Recently, the 1st District Court of Appeals ruled that Shands Medical Center’s health insurance contracts and information regarding negotiated rates for medical services performed at their facility WERE neither reasonable nor relevant discovery requests. This is a landmark decision. State Farm is constantly attempting to harass medical providers via requests for contracts they may have with Medicare, Medicaid, and health insurers. Previously, the 4th District Court of Appeals allowed this proprietary information pre-suit. However, the court in Shands Jacksonville Medical Center, Inc. v. State Farm Automobile Insurance Company, 40 FLW D1447a (Fla. 1st DCA June 22, 2015) disagreed and held the information to be irrelevant within the scope of a Personal Injury Protection suit.
Background of the case:
In this case, State Farm, sent a pre-litigation request to Shands pursuant to Florida Statute Section 627.736(6)(b) asking for 1) copies of third-party contracts with medical insurers which contain negotiated discount rates; and 2) corporate representative depositions of Shands’ employee(s).
State Farm requested third-party contracts with medical insurers from Shands Medical Center. Specifically, State Farm attempted to obtain information regarding negotiated discount rates Shands received from other insurers and third parties. Shands argued that the Florida PIP statute does not entitle State Farm to these documents in that the information is proprietary and protected by trade secrets.
The trial court initially ruled against Shands and ordered the hospital to produce copies of third-party contracts with health insurers. Shands was told to produce 37 of these negotiated contracts along with spreadsheets of the amounts they accepted from Medicare and Medicaid.
The First DCA disagreed with the trial court. The appellate court differentiated between what is discoverable per Florida Statutes Section 627.736(5)(a) and subsection (6)(b) and (c). A (6)(b) request allows the insurer to receive information such as written medical reports, and statements indicating why the treatment and costs were reasonable. However, (6)(b) does not allow the insurer to request proprietary information such as health insurance contracts and negotiated rates. This information was said to exceed the “extent of permissible discovery under (6)(b) and (c).“
Florida Statutes Section 627.736(6)(B) allows an insurer to request information such as treatment notes, statements as to why the charges and treatment were reasonable, from the medical provider. However, negotiated contract rates and third-party contracts do not fall within the scope of a (6)(B) request, as they don’t discuss treatment or reasonableness.
4th DCA VS. 1ST DCA
An ancillary issue presented in the case was whether the hospital must produce a corporate representation for deposition.
4th DCA-Allows Depositions upon oral examination.
1st DCA-Disagreed with the 4th. They believe the discovery of facts solely includes the production of documents included in (6)(b).
How this affects you:
The 1st DCA’s decision conflicted with the 4th DCA’s decision. Thus, the question of whether the discovery of facts includes the third party contracts and depositions will ultimately go to the Supreme Court for a final decision. Any pre-suit request for the information above merits a phone call to our office. We have years of experience litigating both pre-suit and post-suit PIP matters. We will make sure you send the correct information to insurers as well as determine if what is asked of you is a reasonable request for information. Give us a call!