 Dist. 2001); Dorr v. Sacred Heart Hosp., 597 N.W.2d 462 (Wisc. App. 1999).
* * *
