August 5, 2023

PEERING THROUGH A MUDDY LENS: A Look at the Itemized Statement Requirement for PIP Demand Letters

By: Lazaro Garcia

Let’s be honest, PIP isn’t exactly a walk in the park. There are a plethora of issues that arise, ranging from how to handle underpayments of a couple of cents to whether benefits were exhausted properly to everyone’s favorite: BNA. Given all the potential issues with any PIP case, there’s almost too much to process and digest at any stage of the litigation process. That’s where PIP attorneys like me come in. Helping PIP adjusters feel at ease when a PIP case is in litigation and advising them of new legal developments and arguments is an essential function of what we do. To that end, allow me to share with you the most recent case that came out of Florida’s Third DCA, regarding demand letters and the requirements that they must meet. 

What Was the Case About? 

On June 7, 2023, the Third District court of Appeal issued their opinion for Mercury Indemnity Company of America v. Pan Am Diagnostic of Orlando, a/a/o Joceline Pierrilus. Mercury Indemnity Company of America (Mercury) appealed the trial court’s summary judgment in favor of Pan Am Diagnostic of Orlando (Pan Am) involving a demand letter for personal injury protection (PIP) benefits. The trial court determined that Pan Am’s demand letter met the requirements set forth in the Florida Statutes, which include an itemized statement specifying the exact amount, date of treatment, and type of benefit claimed. Pan Am had attached a completed CMS Form 1500, which satisfied the itemized statement requirement. Mercury argued that the demand letter was defective because it did not account for a partial payment made earlier and the amount claimed in the letter differed from the amount sued for. However, the court affirmed the summary judgment, stating that Pan Am had complied with the statute by attaching the completed form. 

How Did We Get to Court in the First Place? 

The case involved a motor vehicle accident in which Joceline Pierrilus, the insured, was injured and received medical treatment from Pan Am. Pan Am submitted a bill to Mercury for $4,300, and Mercury determined the allowed amount to be $2,072.30. After a partial payment, Pan Am sent a demand letter to Mercury requesting PIP benefits for the services rendered. The demand letter stated the amount due as $3,440 but did not account for the partial payment. Pan Am attached a completed CMS Form 1500 to the demand letter. Mercury argued that the demand letter was invalid because it did not provide the exact amount claimed to be due and failed to account for the partial payment. However, the Court ruled in favor of Pan Am, stating that the attached completed form satisfied the itemized statement requirement of the statute. 

How Did the Court Come to That Conclusion? 

The Court’s decision was based on the interpretation of the Florida Statutes governing demand letters for PIP benefits. The statute requires a demand letter to include an itemized statement specifying the exact amount claimed to be due. However, it also provides an alternative option: a completed form that satisfies the requirements of another subsection may be used as the itemized statement. Pan Am had attached a completed CMS Form 1500, which the Court determined met the requirements. Therefore, the Court affirmed the summary judgment in favor of Pan Am.  

What are the Implications of This Case?  

This decision reaffirms that every demand letter submitted to a provider of PIP benefits MUST attach either an itemized statement of charges or a completed CMS-1500 form.  

It should be noted that this recent decision by the Third DCA does not contradict or overrule its prior conclusion in Rivera v. State Farm Mut. Auto. Ins. Co. The Court’s decision focused primarily on Pan Am’s argument that they had fulfilled the requirement of attaching a document that could be used in lieu of an itemized statement, in this case a completed CMS-1500 form. The Court did not address or consider the issue of whether Pan Am had correctly listed the exact amount due in their demand letter that was sent to Mercury. 

How Does This Affect Me?  

This case reinforced that, for a demand letter to be valid pursuant to the statute, it must attach either completed CMS 1500 forms or an itemized statement of the charges. What does that mean for you, the adjuster? Well, the next time you see a demand letter come across your desk/screen, ask yourself “does this demand have a CMS 1500 form or itemized statement attached?” If the answer is “no,” then we have a solid argument for Invalid Demand Letter. If the answer is “yes,” don’t worry, we still have other ways of determining whether a demand letter is valid or not, in addition to the other possible defenses of the case.  

As you know, every issue must be handled on a case-by-case basis. I spend my days looking for and parsing out the strongest defenses on my PIP files, and I am always happy to help you with your PIP questions. When in doubt, Let Laz Litigate! 

Lazaro Garcia
Attorney, Personal Injury Protection
Kelley Kronenberg-Fort Lauderdale, FL.
(954) 370-9970