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Exhaustion of PIP Benefits: How it Relates to Billed Emergency Services

The 4th District Court of Appeals opinion in Northwoods Sports Medicine and Physical Rehabilitation, Inc., and Wellness Associates of Florida, Inc. v. State Farm Mutual Automobile Insurance Company and USAA Casualty Insurance Company held that once personal injury protection (PIP) insurance benefits are exhausted through payment of valid claims, an insurer no longer holds any liability to pay or litigate those claims, in the absence of bad faith in the handling of the claim by the insurer.

However, like any convoluted rule in Florida, there are exceptions to the exhaustion rule. If the insurer made a gratuitous payment, meaning that the insurer has made a payment to a provider who ultimately submitted their bills late, benefit exhaustion would be a defense that is waived. Likewise, if the insurer has engaged in bad faith, a term that has yet to be properly defined in the exhaustion of benefits context, then the exhaustion is not proper.

Another exception was recently discussed and ultimately ruled upon in the case below deals with emergency services and care. It is important to note that Florida statute 627.736 (4)(c) requires the insurer to create a mandatory reserve for payment of PIP benefits. The insurer is required to hold $5,000 for emergency services and care. Until those emergency providers are reimbursed, this reserve cannot be used to pay for non-emergency care. Thus, it follows that benefits are not properly exhausted, if…. The deductible is applied to the emergency-care provider’s invoices/bills. The deductible should always be satisfied by the non-emergency care provider’s bills.

Emergency Care is defined by the state of Florida as:

“’Emergency services and care’ means medical screening, examination, and evaluation by a physician, or, to the extent permitted by applicable law, by other appropriate personnel under the supervision of a physician, to determine if an emergency medical condition exists and, if it does, the care, treatment, or surgery by a physician necessary to relieve or eliminate the emergency medical condition, within the service capability of the facility.”

Emergency Physicians of Central Florida, LLP A/A/O Ivan Romano v. Progressive Express Insurance Company

The insurer, Progressive, issued a policy of insurance to Ivan Romano with a $1,000 deductible. Emergency Physicians of Central Florida (EPCF) provided emergency services and care for Mr. Romano. EPCF billed $639 for the services they rendered to Mr. Romano. Progressive chose to apply their bill to the remainder of the deductible and paid 80% of the remainder (paying EPCF $92.80).

Now we must ask whether “exhaustion of benefits” is a defense to a claim by a medical provider of emergency services/care who timely submitted its bill for payment but had its bill applied to the PIP deductible

The court ruled that exhaustion of benefits is NOT a defense to such claims. The court interpreted Florida law regarding protecting emergency care providers by providing an additional level of protection. This additional level ensures payment of their invoices and bills. Emergency service providers do not have any timetables within which to submit their invoices in hopes of avoiding the deductible. Thus, the court reasoned that emergency care providers are a class within themselves and are a protected class within the realm of the Florida PIP statutes (Section 627.736). Despite this protected class status, Progressive exhausted benefits by making payments to non-emergency care providers.

Thus, the 9th Judicial Circuit held that exhaustion was not proper in this situation and that insurance carriers CANNOT apply the amount ($5,000 reserve) of such claims from emergency care providers toward any PIP deductible. The court-mandated that the deductible has to be satisfied by the invoices submitted to the insurer by non-emergency providers, and once the deductible is satisfied by these providers, the protected provider is entitled to have its bill paid.

What does all this mean for emergency care providers?

As long as emergency care providers submit their bills timely pursuant to Florida Statutes 627.736(4)(c), they are protected from the application of the deductible. Thus, emergency care providers will be paid in full if their treatment is reasonable, related and necessary. Exhaustion of benefits is not a defense to the emergency care provider so long as they complied with Florida PIP law, and the insurer applied the emergency care provider’s bills/invoices to the PIP deductible.

It is essential to contact an experienced PIP litigation attorney to discuss the newest niches in the constantly evolving PIP insurance laws in Florida. If you have any questions regarding recent court decisions, I would be happy to discuss them with you and help you devise a plan of action based on the application of the law.

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