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AA Suncoast Chiropractic Clinic, P.A. v. Progressive American Insurance Co.

United States District Court, M.D. Florida, Tampa Division

May 16, 2017

AA SUNCOAST CHIROPRACTIC CLINIC, P.A., PALM HARBOR-WEST CHASE MEDICAL GROUP, P.A., d/b/a Tampa Bay Spine Specialists, and SPINAL CORRECTION CENTERS, INC., on behalf of themselves and others similarly situated, Plaintiffs,
v.
PROGRESSIVE AMERICAN INSURANCE COMPANY, PROGRESSIVE SELECT INSURANCE COMPANY, and THE PROGRESSIVE CORPORATION, Defendants.

          ORDER

          RICHARD A. LAZZARA UNITED STATES DISTRICT JUDGE.

         BEFORE THE COURT is Plaintiffs' Motion for Class Certification with exhibits (Dkt. 80), Defendants' Memorandum in Opposition with attached exhibits including Defendants' Statement of Facts (Dkt. 118), and Plaintiffs' Reply (Dkt. 121).[1] After careful consideration of the allegations of the Second Amended Complaint (Dkt. 22), the submissions of the parties, and the applicable law, the Court concludes that the motion should be granted in part and denied in part.

         ALLEGATIONS AND PERTINENT BACKGROUND

         This is a dispute between the assignees of PIP[2] benefits and an insurance company over the company's practice of reducing policy limits from $10, 000 to $2, 500 based on an opinion of a non-treating physician. Plaintiffs contend that the Florida Motor Vehicle No-Fault Law does not permit a non-treating physician to make an after-the-fact decision that an injured claimant does not have an emergency medical condition.[3] Although the statute permits both treating and non-treating physicians and providers to make an “affirmative EMC determination, ” Plaintiffs emphasize, it allows only treating physicians and providers to make a “negative EMC determination.”[4] The basis of this lawsuit is that Defendants' after-the-fact “negative EMC determination” runs afoul of Florida statutory law.

         On examination of the particular allegations of the second amended complaint, the three Plaintiffs are providers of chiropractic or medical services. The three insureds listed in the complaint voluntarily assigned their PIP benefits to one of the named Plaintiffs. Jacob Perez, insured by Progressive Select Insurance Company (Progressive Select), was involved in an automobile accident in July 2014.[5] Dr. Andrion, a chiropractor, of AA Suncoast treated him from July 2014 through October 2014, and Anthony Albert, M.D., gave him follow-up treatment beginning late September 2014.[6] In August 2014, without knowing whether an EMC determination had been made, Progressive Select requested and obtained an EMC peer review report conducted by David Karp. M.D.[7] Dr. Karp made a negative EMC determination, and benefits were limited to $2, 500.

         The second claimant, Antonia Blauch, was insured by Progressive American Insurance Company (Progressive American) when she was injured in a car accident on June 7, 2014.[8] She first received medical care from Baywest Chiropractic, and began receiving follow-up medical care from Robert M. Dean, M.D. of Tampa Bay Spine on July 24, 2014.[9] Progressive American received the affirmative EMC determination from Dr. Dean on August 6, 2014.[10] On August 11, 2014, at Progressive American's request, Dr. Karp conducted a peer review and made a negative EMC determination.[11]

         Progressive Select insured Leesa Johnson who suffered injuries in an automobile accident on June 5, 2014.[12] She received treatment that day from Spinal Correction Centers continuing through mid-September 2014.[13] In August 2014, she received follow-up medical treatment from Amy Q. Liu, M.D.[14] Despite the affirmative EMC determination by Dr. Liu, Progressive Select chose to obtain a peer review by a physician who made a negative EMC determination.[15] Formal demand was sent and received in all three cases.

         The second amended complaint seeks injunctive and declaratory relief in Count I and damages in Count II. Count I specifically requests the following relief:

a. A declaration finding that the language of the Progressive Defendants' insurance policy purporting to allow reduction to the amount of available PIP benefits through a negative EMC determination by any doctor, or other specified professional, who is not a “provider” that had provided initial or follow-up services to the injured insured is illegal and contrary to the applicable provisions of the Florida Motor Vehicle No-Fault Act;
b. A declaration finding that using the “EMC Peer Review” or EMC Paper Review process, or any other means, to reduce available PIP benefits by the Progressive Defendants violates the applicable provisions of the Florida Motor Vehicle No-Fault Act;
c. A declaration finding that the Progressive Defendants are not permitted, under the applicable provisions of the Florida Motor Vehicle No-Fault Act, to disregard an affirmative EMC determination.
d. Reinstating the full amount of PIP coverage, in the amount of $10, 000, which should have been available under the affected policies.
e. Enjoining the Progressive Defendants from including provisions in their policies which purport to allow the above, illegal conduct;
f. Requiring the Progressive Defendants to inform all policyholders and providers who may have been affected by this improper conduct; and
g. Awarding to the Plaintiffs the costs and attorneys' fees made necessary by seeking this relief.[16]

         Count II seeks only damages for “unpaid reimbursements, under the full limits of PIP coverage, calculated pursuant to section 627.736.”[17]

