20 Fla. L. Weekly Supp. 689a
Online Reference: FLWSUPP 2007KARA
Insurance -- Personal injury protection -- Coverage -- Emergency services
-- Deductible -- Although insurer correctly applied deductible to full
amount of plaintiff medical provider's bill, provider has standing
to bring suit challenging calculation of deductible where insurer's
application of deductible to allowable amount of bill submitted earlier
by another provider resulted in more of deductible being applied to plaintiff
provider's bill -- Insurer's incorrect reduction of other provider's
bill by 25% before applying deductible resulted in underpayment to plaintiff
provider -- Because insurer is mandated by statute to reserve $5,000 for
emergency medical service providers, insurer should not have applied claim
filed by plaintiff provider within that classification to deductible
EMERGENCY PHYSICIANS OF CENTRAL FLORIDA, LLP, as assignee of Asmaa Karani,
Plaintiff, v. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County
Court, 9th Judicial Circuit in and for Orange County. Case No. 2011-SC-8737.
January 30, 2013. Deborah B. Ansbro, Judge. Counsel: Rutledge M. Bradford,
Bradford Cederberg, Orlando, for Plaintiff. Neil Andrews, Orlando, for
ORDER GRANTING PLAINTIFF'S
MOTION FOR PARTIAL SUMMARY JUDGMENT
AND DENYING DEFENDANT'S MOTION
FOR FINAL SUMMARY JUDGMENT
THIS MATTER having come before the Court on Plaintiff's Motion for
Partial Summary Judgment and Defendant's Motion for Final Summary
Judgment and the Court having reviewed the file, having heard arguments
of counsel, and being otherwise fully advised in the premises, renders
the following ruling:
Two Issues Before the Court
This Personal Injury Protection (PIP) lawsuit centers on two issues. The
first issue is the manner in which an elected deductible is to be applied
to invoices/bills submitted under PIP. As to this first issue, Plaintiff
contends that, pursuant to Fla. Stat 627.739(2), an elected deductible
is to be applied to 100% of the expenses and losses submitted, prior to
reducing the expense or loss to a fee schedule sum, irrespective of whether
a policy has clearly and unambiguously elected the permissive fee schedule
reimbursement methodology permitted in Fla. Stat. 627.736(5). On the other
hand, Defendant contends that the expenses and losses are to be reduced
to a fee schedule amount before an elected deductible is applied.
Additionally, Defendant contends that Plaintiff has no standing to bring
this claim because its invoice/bill was properly applied to the deductible
and, therefore, Plaintiff has sustained no damage. Defendant also contends
that Plaintiff has no standing to challenge an incorrect calculation of
an invoice/bill submitted and/or owed to a provider other than Plaintiff,
despite the fact the calculation directly affects Plaintiff's alleged damages.
The second issue is whether an elected deductible may be applied to invoices/bills
submitted by a protected class of providers for whom the legislature,
through statutory amendments in 2008, created a special reserve in Fla.
Stat. §627.736(4)(c). The protected class of providers covered by
the 2008 amendment includes providers of emergency services and care.
Plaintiff argues that this protected class of providers' charges,
if timely submitted in accordance with section (4)(c), must be set aside
as part of the $5,000.00 reserve and may not be used to satisfy the deductible.
Plaintiff argues that once the deductible has been met by invoices/bills
submitted by providers that are not protected by section (4)(c), the protected
class of providers' charges are then paid out of the reserve set forth
in section (4)(c). On the other hand, Defendant argues that it is permitted
to apply invoices/bills that fall within the protected class of providers
under section (4)(c) to an elected deductible pursuant to Fla. Stat. 627.739.
As to this second issue, Defendant contends that Plaintiff is, in essence,
seeking to be paid, regardless of an unsatisfied deductible. However,
Plaintiff denies that such is the basis of its argument, and agrees that
the protected class of provider -- those rendering emergency services
and care -- is not entitled to payment prior to the deductible being satisfied
by payment of invoices/bills submitted by providers other than those encompassed
within the protected class of emergency services/care providers.
STIPULATED FINDINGS OF FACT
The parties entered a stipulation of undisputed facts and admissible evidence,
and the Court adopts the stipulated facts, which are as follows:
1. Plaintiff filed a PIP suit, as assignee of Asmaa Karani ("Karani"),
against Defendant seeking PIP benefits for services provided to Karani
on August 15, 2011, as a result of injuries Karani allegedly sustained
in an automobile accident which occurred on August 15, 2011.
