14 Fla. L. Weekly Supp. 938a
Insurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Error to enter summary judgment in favor of medical provider where benefits were exhausted before provider that accepted reduced payment of claim filed suit and before insurer is alleged to have received notice that provider was seeking unpaid portion of bill — Further, insurer is liable for statutory interest only if insurer is ultimately found to have duty to pay claim
Cert. Denied at 33 Fla. L. Weekly D1742b
PROGRESSIVE EXPRESS INSURANCE COMPANY, Appellant, v. MILLENNIUM DIAGNOSTIC IMAGING CENTER, INC. a/a/o ALFONSO TABOADA, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 06-050 AP. L.T. Case No. 01-8053 CC 26 (04). July 19, 2007. An Appeal from the County Court for Miami-Dade County, Ada Pozo Revilla, Judge. Counsel: Douglas H. Stein, for Appellant. Richard Shuster, for Appellee.
(Before LEON M. FIRTEL, PETER R. LOPEZ, and DENNIS J. MURPHY, JJ.)
REVERSED AND REMANDED WITH INSTRUCTIONS.
(FIRTEL, Judge.) Defendant/Appellant, Progressive Express Insurance Company (Progressive), seeks review of the trial court’s Final Summary Judgment entered in favor of Appellee, Millenium Diagnostic Imaging Center, Inc. (Millenium), the medical provider of the insured, Alfonso Taboada. This case stems from a personal injury protection suit (PIP). The Appellant seeks reversal of the trial court’s Final Summary Judgment in favor of the Plaintiff, and requests that this Court enter summary judgment as a matter of law for it concerning exhaustion of benefits. A final summary judgment entered for Appellant would relieve it of its obligations under the PIP policy.
Following an automobile accident, the insured received medical care from Millenium on June 19, 2003. On June 20, 2003, the insured executed an assignment of his PIP benefits to Millenium, which duly submitted claims to Progressive for the treatment of the insured. The insured’s policy provided $8,000.00 in coverage with a $2,000.00 deductible. Appellee timely submitted bills on June 20, 2003. On or about June 30, 2003, Progressive denied the claim, disputed Millenium’s billing structure as unlawful and required more documentation. On or about July 31, 2003 Appellee stated that it submitted a demand letter disputing the denial of the bill. On or about August 14, 2003, Appellee received a reduced payment from Appellant of $1,320.00 for its initial billing of $2,000.00. On August 18, 2003, Progressive avered that benefits under the policy were exhausted. On October 14, 2003, Millenium sued Progressive for damages arising from partial payment of its claims. Progressive filed a Motion for Summary Judgment, arguing that benefits were exhausted prior to service of the complaint and that it was only required to pay to policy limits. The trial court granted an Order on Plaintiff s Motion for Partial Summary Judgment on global billing issues, rendering their initial billings with Progressive as lawful and therefore payable. On January 10, 2006, the trial court entered Final Summary Judgment for Millenium, which included interest pursuant to section 627.736(4)(c), Florida Statutes (2006), and reserved jurisdiction to award attorney’s fees and costs for Millenium.
On appeal, Progressive argues that because benefits were exhausted prior to the time Millenium filed the complaint, summary judgment should have been entered in its favor. In response, Millenium contends that the reduction of the payment amount of its bills was a legal error on the part of Progressive, rather than a result of a problem with Millenium’s billing structure (ultimately found lawful by the trial court). Thus, Millenium asserts that Progressive may not use exhaustion of benefits to relieve it of its obligation to pay the full amount of the bills, because the delay was caused by Progressive.
The Fourth District Court of Appeal addressed the exhaustion of benefits issue in Simon v. Progressive Express Insurance Co., 904 So. 2d 449 (Fla. 4th DCA 2005). In Simon, a medical provider accepted a reduced payment from Progressive for services rendered to its insured. Id. Simon subsequently resubmitted the claims at a later date seeking the balance owed. Id. Progressive informed Simon that the remaining available benefit funds were committed to another provider because he had accepted a reduced payment without advising Progressive that the claim would be resubmitted. Id. Simon argued that Progressive should not have paid other providers and that he had a priority claim to the available benefit funds. Id. The court found that Simon did not have a priority claim because he accepted partial payment and did not notify Progressive that he was amending his claim. Id. at450. The court held that absent a showing of bad faith, a provider could not be held liable for reductions after benefits were exhausted. Id.
The Simon court rejected the notion that an insurance company is required to reserve any available funds at the time a claim is submitted. Id. To require reserve funds would result in “unreasonable exposure of the insurance company and would be to the detriment of the insured and other providers with properly submitted claims.” Id. Further, any payments that were reduced or denied “would have to be held in reserve until the statute of limitations period expired or suit was filed and concluded.” Id. As a result, this would create delays in the payment of other claims and defeat the underlying policy of the PIP statute’s prompt pay provisions. Id.
Progressive is correct that it is not required to hold remaining PIP benefits in reserve funds each time claims are reduced or denied. Although Millenium states that Progressive received notice on or about July 30, 2003, there is no record evidence of the statutorily required demand letter. “As a condition precedent to filing any action for benefits . . . the insurer must be provided with written notice of an intent to initiate litigation . . . . Such notice may not be sent until a claim is overdue . . . .” Section 627.736(11), Florida Statutes (2006). As benefits were clearly exhausted before Millenium filed suit and before Progressive was alleged to have received notice, the trial court erred when it entered Final Judgment for Millenium.
Millenium further argues on appeal that even if Progressive is not liable for the reduced claims, it is entitled to statutory interest because benefits were available when it first submitted the claim. We do not agree. “[T]he penalty for overdue payments, which runs from the expiration of the thirty-day period, applies only if the insurer is ultimately found liable for the claim.” United Auto. Ins. Co. v. Rodriguez, 808 So. 2d 82, 89 (Fla. 2001) (Pariente, concurring). Appellant is correct in stating that penalties can be assessed against an insurance only after it has been established that it has a duty to pay benefits.
Consistent with Simon, we hold that absent further proceedings establishing a clear chronology of statutorily required notice, Progressive has no duty to pay benefits in excess of its contracted amount once coverage has been exhausted, and is not liable for penalties (assuming that the trial court ultimately rules in favor of Appellant).
Progressive has timely filed a motion to tax attorney’s fees and costs pursuant to sections 627.736(8) and 627.428 of the Florida Statutes, and Florida Rule of Appellate Procedure 9.400. Progressive should be awarded its appellate attorney’s fees and the determination and assessment of those fees should be remanded to the trial court. In addition, Progressive is entitled to have costs taxed in its favor by filing a proper motion with the trial court within thirty days after the issuance of the mandate in this case.
It is therefore ORDERED that the ruling of the trial court is REVERSED and the cause REMANDED to enter summary judgment for the Appellant. It is further ORDERED that Progressive’s motion for appellate attorney’s fees is GRANTED. Appellee’s motion for appellate attorney’s fees is DENIED. (MURPHY, Judge, and LOPEZ, Judge, concur.)