23 Fla. L. Weekly Supp. 851b
Online Reference: FLWSUPP 2308LEWIInsurance — Personal injury protection — Coverage — Medical expenses — Reasonableness of charges — Insurer that breached contract by utilizing statutory fee schedule which was not incorporated in policy when processing medical provider’s bill is not entitled to challenge reasonableness of MRI charge — Even if insurer could challenge reasonableness of charge, opposing affidavit filed by insurer does not preclude summary judgment in favor of provider on reasonableness issue where affidavit fails to establish that affiant has any first-hand knowledge of MRI charges in county where services were rendered — Insurer that paid claim without disputing relatedness or necessity of MRI may not thereafter challenge relatedness and necessity
PAN AM DIAGNOSTIC SERVICES, INC. d/b/a Wide Open MRI (a/a/o Jermaine Lewis), Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 13-3485 SP 23 (1). January 7, 2016. Myriam Lehr, Judge. Counsel: Yigal D. Kahana, Kahanalaw, PA, North Miami, for Plaintiff. Alexandria Sanchez, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FORFINAL SUMMARY JUDGMENTAND ENTRY OF FINAL JUDGMENT
This matter came before the Court on October 26, 2015, on the Plaintiff’s motion for Final Summary Judgment. After careful consideration of argument of counsel, and having reviewed the evidence and case law and being fully advised in the premises, the Court GRANTS the Plaintiffs Motion for Summary Judgment, finding as follows:Findings of fact
The Defendant made a benefits payment of $1773.04 in January 2013 to Plaintiff, for two MRI exams — CPT Codes 72141 and 72148 — rendered to Jermaine Lewis, the assignor in this case, on October 31, 2012, in Broward County, Florida. The Defendant did not contest the relatedness and necessity of the services at issue prior to making said payment. During his September 3, 2015, deposition, the Defendant’s adjuster, Tim Kelly, stated that the Defendant was not disputing relatedness and necessity “at this time” (P. 7). Mr. Kelly also stated (P.8) that the Defendant had ordered a medical examination of Mr. Lewis, but the report from that examination did not opine as to the relatedness and necessity of the services at issue, and the Defendant did not order any examination or report regarding the services at issue. Mr. Kelly stated (P. 9-12) that the Defendant made payment to Plaintiff for 200% of the Medicare Part B fee schedule for the services at issue, and admitted that Defendant had no evidence it considered any other factors when deciding what a reasonable charge was for the services at issue. The Defendant’s policy of insurance elected the “reasonableness” method under 627.736(5)(a)(1) (2012), and Defendant is not claiming that its policy elected the “Medicare fee schedule method of reimbursement” under FS 627.736(5)(a)(2) (2012). The Defendant’s explanation of review states: “The payment for this service is based upon 200% of the Participating Level of Medicare Part B fee schedule for the locale in which the services were rendered.”
The Plaintiff filed the affidavit of Mrs. Roberta Kahana to show that the Plaintiff’s charge was reasonable. Plaintiff has met its burden of establishing that its charge in this case was reasonable for the MRI exam it performed. The Defendant filed the affidavit of Dr. Michael Propper stating that Plaintiff’s charge was not reasonable. The Defendant also filed the affidavit of Dr. Bradley Simon, stating that the services at issue were not related and not medically necessary.
Analysis and Findings of law: Reasonableness:
The affidavit of Roberta Kahana shows a substantial connection with Broward County, Florida and has provided sufficient evidence of first hand knowledge that the Plaintiff’s charge was reasonable for the services at issue. The Court finds that Plaintiff has met its prima facie burden. Further, this Court holds that since the Defendant utilized the 200% of Medicare Part B method of reimbursement, it may not challenge the reasonableness of the Plaintiff’s charge. New Smyrna Imaging v. State Farm 22 Fla. L. Weekly Supp. 722a (County 7, 2014). The Court wrote in Florida Hospital & Medical Center v. Progressive, 22 Fla. L. Weekly Supp. 1164b (County 9, April 22, 2015):
“It is logical to conclude that (4)(b) was and remains applicable to claims that are processed using the fact dependent reasonableness methodology of FS 627.736(5)(a)(1). It is not logical to apply 4(b) in the context of this present case, where Defendant admittedly utilized, albeit improperly, the Schedule of Maximum Charges, which legislative history tells us was designed to eliminate reasonableness litigation altogether.”