2. Defendant received notice of the incident/loss on August 15, 2011.
3. Karani was insured under a PIP policy of insurance issued by Defendant.
The policy was in full force and effect on the date of the accident and
carried a $10,000.00 limit with a $1,000.00 deductible and no medical
4. Karani sought care and/or treatment from several medical providers,
including Plaintiff, as a result of injuries allegedly sustained in the
motor vehicle accident.
5. Plaintiff is an emergency room physician group licensed under Chapters
458 and 459, and provided emergency services and care to Karani as defined
by Florida Statute §395.002(9).
6. A review of the PIP payout log, entitled "Medical Payments Details,"
establishes that the first invoice/bill received by Defendant was from
Orlando Health, Inc., the second invoice/bill received by Defendant was
Plaintiff's invoice/bill, and the third invoice/bill received by Defendant
was from Altamonte Springs Diagnostic, Inc.
6. The first invoice/bill was received by Defendant on August 29, 2011,
from Orlando Health, Inc. for services rendered on August 15, 2011. Defendant
applied this invoice/bill against Karani's $1,000.00 deductible on
August 31, 2011.
7. The second invoice/bill was received by Defendant on August 31, 2011,
for emergency services and care rendered by Plaintiff to Karani on August
15, 2011, in the amount of $446.00. Defendant allowed the full amount
of the invoice/bill of $446.00 and applied that amount to Karani's
$1,000.00 deductible on September 9, 2011. Plaintiff's invoice/bill
was received within thirty (30) days of the date the Defendant received
notice of the loss.
8. On September 1, 2011, Defendant received the third invoice/bill from
Altamonte Springs Diagnostic, Imaging, Inc. in the amount of $1,296.86.
The remaining deductible of $26.75 was applied to this invoice/bill on
September 9, 2011.
9. Thus, Defendant applied the majority of Karani's $1,000.00 deductible
to the invoices/bills received from Orlando Health, Inc. and from Plaintiff,
as those were the first and second invoices/bills actually received by
10. Exhibits stipulated to by the parties as admissible include:
a. Copy of the declarations page and policy;
b. PIP payout log entitled "Medical Payments Details";
c. Explanation of Benefits for the Orlando Health invoice/bill;
d. Explanation of Benefits for the Plaintiffs invoice/bill; and
e. Explanation of Benefits for Altamonte Springs Diagnostic Imaging.
Subsequent invoices/bills received by Defendant from other providers (after
receipt of the first three invoices/bills addressed above) are not material
to the issues currently before the Court.
11. A review of the Explanation of Benefits for the Orlando Health invoice/bill
evidences that Orlando Health invoiced Defendant in the amount of $703.00,
that Defendant reduced the allowable amount of the invoice/bill by $175.75
to $527.25, and applied the allowed amount of $527.25 to Karani's
$1,000.00 deductible on August 31, 2011.
13. A review of the Explanation of Benefits for the Altamonte Springs Diagnostic
invoice/bill shows that Altamonte Springs Diagnostic invoiced Defendant
in the amount off $1,296.86, which Defendant reduced to $1,006.02, and
applied $26.75 to the insured's remaining deductible balance, thereby
satisfying the deductible in full.
CONCLUSIONS OF LAW AND RULING
Calculation of the Deductible.
In response to a legislative finding that the $10,000 PIP coverage was
not in line with the rate of inflation [Final Report of Select Committee
on Automobile Insurance/PIP Reform: S. 40-5, 5th Sess., at 3 (2003)],
the 2003 Legislature reduced the required deductible and amended F.S.
§627.739 to provide in relevant part as follows:
627.739 Personal injury protection; optional limitations; deductibles. --
(2) Insurers shall offer to each applicant and to each policyholder, upon
the renewal of an existing policy, deductibles, in amounts of $250, $500,
and $1,000. The deductible amount must be applied to 100 percent of the
expenses and losses described in s. 627.736. After the deductible is met,
each insured is eligible to receive up to $10,000 in total benefits described
in s. 627.736(1). However, this subsection shall not be applied to reduce
the amount of any benefits received in accordance with s. 627.736(1)(c).
