Maximize Your Reimbursement for Patients Involved in Accidents from PIP Insurance Carriers

Hospitals, Physicians and other providers are eligible for reimbursements from PIP insurance carriers (under an assignment of benefits) for emergency and follow-up medical services to patients involved in automobile accidents. In Florida, there are statutory protections in place to ensure hospitals and other medical service providers are paid for their services before any other liens are satisfied from the injured patient’s PIP policy of an injured patient.  The attorneys at Smith & Associates can help maximize the reimbursements permitted by law.

What is PIP?

Personal Injury Protection.  PIP is a type of insurance coverage required by all Florida motorists.  Benefits of PIP insurance are used to pay medical bills and lost wages in the event a driver is injured in an accident.

PIP insurance benefits to hospitals and other providers are “primary,” meaning that the medical providers are reimbursed first before other payments can be made under the policy. Section 627.736(4), Florida Statutes.

How does PIP work for Hospitals, Physicians and other Providers?

Florida requires insurance policies to reserve at least $10,000 in PIP benefits for medical and disability payments.  Hospitals and other qualified health care providers can become lienholders of those benefits if certain services were provided to the injured insured.  Pursuant to section 627.736(1)(a), Florida Statutes, “medical benefits” includes payment of 80-percent of all reasonable expenses for medically necessary surgical, medical, x-ray ambulance, hospital and nursing services if the injured patient received initial services within 14 days after the motor vehicle accident.

What Factors Determine Reimbursement of Medical Services?

One of the first factors a hospital or physician should consider in determining PIP coverage eligibility is when the injured patient was initially treated in relation to the automobile accident.  The injured motorist must receive the initial medical services within 14 days after the accident in order to be covered by PIP insurance. If initial medical services were not provided within 14 days of the accident, then there is no PIP coverage eligibility for any medical services.

Medical reimbursements may also cover “follow-up” services and care so long as they are consistent with the underlying medical diagnosis rendered pursuant to the initial services (within 14 days of the accident) upon referral by a qualified provider (licensed physician, dentist, or chiropractor).

A. Requesting PIP Reimbursements

Once the health care provider determines that PIP coverage applies to the medical services rendered to an injured patient, the provider should immediately submit written notice to the PIP insurance carrier indicating the patient’s coverage and the amount of the medical services provided.  An insurer must pay the provider’s PIP benefits within 30 days after written notice is furnished. Written notice is to be made as soon as practicable after an accident involving a motor vehicle.

B. Amount of Reimbursement

Subject to certain exclusions, reimbursement for medically necessary services can be up to $10,000 if the injured person had an “emergency medical condition” pursuant to section 627.736(1)(a)3., Florida Statutes.  In order to qualify as an emergency medical condition, the patient’s condition must be determined as such by a physician licensed under chapter 458 or chapter 459, a dentist licensed under chapter 466, a physician assistant licensed under chapter 458 or chapter 459, or an advanced practice registered nurse licensed under chapter 464.  If the medical services were provided to an injured person who did not have an emergency medical condition, then reimbursement is limited to $2,500.

What kinds of medical services are reimbursable?

The law provides for the reimbursement of emergency services and care to an injured person insured under PIP.  “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. Section 395.002(9), Florida Statutes.

Additionally, the services must be “medically necessary” pursuant to section 627.732(2), Florida Statutes, which is defined as a medical service or supply that a prudent physician would provide for the purpose of preventing, diagnosing, or treating an illness, injury, disease, or symptom in a manner that is:

(a) In accordance with generally accepted standards of medical practice;

(b) Clinically appropriate in terms of type, frequency, extent, site, and duration; and

(c) Not primarily for the convenience of the patient, physician, or other health care provider.

Section 627.732(2), Florida Statutes.

A physician, hospital or clinic rendering treatment to an injured person for a bodily injury covered by PIP benefits may charge the insurer (and injured party) a “reasonable” amount for the services and supplies rendered.  The insurer providing such coverage may pay for the charges directly to the provider if the insured receiving such treatment (or his or her guardian) has countersigned a properly completed invoice, bill, or claim form approved by the Florida Office of Insurance Regulation upon which such charges are to be paid for as having actually been rendered to the best knowledge of the patient or his or her guardian.

What are “reasonable charges” for the medical treatment of injured persons?

Under the PIP statutes, a reasonable charge may not exceed the amount the provider customarily charges for like services or supplies. In determining whether a charge for a particular service, treatment, or otherwise is “reasonable,” section 627.736(5)(a), Florida Statutes, provides that consideration may be given to evidence of usual and customary charges and payments accepted by the provider involved in the dispute, reimbursement levels in the community and various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.

The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:

a. For emergency transport and treatment by providers licensed under chapter 401, 200-         percent of Medicare.

b. For emergency services and care provided by a hospital licensed under chapter 395,    75-percent of the hospital’s usual and customary charges.

c. For emergency services and care as defined by s. 395.002 provided in a facility             licensed under chapter 395 rendered by a physician or dentist, and related hospital           inpatient services rendered by a physician or dentist, the usual and customary charges in the community.

d. For hospital inpatient services, other than emergency services and care, 200-percent            of the Medicare Part A prospective payment applicable to the specific hospital providing       the inpatient services.

e. For hospital outpatient services, other than emergency services and care, 200-percent            of the Medicare, Part A, Ambulatory Payment Classification for the specific hospital          providing the outpatient services.

f. For all other medical services, supplies, and care, 200 percent of the allowable             amount under:

(I) The participating physicians fee schedule of Medicare Part B, except as provided in sub-sub-subparagraphs (II) and (III).

(II) Medicare Part B, in the case of services, supplies, and care provided by ambulatory surgical centers and clinical laboratories.