“3. In determining whether a charge for a particular service or treatment is reasonable, there are two (2) methods by which an insurer may calculate reimbursement methods: 1) is the fact dependent method under 627.736(5)(a)1. (2009) and 2) utilizes the permissive Schedule of Maximum charges under 627.736(5)(a)(2) (2010). These methods have been described as separate and distinct methods for evaluating the statute’s reasonable expense coverage mandate under Fla. Stat. 627.736(1)(a). The insurer must choose the one payment methodology it will utilize for reimbursement and cannot alternate between the two methods. . .
5. . . .In other words, since Defendant did not rely upon the remaining factors within its policy of insurance when processing the Plaintiff’s bill, it cannot now fall back upon the fact dependent inquiry to determine reasonableness of the charge. Defendant unilaterally determined “reasonableness” when it calculated reimbursement according to the schedule of maximum charges . . .”
Since the “Defendant unilaterally determined “reasonableness” when it calculated reimbursement according to the schedule of maximum charges,” the Defendant may not now fall back upon the fact dependent inquiry to dispute the reasonableness of the charge. Further, the Defendant adjusted the claim in this case after Kingsway Amigo Ins. Co. v. Ocean Health Inc., 36 Fla. L. Weekly D1062a (Fla. 4th DCA 2011) was decided, and after FS 627.736(5)(a)(5)(2012) was enacted, and still made payment according to the fee schedule despite not having elected it in its policy. Clearly, when it made payment in January 2013, the Defendant did not have the “reasonable proof” required by FS 627.736(4)(b) (2012) in order to deny the reasonableness of the instant claim. The Plaintiff’s bill became overdue thirty days after the Defendant received it, because the Defendant never had reasonable proof to support a reduction. When benefits became overdue, they accrued to Plaintiff as of the date the bill was originally submitted. See Progressive Express v. So. Fla. Institute of Medicine, Inc. a/a/o Halil Hawkeye, 14 Fla. L. Weekly Supp. 520a (App. 11, April 2007). Here, the Defendant processed Plaintiff’s bill according to the “200% of 2007 Medicare Part B physicians fee schedule” methodology even though the Defendant’s policy did not elect fee schedule, and despite the fact that the Kingsway decision had already been issued. Further fact-dependent inquiry is irrelevant where the Defendant unilaterally determined reasonableness, contrary to binding authority, by making payment based on the Medicare fee schedule methodology.
Even assuming, arguendo, that Defendant could dispute reasonableness at this late stage, Dr. Propper’s affidavit fails to show any nexus to Broward County, Florida, and fails to establish that he has any experience or qualifications in the geographic region in which the services at issue were rendered, Broward County. Dr. Propper provided no evidence of having firsthand knowledge of MRI charges in Broward County. As such, Dr. Propper’s affidavit fails to meet the requirements of admissibility. His opinion is not based upon sufficient facts or data, is not the product of reliable principles and methods, he did not apply any principles and methods reliably to the facts of this case, and he based his opinion on hearsay, not firsthand knowledge. This court finds that there is no admissible evidence to create a triable issue that the charged amount was unreasonable. Dr. Propper’s testimony is not “based upon sufficient facts or data,” and is not the “product of reliable principles and methods,” as required by Florida Statutes §90.702 (2013). For the reasons stated above, Defendant has not come forward with any admissible evidence demonstrating that the Plaintiffs charge for the MRI provided to the assignor was unreasonable.
Relatedness and necessity:
The Defendant made payment, and did not dispute relatedness and necessity before Plaintiff filed suit. The Defendant admitted that it did not investigate the relatedness and necessity of the services at issue before making payment, or at any time before September 3, 2015, when the Defendant also admitted that it had no evidence to show that the services at issue were unrelated or medically unnecessary, and stated that it was not disputing relatedness and necessity. On October 19, 2015, the Defendant filed the affidavit of Dr. Bradley Simon, stating that the services at issue were not related or necessary.
