9 Fla. L. Weekly Supp. 772a
Insurance — Personal injury protection — Preferred provider rates — Section 627.736(10) provides the exclusive means by which an insurer can contract to pay PPO rates on Florida PIP claims — Assignee’s motion for partial summary judgment granted as to affirmative defenses based on alleged PPO contract where insurer failed to enter into contract directly with assignee, failed to provide an option to insured to use a PPO policy, and failed to provide insured with a current roster of preferred providers in the county where he resided at the time of purchase of the PIP policy
CHARLES TUCKER, D.C., As assignee of Benjamin P. Tucker, Plaintiff, vs. NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2001-35482-COCI, Division 82. September 27, 2002. H. Pope Hamrick, Jr., Judge. Counsel: Kimberly Simoes, Susan W. Tolbert, P.L., Daytona Beach. Alan K. Cooper.
ORDER
This Matter having come before the Court on August 1, 2002 upon Plaintiff’s Motion for Summary Judgment, and the Court having heard argument from Counsel, reviewed Memorandum of Law and many cases submitted by both parties, finds as follows:
1. The Plaintiff filed a Motion For Partial Summary Judgment and recited the relevant facts that on October 16, 1999 claimant Benjamin Kyler was involved in a motorcycle accident resulting in bodily injury. This injury was covered by an insurance policy issued by Defendant Nationwide Mutual Insurance Company and provided PIP benefits. The insured received medical treatments from the Plaintiff and assigned the benefits in favor of the Plaintiff, Charles Tucker, the insured’s medical provider. After receipt of the medical bills the Defendant NATIONWIDE MUTUAL INSURANCE COMPANY reduced the bills pursuant to a CCN Network contract (Preferred Provider). The Defendant did not pay at the contractual 80% of PIP and 20% of Med Pay Benefits nor did they make a determination that the bills were not reasonable or unnecessary. The total bills submitted by Plaintiff were $665.00 and the Defendant only paid $572.32. The Plaintiff is claiming an amount of $92.68 in addition to interest and attorney fees and cost.
2. The Plaintiff believes that the issue for Court determination is whether the Defendant is entitled to receive PPO reductions without selling a PPO-PIP policy to the insured and without complying with the requirements of Fla. Stat. 627.736(10) or the Defendant must pay full benefits. It is admitted that the Defendant did not offer or sell a PPO-PIP policy to the insured nor had a contract with Plaintiff. Specifically, the Plaintiff argues that in order for the insurer to pay PPO amounts pursuant to their contracts with a middleman such as CCN, they must meet certain requirements as outlined in Sec. 10 of the Statute.
3. Florida Statute 627.736(10) states as follows:
An insurer may negotiate and enter into contracts with licensed health care providers for the benefits described in this section, referred to in this section as “preferred providers,” which shall include health care providers licensed under chapters 458, 459, 460, 461 and 463. The insurer may provide an option to an insured to use a preferred provider at the time of purchase of the policy for personal injury protection benefits, if the requirements of this subsection are met. If the insured elects to use a provider who is not a preferred provider, whether the insured purchased a preferred provider policy or a nonpreferred provider policy, the medical benefits provided by the insurer shall be as required by this section. If the insured elects to use a provider who is a preferred provider, the insurer may pay medical benefits in excess of the benefits required by this section and may waive or lower the amount of any deductible that applies to such medical benefits. If the insurer offers a preferred provider policy to a policy-holder or applicant, it must also offer a nonpreferred provider policy. The insurer shall provide each policy-holder with a current roster of preferred providers in the county in which the insured resides at the time of purchase of such policy, and shall make such list available for public inspection during regular business hours at the principal office of the insurer within the state.
4. The Defendant believes they may pay bills at PPO rates even though the insurance company had not complied with the requirements of Fla. Stat. 627.736(10). The Defendant argues the statute is permissive in nature because it uses the word “may” when it refers to contracts and other acts. Therefore the company does not have to offer its insured a choice of a PPO or a non-PPO policy at the time the policy is sold in order to enforce private contracts between the company, the middleman (CCN), and/or the medical provider. The Defendant also believes the Plaintiff’s Motion should fail because the Defendant possesses the constitutional right of freedom to contract and further the Department of Insurance has issued a memorandum in the Defendant’s favor.
As to the argument of freedom to contract, the Defendant believes courts should be guided by the rule of extreme caution when called upon to declare transactions void, as contrary to public policy. As to the memorandum of the Florida Department of Insurance it is argued that the Department has issued an opinion finding that subsection (10) of the statute is not the exclusive means by which the insured is entitled to PPO reductions.