(III) The Durable Medical Equipment Prosthetics/Orthotics and Supplies fee schedule of Medicare Part B, in the case of durable medical equipment.

For purposes of submitting written notification of a PIP claim, it is recommended that the hospital or other medical provider submit the full amount of services provided to the insurer.  The provider need not calculate the reductions that are allowable under the statute.

Be advised that carriers may calculate (or miscalculate) the provider’s reimbursement for medical treatment in a way that is self-serving and improper.  For example, in a recent case before the Florida Supreme Court, an insurance carrier deducted the insured’s deductible of $1,000 from a hospital’s benefits after making the statutory reductions pursuant to section 627.736(5)(a), Florida Statutes, above. Progressive Select Ins. Co. v. Florida Hospital Medical Center, 260 So. 3d 219 (Fla. 2018).  By taking the reductions first, the carrier saved $200 that it would have, otherwise, paid to the hospital.  The Court said this was a miscalculation that was not consistent with another provision (section 627.739(2), Florida Statutes) requiring the insurance carrier to apply the deductible to “100-percent of the expenses and losses” of the insured.  Thus, when read together, the Court determined that the deductible must be applied to the total losses (including an insured’s medical bills) prior to applying reductions afforded to emergency medical services in section 627.736(5)(a)1., Florida Statutes. Id.

A. Collection of PIP Reimbursement

Once the medical provider provides written notice of the PIP claim to the insurer, the claim becomes overdue if not paid within 30 days.  An action to recover PIP benefits can be initiated pursuant to 627.736(4), Florida Statutes.  However, before any action to recover benefits can be initiated against an insurer, written notice of an “intent to initiate litigation” must be provided to the insurer. Such notice may not be sent until the claim is overdue (30 days after initial notice is provided), including any additional time the insurer has to pay the claim pursuant to law.

The notice of intent to litigate must state that it is a “demand letter under s. 627.736” and state, with specificity, the following:

1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured.

2. The claim number or policy number upon which such claim was originally submitted to the insurer.

3. To the extent applicable, the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due.

The demand notice must be delivered to the insurer (specifically addressed to the person designated by the insurer for the purposes of receiving notices) by certified or registered mail, return receipt requested.  Each licensed insurer is required to file with the Florida Office of Insurance Regulation the name and address of the designated person to whom notices must be sent which the office shall make available on its Internet website. The name and address on file with the office pursuant to section 624.422, Florida Statutes, is deemed the authorized representative to accept notice pursuant to this subsection if no other designation has been made.

No action may be brought if the insurer pays the overdue claim within 30 days after receipt of the demand notice, along with applicable interest and a penalty of 10-percent of the overdue amount paid by the insurer, subject to a maximum penalty of $250.  If the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, no action may be brought against the insurer if, within 30 days after its receipt of the notice, the insurer mails to the person filing the notice a written statement of the insurer’s agreement to pay for such treatment in accordance with the notice and to pay a penalty of 10 percent, subject to a maximum penalty of $250, when it pays for such future treatment in accordance with the law.

B. Attorney’s Fees

In a dispute with an insurance carrier over PIP benefits, attorney’s fees may be awarded pursuant to the attorney’s fee provision in section 627.428, Florida Statutes (awarding a reasonable attorney’s fee to a prevailing named or omnibus insured), or section 768.79, Florida Statutes (offer of judgment and demand for judgement), provided the attorney’s fee:

(a) Complies with prevailing professional standards;

(b) Does not overstate or inflate the number of hours reasonably necessary for a case of comparable skill or complexity; and

(c) Represents legal services that are reasonable and necessary to achieve the result obtained.

Exceptions to the attorney’s fee recovery includes section 627.736(10), Florida Statutes (when the insurer pays 30 days after the demand letter or mails its agreement to pay for future treatment within the prescribed time), and section 627.736(15), Florida Statutes (requiring all claims be brought in a single action to recover PIP benefits).

Upon request by either party, a judge must make written findings, substantiated by evidence presented at trial or any hearings associated therewith, that any award of attorney fees complies with 627.736, Florida Statutes.

C. Other Remedies

An insurer that fails to pay a valid claim submitted by a hospital (or other qualified provider) is engaging in a prohibited unfair or deceptive practice and is subject to the penalties provided by in section 626.9521, Florida Statutes.  The Florida Office of Insurance Regulation has the power and duty to discipline the insurer if the insurer does the following with such frequency so as to indicate a “general business practice”:

1. Fails to pay valid claims for personal injury protection; or

2. Fails to pay valid claims until receipt of the demand notice required by section 627.736(10), Florida Statutes.

In addition, the Department of Legal Affairs may investigate and initiate actions for a violation of this subsection, including, but not limited to, the powers and duties specified in part II of chapter 501.

Case Law on Specific Issues Relating to Hospital Liens

Hospital liens take precedence in a judgement or settlement in favor of the patient.  The Third District Court of Appeals in Crowder v. Dade County, 415 So. 2d 732 (3rd DCA 1982), held that the lien of a hospital is intended to be effective for the “full amount” against the proceeds of a judgment or settlement in favor of the patient. Id., citing Dade County v. Perez, 237 So. 2d 781 (Fla. 3d DCA 1970) and Dade County v. Bodie, 237 So. 2d 553 (Fla. 3d DCA 1970).  Furthermore, the District Court in Crowder held that the amount of the lien could not be discounted or diminished by the amount of attorneys’ fees which may be due to the patient’s counsel. Crowder, supra, citing Public Health Trust of Dade County v. O’Neal, 348 So. 2d 377 (Fla. 3d DCA 1977).