26 Fla. L. Weekly Supp. 659a
Online Reference: FLWSUPP 2608CHANInsurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Gratuitous payments — Insurer’s motion for summary judgment based on exhaustion of PIP benefits is denied where medical provider filed counter-evidence tending to show that insurer paid invalid claims to other providers, adjusted other claims improperly, and handled claims in bad faith — No merit to argument that plaintiff provider does not have standing to challenge payments to other providers
LUIS E. GRAU, MD PA (a/a/o Ana Chang) Plaintiff, v. WINDHAVEN INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 16-0819 SP 21. October 11, 2018. Don S. Cohn, Judge. Counsel: Erick Evans, Patino Law Firm, Hialeah, for Plaintiff. Brittany Brooks, for Defendant.
ORDER DENYING DEFENDANT’S MOTION FORSUMMARY JUDGMENT ON BENEFITSEXHAUSTION
In this case a doctor provided treatment to Windhaven’s insured in connection with an automobile accident. The doctor sued Windhaven to recover payment of the bill under the insured’s PIP insurance policy. In response, Windhaven claimed that it paid other medical providers $10,000 worth of medical benefits, and sought summary judgment under the theory that benefits were exhausted. The Court denies the motion because the court finds that the Plaintiff filed evidence that demonstrates an issue of material fact.
The law in Florida is “[o]nce the PIP benefits are exhausted through the payment of valid claims, an insurer has no further liability on unresolved, pending claim. . .” Northwoods Sports Med. & Physical Rehab., Inc. v. State Farm Mut. Auto. Ins. Co., 137 So.3d 1049 (Fla. 4th DCA, 2014) [39 Fla. L. Weekly D491a] (e.s). While the insurance company “remains free to pay providers for charges that are untimely or otherwise submitted in express contravention of the statute, such payments should not be considered a ‘payment’ under the PIP policy.” Coral Imaging Services v. Geico Indem. Ins., 955 So.2d 11 (Fla. 3d DCA, 2006) [31 Fla. L. Weekly D2478a]. Such payments are “must be characterized as ‘gratuitous,’ and should not be considered as having been made against the limits of the PIP policy.” See also Ocean Harbor Casualty Ins. Co. v. Medical Specialist of Tampa Bay, Case No. 2011-AP-9-WS (Fla. 6th Cir. App. Ct. January 22, 2013) [26 Fla. L. Weekly Supp. 534a], where a Circuit Appellate Court found payments above the schedule of maximum charges by a Defendant was a gratuitous payment.
In this case, the Plaintiff filed counter-evidence with the Court in accordance with Fla. R. Civ. P. 1.510. The evidence tends to show that Windhaven used the insured’s limited $10,000 medical benefits to pay for invalid claims, and adjusted the claim improperly. This includes payment for multiple units of physical therapy when only one unit was allowed by law, payments for improper daily examinations under CPT code 99211, and payments for services that were not “provided, supervised, ordered, or prescribed by a physician” or other qualified medical professional in violation of Fla. Stat. 627.736(1)(a). Any one of these three types of payments would be for invalid claims, and would not count toward the $10,000. See State Farm v. Roberto-Rivera Morales, M.D. a/a/o Thomas Mayeko Coklee, 24 Fla. L. Weekly Supp. 101a (11th Circ. Appellate 2016) (“the trial court shall deduct the admittedly gratuitous payments . . . [a]ny amount remaining on the policy not exceeding the statutory limits of $10,000 shall be awarded.”) Additionally, payment of invalid claims could mean Windhaven has acted in bad faith. The Florida Supreme Court recently rejected the notion that simple negligence is not bad faith, finding that “negligence is relevant to the question of good faith.” See Harvey v. GEICO, SC17-85 (Fla. 2018) [43 Fla. L. Weekly S375a]. Either bad faith claims handling or payment of invalid claims would be sufficient to defeat the exhaustion defense. The Plaintiff has shown the possibility of both, and summary judgment must be denied.
The Court rejects Windhaven’s argument that the Plaintiff lacks standing to argue Windhaven paid invalid claims. See cf, Susanti K. Chowdhury MD PA a/a/o Angela Hammel v. Progressive American Insurance Company, (Pinellas Cty. Ct. Judge Kathleen Messinger, Oct. 10, 2016). This is because “[s]tanding is a legal concept that requires a would-be litigant to demonstrate that he or she reasonably expects to be affected by the outcome of the proceedings, either directly or indirectly.” Hayes v. Guardianship of Thompson, 952 So.2d 498, 505 (Fla. 2006) [31 Fla. L. Weekly S763a]. The Plaintiff obviously has standing. If Windhaven paid invalid claims to other providers, there is money left over on the policy for payment of the Plaintiff’s claims. The Third District Court of appeal has already recognized a party’s right to challenge other medical providers’ bills in gratuitous payment/exhaustion cases. Otherwise the Coral Imaging medical provider would not have had standing in its eponymous Third District decision.
The Court also rejects Windhaven’s argument that Coral Imaging should be limited to payment of a late bill only. All of the cases Windhaven cites require payment of valid medical bills, including Northwoods and others. See GEICO Indem. Co. v. Gables Ins. Recovery, Inc., 159 So.3d 151, 155 (Fla. 4th DCA, 2014) [39 Fla. L. Weekly D2561a] (“Once the PIP benefits are exhausted through the payment of valid claims, an insurer has no further liability on unresolved, pending claims ”, finding that “every medical provider GEICO paid . . . was entitled to payment and all the claims paid were timely.”) (e.s). While bad faith is required for payment of more than $10,000 of valid claims, invalid claims are to be subtracted from the $10,000 limits, and do not count. See Coral Imaging and Thomas Mayeko Coklee, supra.
Here the Plaintiff has pled in its reply that the Windhaven has made gratuitous payments and has acted in bad faith in its claims handling, resulting in mishandling of the insured’s limited benefits. The Plaintiff has presented evidence of that in response to the summary judgment. As such, the Court is required to DENY the Defendant’s Motion for Summary Judgment, as an issue of fact as to whether the Windhaven made improper, gratuitous payments, or acted in bad faith, must go to a jury. See Farinas v. Florida Farm Bureau, 850 So. 2d 555 (Fla. 4th DCA, 2003) [28 Fla. L. Weekly D1611b] (“whether an insurer has satisfied this [bad faith] standard is one for the jury.”)