5. The Plaintiff submitted interrogatories to the Defendant regarding the compliance by the Defendant with the conditions of Subsection (10). One interrogatory stated as follows: Nationwide Mutual Insurance Company did not have a “preferred provider policy” of automobile insurance available to potential insured on the date when Benjamin Kyler (the insured) undertook the policy, which is the subject matter of this cause. The Defendant admitted it did not have such an agreement. In further interrogatories the Defendant admitted that they did not have a contract in effect when the insured sustained the injury with the Plaintiff which the Defendant relied on to support the reduction of the bills submitted by the Plaintiff for the care of the insured. The Defendant also admitted it did not have a written contract between itself and the Plaintiff relating to the reduction of medical bills submitted by the Plaintiff for the injuries sustained, and the only contract was the one between Defendant and CCN.
6. The Court finds the arguments of the Defendant are without merit. Section 10 of Florida Statute 627.736 clearly states the conditions that an insured may use preferred providers. They are 1) The insurer may provide an option to an insured to use a preferred provider at the time of purchase of the policy for PIP benefits. 2) The insured has a right to make an election as to selection of a provider; either preferred or not. 3) If election is made by the insured picking a preferred provider, the insurer must also offer a nonpreferred provider policy. 4) The insurer shall provide a roster of preferred providers in the county of which the insured resides for inspection. A review of the history of the Statute indicates that these elections are to be made at the time the policy is purchased. It is undisputed that in this case, the Plaintiff had not entered into a contract with the Defendant nor that the insured did not have the opportunity or was offered or purchased a PPO policy. After a review of all documents and discovery it is clear that the Defendant did not comply with the Statute.
In case of Lester N. Levine, D.C. d/b/a Deltona Advance Wellness Medical Center a/s/o Jessica Evans vs. Progressive Express Insurance Company (Volusia County, 2001-11458 CODL), Sept. 4, 2002, the Court said “It is only upon the insured’s election that the insurer can benefit from its contract with a licensed health care provider.” In Fishman and Stashak, M.D.’s, P.A. d/b/a Gold Coast Orthopedics v. Progressive Dayside Insurance Company, Broward County Case No. 11729 [9 Fla. L. Weekly Supp. 64a], the Court in granting the Plaintiff’s Motion for Summary Judgment said, “to rule otherwise Would allow the insurance company to do an end around the No Fault Statute and avoid giving the insured discounts on policies with PPO endorsements yet make payments to the health care provider at lower PPO rates.
7. The Courts further rejects the Defendant’s argument that the Department of Insurance testimony merits deference. Their argument is that the testimony of a senior executive attorney for the Department of Insurance was taken and had issued an opinion that Subsection (10) of the No-Fault statute is not the exclusive means by which an insured is entitled to PPO reductions. In David W. Ice v. Progressive Bayside Insurance Company, Broward county case 98-12491 COCE 53, Dec. 12, 2000, [8 Fla. L. Weekly Supp. 262a] the Court rendered an opinion that “any agreement or arrangement that the Defendant had with the Florida Department of Insurance which allowed the Defendant to pay PPO rates to or on behalf of an insured who did not elect to purchase a PPO PIP policy, goes directly against the statutory mandate and the argument that this Court give deference to what the Department says or does in terms of interpretation of the Statute is unavailing here.
8. The Court also rejects the Defendant’s argument that Subsection (10) does not apply because the word “may” at the beginning allows PIP insurers to create their own managed care network and issue PPO policies, and that Florida Statute 627.736(1) is an entirely permissive statute and that it was not the intention of the legislature to prohibit voluntary PPO subscriptions with third parties. The more persuasive argument which the Court accepts is that while the Statute may be permissive, it is permissive only to the extent that PIP insurers are not required to sell a PPO policy. However, if the insurer provides a PPO arrangement it must follow the requirements of F.S. 627.763(1). See Page 26, Amicus Curiae Brief, Florida Hospital Association and Florida Orthopedic Society, case no: 2D01-5714 and case no. 2D02-871, 2d Dist. Ct. of App.
9. The Court further is not persuaded by the additional argument submitted by the Defendant that the United States and Florida Constitutions guarantee freedom of contract and that Florida Statute 627.736(10) is a permissive statute rather than a prohibitive statute, and does not limit any right to contract. While the Defendant may enter into contractual agreements with third parties such as CCN, they do so at peril if they fail to comply with the provisions of the Insurance Code and applicable Florida Statutes. As already stated, the Court does not accept that the Statute is permissive to such an extent to allow the Insurer to contract with a third party such as CCN and avoid the provisions of the insurance code.
10. The Court in conclusion finds that Fla. Stat. 627.736(10) to be the specific Statute to be used for insurers to offer PPO coverage under a preferred provider policy and the Defendant has not met the requirements of Section (10) of Fla. Stat. 627.736 as it did not offer or sell to the insured a PPO Policy or comply with all other provisions of the statute such as providing the policyholder with a current roster or provide any of the options to its insured at the time of purchase of the policy. Therefore, it is
ORDERED AND ADUDGED AS FOLLOWS:
Plaintiff’s Motion for Partial Summary Judgment, based upon the lack of genuine issues of material fact is hereby granted as a matter of law as it relates to Count I of Plaintiff’s Complaint and the Court reserves jurisdiction to award reasonable attorney fees and cost.
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