         The resolution of this case, Plaintiffs contend, turns solely on the interpretation of section 627.736, Florida Statutes (2013) as applied to Defendants' practice of making unauthorized negative EMC determinations. Defendants routinely make the decision to reduce benefits either 1) after a treating physician or provider finds an emergency medical condition exists or 2) without knowing whether any determination has been made. According to Plaintiffs, this practice overlooks the statutory differentiation between providers who may make a negative EMC determination and those who may make an affirmative EMC determination. Specifically, subparagraph 3. provides for reimbursement of benefits up to $10, 000 for “initial or follow-up services” as described in subparagraphs 1. and 2. if a physician, osteopath, physician assistant, or advanced registered nurse practitioner has determined that the injured person had an emergency medical condition. Fla.Stat. § 627.736(1)(a)3. (2013) (emphasis added).[18] Subparagraph 4. provides that reimbursements are limited to $2, 500 “if a provider listed in subparagraph 1. or subparagraph 2. determines that the injured person did not have an emergency medical condition.” Fla. Stat. § 627.736(1)(a)4. (2013) (emphasis added).[19]The crux of Plaintiffs' position is that the statute does not permit non-treating physicians or providers to determine a limitation of benefits per the plain language of the statute, but only providers described in subparagraphs 1. and 2. who deliver either initial or follow-up services can make such a determination.[20]

         Proposed Class

         Plaintiffs seek certification of two classes.[21] First, the Second Amended Class Complaint alleges declaratory and injunctive relief for the following class:

A. All Qualified Providers who: (i) received an assignment of benefits from a Claimant under a Progressive PIP policy, (ii) provided initial or follow up medical services to a Claimant after January 1, 2013, and (iii) were given notice by Progressive that available PIP benefits were reduced to $2, 500 because of a Negative EMC Determination that Progressive obtained from a Non-treating Provider; and
B. All Claimants who were notified that Progressive reduced available PIP benefits to $2, 500 because of a Negative EMC Determination Progressive obtained from a Non-treating Provider.

         As a second subclass Plaintiffs seek monetary damages for breach of contract for the following:

All Qualified Provider Class Members: (i) who were not paid in full for their services, (ii) who made a pre-suit demand to Progressive for payment pursuant to §627.736(10), and (iii) where Progressive received documentation from a duly licensed physician, dentist, physician's assistant or advanced registered nurse practitioner that the Claimant had an Emergency Medical Condition.

         As articulated by the Plaintiffs as part of the class definition, the term “Qualified Provider” is a provider described by section 627.736(1)(a) of the Florida Statutes. “Progressive” means Progressive Select Insurance Company and Progressive American Insurance Company. “Claimant” is an injured person who received medical services for injuries sustained in an accident within 14 days from a Qualified Provider. “Non-treating Provider” means a person or entity that did not provide initial or follow-up treatment as defined by section 627.736(1)(a)1. or 2. to a Claimant. “Negative EMC Determination” is a determination that a Claimant did not have an Emergency Medical Condition.

         DISCUSSION

         Plaintiffs allege this case as one addressing coverage[22] while Defendants characterize it as challenging authorized claims-handling procedures.[23] Defendants challenge Plaintiffs' interpretation of Florida's no-fault law as leading to absurd results because insurance companies could never undo a negative EMC determination, whereas Plaintiffs argue that the plain language of the statute cannot be ignored in giving only specific treating providers the power to make negative EMC determinations.[24] Plaintiffs assure this Court that they seek no damages in their count for declaratory and injunctive relief as reflected in the allegations and wherefore clause of Count I of the second amended complaint.[25] Defendants rely on cases to assert that in almost all, if not all, PIP cases seeking declaratory and injunctive relief, the predominance requirement of Rule 23(b)(2) and (3) cannot be met because the individual damage claims predominate the claim for equitable relief. Defendants urge that their defenses almost automatically remove an action involving PIP benefits from ever conceivably meeting the requirements for class certification.[26] Against this backdrop, the Court analyzes each requirement for certifying a class.

         Standing

         The first step in the examination of class certification begins with constitutional standing, which must be determined before any consideration of the four requirements set forth in Federal Rule of Civil Procedure 23(a). Prado-Steiman v. Bush, 221 F.3d 1266, 1280 (11th Cir. 2000) (citing Griffin v. Dugger, 823 F.2d 1426, 1482 (11th Cir. 1987)). The named plaintiffs must have standing to raise the issues before a determination of their representative capacity is made. Prado-Steiman, 221 F.3d at 1280 (citing Griffin). At least one named class representative must have Article III standing to raise each class subclaim. Prado-Steiman, 221 F.3d at 1279-80. A plaintiff must show that he “personally suffered” the “same injury” as others in the class. Veal v. Crown Auto Dealerships, Inc., 236 F.R.D. 572, 577 (M.D. Fla. 2006) (quoting Prado-Steiman, 221 F.3d at 1279).

         The named Plaintiffs as the assignees of the insureds have standing to seek declaratory and injunctive relief. The insureds' PIP benefits were reduced to $2, 500 after a negative EMC determination by Defendants. The insureds and their assignees have been injured through the loss of full coverage as a result of Defendants' practice of reducing benefits after using non-treating providers in contravention to the Florida statutory law, according to Plaintiffs. The assignees are the owners of the accounts receivables. The sole owners of AA Suncoast and Tampa Bay Spine are doctors actively engaged in providing medical services in successor entities that they own.[27] As noted by Plaintiffs, the injunctive relief sought under Chapter 86 of the Florida Statutes is not limited to prospective relief, but includes a return to the status quo where claims-handling would be restored and their bills processed.[28]

         With respect to the subclass seeking damages, the insureds and their assignees have suffered injury as a result of the Defendants' breach of the insurance policies. The Plaintiffs have not been reimbursed for initial or follow-up services for the full $10, 000 available under Florida law as incorporated into the policies. Each Plaintiff provided a pre-suit demand for payment pursuant to the PIP statute. The Plaintiffs allege and attach the pre-suit demand letter for all three named Plaintiffs.[29] In all three instances, Defendants responded in writing to the formal demand letters and state, in the answer, that the responses speak for themselves.[30] Defendants do not deny that they received the demand letters or that they responded. Having established injury, the Plaintiffs have standing to seek damages on behalf of the subclass.

         Adequate Definition ...


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