Defendant, by its own admission, reduced Orlando Health's invoice/bill
for date of service of August 15, 2011, from $703.00 to $527.25; a reduction
of $175.75. Defendant did this by taking 75% of the usual and customary
charge (a permissive fee schedule sum) submitted by Orlando Health and
applying the fee schedule to that invoice/bill, which was received prior
to receipt of Plaintiff's invoice/bill. Defendant then applied Karani's
$1,000.00 PIP deductible to the reduced invoice/bill ($1,000.00 - $527.25
= $472.75). This resulted in the balance of the deductible being larger
than it would have been, had the deductible been applied to 100% of the
expenses and losses, resulting in Plaintiff's invoice/bill, as the
next successive invoice/bill received by Defendant, to be subsumed entirely
by the deductible.
When interpreting a statute, courts are required to apply plain meaning
to the language used as applicable to the circumstances presented to the
court. Saleeby v. Rock Elson Const., Inc., 3 So. 3d 1078, 1082 (Fla. 2009)
[34 Fla. L. Weekly S106a]. Where the language used is clear, unequivocal
and not subject to reasonable differences as to its meaning, there is
no occasion to employ other rules of statutory construction. Vreuls v.
Progressive Employer Services, 881 So. 2d 688, 690 (Fla. 1st DCA 2004)
[29 Fla. L. Weekly D1990b]. In reaching its decision in this matter, this
court finds that the language of Fla. Stat. §627.739(2) is clear
and unequivocal as to its intent, specifically, that: "The deductible
amount must be applied to 100 percent of the expenses and losses described
in s. 627.736." Thus, this statute, as written, shall be applied
to the facts presented in this matter without resort to alternative maxims
of statutory construction.
First, this court rejects Defendant's argument that Plaintiff lacks
standing to bring this suit because its invoice/bill was properly applied
to the deductible and, therefore, Plaintiff has suffered no damages. In
fact, the stipulated evidence clearly shows, and this lawsuit was filed
exclusively for the reason, that Plaintiff has sustained damages in this
matter. Likewise, this Court finds Defendant's second argument as
to Plaintiff's lack of standing equally unpersuasive. Under the facts
of this matter, Plaintiff possesses standing to challenge the manner of
Defendant's calculation of the deductible, which calculation as performed
resulted in a detriment to Plaintiff's detriment.
The Court finds that Defendant improperly reduced the Orlando Health invoice/bill
by 25%, before applying that invoice/bill toward the deductible. This
is in derogation of Sections 627.736 and 627.739 and resulted in an underpayment
of $119.20 due and owing to Plaintiff, for which Plaintiff is entitled
to summary judgment. See generally, Flagler Hospital, Inc. a/a/o Devin
Sapp v. Peak Prop. & Cas. Ins. Co., 18 Fla. L. Weekly Supp. 597a (Cty.
Ct., St. Johns County 2011); Flagler Hospital, Inc. a/a/o Jody C. Rigdon
v. Progressive Select Ins. Co., 18 Fla. L. Weekly Supp. 620c (Cty. Ct.,
St. Johns County 2011); and New Smyrna Imaging, LLC. a/a/o Megan McClanahan
v. Garrison Property and Casualty Insurance Company, (Fla. 18th Judicial
Circuit Seminole County Court case number 2011-SC-1593) [20 Fla. L. Weekly
Supp. 77a]. Based on the findings set forth herein, Defendant's Motion
for Final Summary Judgment on the issue of standing is Denied.
Whether a Deductible May be Applied to Invoices/Bills Submitted by a Special
Class of Providers for Whom the Legislature Created a Reserve in Fla.
Stat. §627.736(4)(c) in 2008.
