by Laura R. Mauldin, Esq.

On June 22, 2015, the First District Court of Appeal handed down an opinion defining the scope of the enforcement provision available to insurers under section 627.736(6)(c), Florida Statutes, which is part of Florida’s ‘No-Fault” or personal injury protection (PIP) law. In Shands Jacksonville Medical Center, Inc. v. State Farm Mutual Automobile Insurance Co., No. 1D14-2001, slip op. (Fla. 1st DCA June 22, 2015), the court reversed a discovery order from the trial court below directing the Appellant, Shands Jacksonville Medical Center, “to produce a variety of documents, including confidential contracts between Shands and [thirty-seven] health insurance entities.” Id. at 2. In a unanimous decision, the court determined that the documents were beyond the scope of the pertinent disclosure statute.

The Appellee, State Farm, argued that the contracts sought contained information – including negotiated “discount rates” – necessary for State Farm to determine if the amounts billed were reasonable. Id. State Farm requested the disputed documents pursuant to section 627.736(6)(b), which requires health care providers for a PIP carrier’s insureds to hand over information and documents related to the treatment rendered and associated costs. When Shands failed to comply with State Farm’s request, State Farm filed a petition under section 627.736(6)(c). Subsection (6)(c) provides, in the event of a dispute regarding “an insurer’s right to discovery of facts under this section, the insurer may petition a court” for a discovery order. The trial court, citing to 627.736(5)(a) regarding the reasonable reimbursement rate for medical bills, determined the contracts requested fell “within the ambit of the information a PIP carrier is entitled to obtain under section 627.736(6)(b).” Shands, No. 1D14-2001, at 3-4 (emphasis added).

The First DCA reversed, finding State Farm requested the contracts under the wrong section of the PIP statute. Writing for the three-judge panel, Associate Judge Dawn Caloca-Johnson stated the phrase “discovery of facts,” in section 627.736(6)(c), does not allow “discovery under the entirety of section 627.736, including . . . evidence that may be considered when determining the reasonable reimbursement rate for medical bills . . . referred to in section 627.736(5)(a),” but rather “applies only to the types of information a healthcare provider is required to provide as delineated in section 627.736(6).” Shands, No. 1D14-2001, at 5. While the types of evidence contemplated by (5)(a) are implicated “when there is a dispute as to the reasonableness of charges for treatment,” they are not involved when the dispute concerns only an insurer’s attempt to obtain information in order to assess the reasonableness of charges. Id. at 8.

Ultimately, the court held that while the documents sought might be relevant and discoverable in litigation regarding subsection (5)(a) and the reasonableness of charges, “they are clearly not the types of documents specifically delineated by subsection (6)(b). Accordingly, State Farm was not entitled to these documents in a proceeding brought pursuant to subsection (6)(c).” Id. [1]

[1] In Shands, the First DCA also considered  the portion of the trial court’s order requiring Shands to produce a designated corporate representative for deposition. The court found that “nothing in subsections (6)(b) or (c) contemplates requiring a PIP medical provider to submit any of its representatives to deposition, and the trial court erred” in so doing. The First DCA also certified conflict with Kaminester v. State Farm Mutual Automobile Insurance Co., 775 So. 2d 981 (Fla. 4th DCA 2000), “to the extent that it holds that the ‘discovery of facts’ referred to in section 627.736(6)(c), Florida Statutes, means that the discovery methods provided for in the Florida Rules of Civil Procedure are available to insurers that institute proceedings pursuant to that statute.” Shands, No. 1D14-2001, at 9-10.