Information regarding payments made to third parties in the course of exhausting PIP benefits is discoverable. Such payments do form the basis of a litigious issue that is not frivolous.

This suit involved a medical provider seeking payment on treatment rendered to the plaintiff on dates of service June 11, 2018 through July 30, 2018. The defendant asserted exhaustion of benefits as its affirmative defense. Following the filing of its answer and affirmative defense, the defendant served the plaintiff with a Safe Harbor Letter and a Proposed Motion for Sanctions pursuant to Fla. Stat. 57.105 on March 22, 2022. The proposed motion for sanctions included unverified copies of the defendant’s PIP Log, Explanations of Benefits, and Declaration page. However, as the court pointed out, the defendant failed to include its policy of insurance, Health Insurance Claim Forms (HCFA), medical records, proofs of mailing, or any other documents which would attest to the accuracy of those documents. The court noted that on April 8, 2022, 17 days after the defendant served their proposed motion for sanctions and safe harbor letter, the defendant responded to the plaintiff’s request for production. The proposed motion was then filed on April 14, 2022, and the plaintiff dismissed its suit on May 26, 2022, after which, the defendant sought its fees pursuant to the 57.105 motion for sanctions. 

In analyzing the defendant’s entitlement to fees, the court noted that Florida appellate courts have consistently ruled that: “[w]hen assessing attorney’s fees against a losing party’s attorney, the trial court must find that there were no justiciable issues of law or fact and that the losing party’s attorney did not act in good faith based on the representations of his or her client.” Citing Siegel v. Rowe, 71 So. 3d 205, 211 (Fla. 2d DCA 2011). In determining whether the instant suit was frivolous, the court turned to the 4th DCA decision in Progressive Select Inc. Co. v. Dr. Rahat Faderani, DO, MPH, P.A., 330 So. 3d 928, 929 (Fla. Dist. Ct. App. 2021, in which the 4th DCA held that “[b]ecause the use of NCCI edits comports with the statute, Progressive did not make improper payments or act in bad faith in using the edits to reduce the bill of the third-party provider.” The court used this ruling to conclude that Faderani demonstrates that the discovery of improper payments will preclude the findings on proper exhaustion, thus, plaintiffs are allowed to conduct discovery before determining whether benefits were properly exhausted. 

When applying this principle to the instant case, the court made the following finding: “Thus, it is very clear that Defendant’s payments to other providers, along with their failure to provide the required supporting documentation requested by Plaintiff to verify that said payments were properly made, permitted Plaintiff the opportunity to discern whether any overpayments and/or gratuitous payments resulting in a premature/errant exhaustion of the PIP benefits at issue under the policy had taken place.” Because this documentation was not provided in its demand response, nor in the proposed motion for sanctions, and said documents were provided in discovery responses 17 days after the safe harbor letter and proposed motion for sanctions were served, the court found that the use of a 57.105/safe harbor letter was nothing more than an improper intimidation tactic.

Ultimately, the court found that information regarding payments made to third parties in the course of an exhaustion of PIP benefits is discoverable and such payments do form the basis of a litigious issue that is not frivolous. The implications of this order are that if a carrier wishes to seek sanctions on an exhaustion suit, their best practice would be to provide the PIP Log, Explanations of Benefits, Policy, HCFA’s, medical records, and proof of mailing in its demand response. Having said that, if these documents are not provided in the pre-suit demand response, they should be provided to the plaintiff prior to serving a proposed motion for sanctions pursuant to Fla. Stat. 57.105, as the plaintiff must be given an opportunity to analyze these documents to confirm whether or not their suit is indeed frivolous.
 

_{Case Law Alerts, 1st Quarter, January 2023 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2032 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.}