On January 1, 2008, the Florida Legislature enacted a revised PIP statute
which created a mandatory reservation of $5,000.00 of the $10,000.00 PIP
benefit, from which payment must be made for invoices/bills submitted
within a specified timeframe by a special class of provider -- specifically,
emergency care providers.2 Florida Statute §627.736(4)(c) provides
Upon receiving notice of an accident that is potentially covered by personal
injury protection benefits, the insurer must reserve $5,000 of personal
injury protection benefits for payment to physicians licensed under chapter
458 or chapter 459 or dentists licensed under chapter 466 who provide
emergency services and care, as defined in s. 395.002(9), or who provide
hospital inpatient care. The amount required to be held in reserve may
be used only to pay claims from such physicians or dentists until 30 days
after the date the insurer receives notice of the accident. After the
30-day period, any amount of the reserve for which the insurer has not
received notice of a claim from a physician or dentist who provided emergency
services and care or who provided hospital inpatient care may then be
used by the insurer to pay other claims. The time periods specified in
paragraph (b) for required payment of personal injury protection benefits
shall be tolled for the period of time that an insurer is required by
this paragraph to hold payment of a claim that is not from a physician
or dentist who provided emergency services and care or who provided hospital
inpatient care to the extent that the personal injury protection benefits
not held in reserve are insufficient to pay the claim. This paragraph
does not require an insurer to establish a claim reserve for insurance
Plaintiff contends that, as a member of the specially created and protected
class of providers created under Section 627.736(4)(c), its invoice/bill
should not be applied towards the deductible, but, instead, must be reserved
for payment following satisfaction of the deductible following payment
of invoices/bills submitted by unprotected providers. In other words,
Plaintiff contends that its invoice/bill should have been paid in full.
Defendant, in reliance upon Section 627.739(2), argues that unless the
deductible has been satisfied, no benefits are available for payment to
any provider, regardless of whether emergency care provider or otherwise.
Defendant argues there is nothing in Subsection (4)(c) that suggests that
the invoices/bills of emergency care providers are exempted from the deductible.
On the other hand, Plaintiff asserts that to allow the invoices/bills
of emergency care providers to be applied to the deductible would effectively
render 627.736(4)(c) meaningless. While Plaintiff agrees that the deductible
must be satisfied before any expenses are paid out, Plaintiff argument
is that the reserve is intended to protect the emergency care providers
from having their invoices/bills applied toward the deductible in order
to maximize payment under PIP benefits.
On this issue, the court finds the relevant statutory provisions ambiguous
and, therefore, reads sections 627.736(4)(c) and 627.739(2) in pari materia.
This court believes to read the relevant statutory provisions otherwise
would result in an unreasonable outcome, which is clearly not the intent
of the Legislature. By reading the two statutory provisions in pari materia,
this Court believes the interpretation reached provides a reasonable and
In reaching its decision, this Court makes specific note of the fact that
Section 627.739 was amended in 2003, followed by amendment in 2008 to
Section 627.736 to add subsection (4)(c). This court believes that the
subsequent amendment of Section 627.736(4)(c) demonstrates the Legislature's
intent to provide an additional level of protection for emergency care
providers, thus ensuring payment of their invoices/bills. Conversely,
to accept Defendant's argument would render Section (4)(c) meaningless.
There is no logical interpretation of Section (4)(c), (which requires
providers of emergency services to submit their invoice/invoices/bills
within thirty (30) days in order to gain the protection of the protected
class), that would lead this Court to find that the Plaintiff's invoice/bill
is not protected by a reservation and should not be first applied to the
deductible. In fact, had Plaintiff waited more than 30 days to submit
its invoice/bill, in hopes of avoiding the deductible, the Plaintiff would
have lost its standing to qualify as a member of the protected class.
For the court to find Legislative intent in such a penalty would be absurd.
Here, the Plaintiff complied with the conditions of section (4)(c), thereby
qualifying as a member of the protected class, and yet was unpaid because
its invoiced amount was applied towards the deductible. It is illogical
to suggest the Florida Legislature created a special class, provided for
a special fund to be set aside for payment to that special class, set
a specific time frame during which the special class member is to submit
qualifying invoices/bills -- then penalize the special class member for
the timely submission of its claim by allowing it to be applied to the
deductible and thus go unpaid.
