Joseph L. Riley Anesthesia Assocs. v. Stein

• Decision Date: 29 January 2010
• Docket Number: No. 5D08-2162.,5D08-2162.
• Citation: 27 So.3d 140
• Parties: The JOSEPH L. RILEY ANESTHESIA ASSOCIATES, etc., Appellant, v. Amanda STEIN and Florida Health Care Plan, Inc., Appellee.
• Court: Florida District Court of Appeals

27 So.3d 140

The JOSEPH L. RILEY ANESTHESIA ASSOCIATES, etc., Appellant, v. Amanda STEIN and Florida Health Care Plan, Inc., Appellee.

No. 5D08-2162.

District Court of Appeal of Florida, Fifth District.

January 29, 2010.

Jamie Billotte Moses, of Fisher, Rushmer, Werrenrath, Dickson, Talley & Dunlap, P.A., Orlando, and C. Anthony Schoder, Jr., of Smith, Schoder & Bledsoe, L.L.P., Daytona Beach, for Appellant.

Karina P. Gonzalez, of Law Offices of Steven M. Ziegler, P.A., Hollywood, for Appellee.

C. Anthony Schoder, Jr., of Smith, Schoder & Bledsoe, L.L.P., Daytona Beach, for Appellee, Amanda Stein.

MONACO, C.J.

One of the appellees, Florida Health Care Plan ("Florida Health Care"), a health maintenance organization, pre-authorized surgical procedures for each of its subscribers, the remaining appellees, through Florida Hospital Fish Memorial in Orange City ("Florida Hospital"). The appellant, Joseph L. Riley Anesthesia Associates, P.A., d/b/a JLR Medical Group ("JLR"), provided anesthesia services to the subscribers/patients in conjunction with their surgical procedures. JLR, however, did not have a contractual agreement with Florida Health Care regarding the amounts to be paid for the medical services it provided to subscribers of Florida Health Care. The issue presented to us for determination is whether a hospital-based, but non-contracted, provider of health care services to the subscribers of a health maintenance organization plan may balance bill the subscribers for the unpaid portion of its statements for medical services that have not been paid by the health maintenance organization. We agree with the trial court that in light of section 641.3154, Florida Statutes (2007), the provider may not balance bill the subscriber, and affirm.

The plaintiffs/appellees are a group of 52 medical patients who are subscribers to Florida Health Care.¹ All 52 had surgical procedures at Florida Hospital. The hospital and all of the surgeons involved had contractual arrangements with Florida Health Care regarding insurance payment for their services. Moreover, the contract between Florida Health Care and Florida Hospital provided that the hospital was empowered to direct hospital-based physicians to provide medical services that were pre-authorized by Florida Health Care.

JLR had an exclusive contract with Florida Hospital to provide anesthesia services for surgeries performed there, but had virtually no contact with any of the subscribers prior to the surgeries. What complicated the relationship between the parties further was that although JLR provided anesthesia services to each of the subscribers, it had not contracted with Florida Health Care regarding reimbursement for services.

After each surgery JLR submitted a statement for its medical services to Florida Health Care, but in each instance Florida Health Care paid a reduced amount in full payment of the bill. JLR received and retained each payment, but denied that the payments fully satisfied its statements, and then sent bills to the subscribers for the balance not paid by Florida Health Care. JLR refers to this as "balance billing."

The patients brought suit seeking a declaratory judgment that JLR's balance billing violated section 641.3154, Florida Statutes (2007), and that balance billing violated Florida's Unfair Trade and Deceptive Practices Act under Chapter 501, Florida Statutes. The trial court bifurcated the proceedings and set the declaratory judgment action for trial. At the conclusion of the trial the court held that although JLR did not have a contract with Florida Health Care, it did have a contract with Florida Hospital and with the various surgeons who provided health care services to the 52 subscriber/patients. The final judgment noted that each pre-scheduled surgery performed at Florida Hospital went through an authorization process during which Florida Health Care would decide if each subscriber/patient was eligible, and whether the requested surgery was a covered benefit. Once approved, an authorization number was issued for use by all involved providers in order for them to submit bills to Florida Health Care for payment. The trial court noted that JLR billed Florida Health Care using the assigned authorization number for each subscriber, and that because Florida Hospital had a contract with Florida Health Care, it was empowered to authorize or direct the provision of JLR's anesthesia services to Florida Health Care members pursuant to section 641.3156(1).

When the trial court reviewed section 641.3156(1), it found that under that statute a health maintenance organization was liable for services to a subscriber/patient by a provider, regardless of whether a contract existed between the health maintenance organization and the provider. It concluded further that in those circumstances the health maintenance organization would be liable for payment to the provider, but a subscriber/patient would not. Thus, JLR was prohibited from balance billing the appellees.

A trial court's rulings on its interpretation of statutes and contracts are, of course, reviewed de novo. See Health Options, Inc. v. Palmetto Pathology Servs., P.A., 983 So.2d 608 (Fla. 3d DCA), review denied, 994 So.2d 1104 (Fla.2008); Lukacs v. Luton, 982 So.2d 1217 (Fla. 1st DCA 2008); see also Jones v. Utica Mut. Ins. Co., 463 So.2d 1153, 1157 (Fla.1985); Contreras v. U.S. Sec. Ins. Co., 927 So.2d 16, 20 (Fla. 4th DCA 2006), review denied, 954 So.2d 28 (Fla.2007). We agree with the trial court that pursuant to Florida's "Health Maintenance Organization Act," section 641.17-.3923, Florida Statutes (2007), a health maintenance organization is liable for services rendered to a subscriber/patient by a provider, regardless of whether a contract exists between the HMO and the provider. The statute is quite specific in providing that a health maintenance organization is liable for payment of fees to the provider, and that a subscriber is not liable for payment of fees to the provider. See § 641.3154, Fla. Stat.

More specifically, section 641.3154(4) reads as follows:

A provider or any representative of a provider, regardless of whether the provider is under contract with the health maintenance organization, may not collect or attempt to collect money from, maintain any action of law against, or report to a credit agency a subscriber of an organization for payment of services for which the organization is liable, if the provider in good faith knows or should know that the organization is liable. This prohibition applies during the pendency of any claim made by the provider to the organization for payment of the services and any legal proceedings or dispute resolution process to determine whether the organization is liable for the services if the provider is informed that such proceedings are taking place. It is presumed that a provider does not know and should not know that an organization is liable unless:

(a) the provider is informed by the organization that it accepts liability;

(b) a court of competent jurisdiction determines that the organization is liable;

(c) the office or agency makes a final determination that the organization is required to pay for such services subsequent to a recommendation made by the Subscriber Assistance Panel pursuant to s. 408.7056; or

(d) the agency issues a final order that the organization is required to pay for such services subsequent to a recommendation made by a resolution organization pursuant to s. 408.7057. (Emphasis supplied).

The highlighted first sentence of this subparagraph seems to us to be dispositive. The Legislature specifically informs us through this statute that a provider, even one not under contract to the health maintenance organization, may not balance bill a subscriber to the health maintenance organization. As counsel for Florida Health Care agreed during the oral arguments associated with this case, while JLR retains all of its common law remedies against Florida Health Care, it may not collect or attempt collection against the patient if the provider knows that the health maintenance...