Would you sue for $14? Wellness Associates of Florida did when an auto insurer reduced its Personal Injury Protection (PIP) claim.
Some medical clinics like to scream “Foul!” in court when they don’t receive everything they asked. PIP attorneys are all happy to accommodate them because they can bill upwards of $300 per hour — sometimes $500 an hour — to fill out the paperwork. Lawyers and their clients are happy when they win because the insurance company pays their damages and fees.
Wellness Associates went home unhappy after it lost its appeal to the Fourth District Court of Appeals. Northwood Sports Medicine was also disappointed when the court put the clinics’ two cases into one opinion.
Wellness had initially sued the insurer for damages and amended that to bad faith when the last $14 in PIP benefits were paid. The insurer moved for summary judgment, saying it had paid every dollar it owed, and won.
The clinic appealed, where its case was consolidated with that of Northwood. It had sued another insurer for damages and then bad faith, and also lost.
In its opinion on the Wellness case, the appellate court said that an insurer doesn’t have to pay anything more on a valid PIP when the full amount was paid if the insurer met certain legal requirements. Also, an insurer doesn’t have to set aside the disputed dollar amount when it it denies or reduces a claim.
“Where the reasonableness of the provider’s claim is in dispute, post-suit exhaustion of benefits extinguishes the provider’s right to further payments, as long as exhaustion is prior to the establishment of the amount to which the medical provider is entitled to under PIP,” the court wrote in its opinion.
In other words, if the PIP benefits have been used up before the disputed amount is settled, the claim is considered settled. The court also said it didn’t matter whether the benefits were used up before or after the lawsuit was filed.
Maybe that will make some clinics think twice before picking up the phone and asking its lawsuit-happy attorney to run to the courthouse.