Plaintiff's argument that non protected providers' invoices/bills
would have sufficiently satisfied the deductible is well reasoned. Neither
the Orlando Health nor Altamonte Springs Diagnostic qualified as members
of the protected class established by Section §627.736(4)(c). The
invoices/bills of those two non-protected providers' should have been
applied towards the deductible, thereby allowing payment in full to Plaintiff
as intended under Section § 627.737(4)(c). See, Emergency Physicians
of Central Florida, LLP, a/a/o Oriol Saintilma v. Direct General Insurance
Company, (Fla. 18th Judicial Circuit Seminole County Court case number
2011-SC-2170) [19 Fla. L. Weekly Supp. 948a]; Emergency Physicians of
Central Florida, LLP, a/a/o Tina Watts v. Direct General Insurance Company,
(Fla. 18th Judicial Circuit Seminole County Court Case number 2011-50-2288)
[19 Fla. L. Weekly Supp. 947a]; and Orthopaedic Clinic of Daytona Beach,
P.A. a/a/o Charles Murray v. State Farm Mutual Automobile Insurance Company,
17 Fla. L. Weekly Supp. 1145a (Fla. 7th Jud. Cir. 2010).4
In conclusion, this Court agrees with Plaintiff and grants Plaintiffs Motion
for Partial Summary Judgment. By so ruling, this Court finds that PIP
insurers are required to reserve $5,000 of the PIP benefit exclusively
for payment to the protected class defined in Section 627.736(4)(c) and
that the $5,000 reserve may be used only to pay the claims of the protected
class of providers who timely submit the claim(s), and may not apply the
amount of such claim(s) towards any applicable deductible. The Court finds
that the deductible must be satisfied by application of the invoices/bills
submitted to the insurer by non-protected providers, and upon satisfaction
of the deductible in such manner, then the protected provider is entitled
to have its invoice/bill paid.
1The pre-2003 statute, inter alia, allowed deductibles up to $2,000.00,
allowed deductibles to reduce the total amount of benefits available under
PIP, and allowed deductibles to be applied only to that portion of the
invoice/bill for which PIP was responsible.
2Prior to January 1, 2008, Florida's PIP statute did not contain provisions
giving preference/priority to any particular class of provider. All providers
were on equal footing and invoices/bills were processed and/or paid in
the order in which they were received, in accordance with the English
Rule of priorities. Boulevard Nat'l Bank of Miami v. Air Metal Industries,
Inc., 174 So. 2d 559 (Fla. 3rd DCA 1965). Several judicial rulings were
published reiterating time and again that there was no right to have funds
set aside or reserved for payment to any particular provider or class
of providers. See Simon a/a/o Hon v. Progressive Express Insurance Company,
904 So. 2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b].
3The subsection is designed to ensure that front line providers of emergency
care, such as Plaintiff, receive payment from the special reserve for
the services they render, so long as their invoice/bill is received within
thirty (30) days of Defendant receiving notice of the incident/accident.
The Federal EMTALA law and Florida's Access to Care Law both indicate
the rationale for the Legislature's 2003 initiative, as follows:
Providers of emergency services and care are mandated to see and treat
any person who presents with an emergency medical condition, without regard
to the person's ability to pay. A patient will not, and, in fact,
cannot, be denied treatment/services by these front line providers. As
a result of these State and Federal mandates, these front line providers
often provide care and treatment to persons who possess no ability to
pay for the care and services rendered. In passing the 2003 amendment,
Florida's Legislature recognized that the front line emergency care
providers, who are not provided the protection of other laws as are hospitals,
and, therefore, developed a mechanism through which the emergency care
providers gained favorable access to payment under PIP benefits.
4In both Watts and Saintilma, the patients received medical treatment from
emergency room physicians for injuries sustained in motor vehicle accidents.
Furthermore, in both cases, the insurer received the emergency room providers'
invoices/bills within 30 days of receiving notice of the incident/accident.
In both cases, the insurer was found to have incorrectly applied the emergency
care provider's invoice/bill to the deductible. In both cases, Judge
Marblestone of Seminole County found that, based on the clear language
of Fla. Stat. § 627.736(4)(c), "PIP insurers must reserve $5,000
of PIP benefits for payment to physicians licensed under the stated chapters
of Florida Statute. § 627,736(4)(c) and the $5,000 may only be used
to pay claims from such physicians until 30 days after the date the insurer
receives notice of an accident." (Emphasis as in opinion). Id. at
para. 15 (in each opinion). Similarly, in Orthopaedic Clinic of Daytona
Beach, P.A. a/a/o Charles Murray v. State Farm Mutual Automobile Insurance
Company, 17 Fla. L. Weekly Supp. 1145a (Fla. 7th Jud. Cir. 2010), Judge
Henderson of Volusia County found that Fla. Stat. § 627.736(4)(c)
specifically required insurers to reserve benefits for the protected class
of emergency services/care providers for thirty (30) days after the insurer
receives notice of an incident/accident. The $5,000 reserve must be used
to the timely submitted claims of members of the protected class.
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