The evidence demonstrates that when it made payment for the services at issue in January 2013, the Defendant did not have the “reasonable proof” required to deny relatedness and necessity. In Donald Lowery D.C. v. Progressive, 16 Fla. L. Weekly Supp. 755a (County 4, 2008), the Court held that FS 627.736(4)(b) permits the insurer that made payment according to the reasonableness method to challenge the “amount of the charge” at any time, but not to challenge relatedness and necessity at any time. That is consistent with the opinions in United Auto. Ins. Co. v. Viles, 726 So. 2d 320 (Fla. 3 DCA 1998) [24 Fla. L. Weekly D14a], United Auto Ins. Co. v. Santa Fe Medical Center, 34 Fla. L. Weekly D205lb (Fla. 3 DCA 2009), and Florida Medical & Injury Center Inc. v. Progressive, 35 Fla. L. Weekly D215b (Fla. 5 DCA 2010). In Florida Medical & Injury, the 5th DCA cited Lowery, stating:
“The previously cited Lowery opinion on the Duval County Court at some length refutes this [Defendant’s] argument using a grammatical analysis of the language of the statute, applying the rules of statutory construction and reading subsection 4(b) in pari materia with the remainder of the statute. The Lowery court concluded, and we agree, that this sentence does not allow the insurer unlimited time to assert that the claim was generally in violation of subsection (5); rather, this provision is limited to a claim that “the amount of the charge was in excess of that permitted” in subsection 5.” (At p. 8 of the opinion)
Insurers do not have carte blanche to just dispute relatedness and necessity at any time, but must also comply with the rest of Florida law. While the Plaintiff generally has the burden of proof in a PIP lawsuit, reading FS 627.736 in pari materia with Florida’s other insurance statutes, that burden has been met. The Defendant decided that the service at issue was related and necessary, under FSS 627.736(1)(i)3 and 627.736(4)(b), when it approved and paid the claim without notifying Plaintiff that it was disputing the claim. See United Auto. Ins. Co. v. Adriana Amador, 15 Fla. L. Weekly Supp. 320a (11th App., 2008). As a matter of law, the Defendant may not now withdraw its affirmation of coverage, and deny relatedness and necessity, In Glenn V. Quintana, D.C., P.A. a/a/o Melissa Evans v. State Farm Mutual Automobile Ins. Co., 19 Fla. L. Weekly Supp. 882a (County 11, 2012) the Court wrote:
“For Defendant to suggest, retroactively that some of the bills that it had already paid (and in effect, affirmed coverage for) are not now covered because they were unnecessary, would violate this provision of the bad faith statutes, and has been deemed an unfair trade practice by our legislature.”
In MRI Services, Inc. v. Star Casualty Insurance Co., FLWSUPP 2207TROD, (County 17, Jan. 2015) [22 Fla. L. Weekly Supp. 856b], the Court held:
“It is this Court’s opinion that when the legislature created 627.736(4)(b), that they did not intend for insurers to be able to retroactively deny previously paid bills, merely to defend a lawsuit on other grounds. . . . .627.736(4)(b) must be read in the context of the insurance statutes. Notably, Fla. Stat. 626.9541. . . .The Court seriously doubts that, but or the instant litigation, the Defendant would have inquired into the necessity or relatedness of the MRIs it paid. To wait until suit is filed, and for no other reason than because suit is filed, violates the carrier’s obligation of good faith and fair dealing; to put it more simply, its action amounts to bad faith.”
For the foregoing reasons, the Court holds that, as a matter of law on the circumstances of this case, the Defendant has already affirmed coverage, including relatedness and necessity.
ACCORDINGLY, it is hereby:
ORDERED AND ADJUDGED that Plaintiff’s Motion for Final Summary Judgment is GRANTED. Final Judgment be and the same is hereby entered in favor of the Plaintiff, PAN AM DIAGNOSTIC SERVICES INC., d/b/a Wide Open MRI, as assignee of Jermaine Lewis, against the Defendant, State Farm Mutual Automobile Insurance Company, whose address is One State Farm Plaza, Bloomington, IL 61710, in the total amount of $1666.96 ($2,150×2 = $4300 @ 80% = $3440.00, less prior payment of $1776.04 = $1666.96), plus applicable prejudgment and post judgment interest, for which let execution issue forthwith.
The Court hereby expressly reserves jurisdiction of those issues related to prevailing party attorney’s fees and costs in favor of Plaintiff.