Giddes v. Lee Memorial Health System


10 Fla. L. Weekly Supp. 820a

Hospitals — Bills — Liens — Health maintenance organizations — Coordination of benefits — Hospital asserting statutory liens against insurance settlement proceeds tendered by automobile insurers to patient who suffered catastrophic injuries in automobile accident — Hospital Participation Agreement and Florida’s HMO Act, as matter of law, initially prevail and preempt hospital’s admissions contract and its statutory lien — Accordingly, hospital may not by-pass Hospital Participation Agreement with patient’s health maintenance organization and coordinate benefits between HMO and proceeds payable from automobile liability insurers — Text of HMO Act plainly provides that, when provider of health care services and HMO have contract with one another for payment of fees for services, the HMO, not the subscriber, is liable for them — Hospital Participation Agreement contractually imposes upon hospital the duty to accept, as a patient, any eligible plan member who presents at one of hospital’s facilities in need of health care services, and agreement provided that hospital would accept payments according to pre-determined fee schedule in full satisfaction and waive difference between its customer charges and fees and the schedules fees for all services covered by provider contract — Neither admissions contract, participation agreement, hospital’s lien statute, nor Florida’s HMO Act give hospital the authority to temporarily opt out of participation agreement and use HMO as standby payor — Patient is third-party beneficiary to Hospital Participation Agreement and has right to enforce this agreement — Patient is entitled to consummate settlements with automobile insurer and accept tendered settlement proceeds without regard to claimed statutory liens because, had hospital acted consistently with its contractual duties, lien would have been extinguished — Hospital may be due monies for any deductibles, co-payments and non-covered services, and if uncollected, hospital may file new liens for correct amounts — Jurisdiction retained for purpose of trial on issue of patient’s damages and to award such other relief as is deemed just and proper — Plaintiff’s motion for summary judgment granted

TIFFANY NICOLE GIDDES, Plaintiff, vs. LEE MEMORIAL HEALTH SYSTEM, a political subdivision of the State of Florida, Defendant. Circuit Court, 20th Judicial Circuit in and for Lee County, Civil Action. Case No. 01- 8683-CA-H. July 18, 2003. James H. Seals, Judge. Counsel: Joseph C. Fuller, Joseph C. Fuller, P.A., Fort Myers, for Plaintiff. Joel Walters, Walters, Levine, Brown, Klingensmith, Thomison, P.A., Sarasota, for Defendant.

PARTIAL SUMMARY JUDGMENT

Plaintiff, TIFFANY NICOLE GIDDES (“Miss Giddes”), moved for summary judgment on Counts I and II of her Second Amended Complaint, seeking declaratory judgment and other relief, and on Defendant’s Counterclaim, seeking enforcement of liens pursuant to Section 18, Chapter 00-439, Laws of Florida, Special Acts 2000 (“the lien law”), against certain automobile insurance policy proceeds. The motion and the response thereto raise numerous issues of statutory and contract construction. This case encounters the confluence of two contracts and two statutes into a dispute over how a hospital gets paid for its services, and the court is called upon to construe and interpret them, according to the applicable rules of contract and statutory construction, and determine how they apply to the facts in this case. The material facts of this case are not in dispute, and therefore, the issues raised by said pleadings are appropriate for disposition by the court by partial summary judgment.

Plaintiff, Miss Giddes, suffered catastrophic injuries in an automobile accident on June 24, 2001. From the accident site Miss Giddes was transported to Lee Memorial Hospital, Cleveland Campus, a member facility of Defendant, Lee Memorial Health System, located in Fort Myers, Florida; she was admitted to that facility for acute treatment of her injuries. Miss Giddes was discharged from acute care treatment at Lee Memorial Hospital on or about June 28, 2001, and was transferred within that facility, and was readmitted for rehabilitation care and treatment through her discharge on or about August 6, 2001. She was readmitted to Lee Memorial Hospital on or about September 21, 2001, for rehabilitation care and treatment and was discharged on or about October 22, 2001.

Lee Memorial Health System (“Lee Memorial”) is a political subdivision of the State of Florida whose purpose as a public body is to operate and maintain a public health system primarily for the residents of Lee County. Under Section 18 of its enabling legislation, Chapter 00-439, Laws of Florida, Special Acts, 2000, Lee Memorial at all times had a

    “. . .lien for all reasonable charges for hospital, physician, and other health care services provided by the Lee Memorial Health System to ill or injured persons, upon the proceeds of all causes of action, suits, claims, counterclaims, and demands accruing to said persons or to their legal representatives, and upon all judgments, settlements, and settlement agreements rendered or entered into by virtue thereof, on account of injuries giving rise to such causes of action, suits, claims, counterclaims, demands, judgments, settlements, or settlement agreements which injuries shall have necessitated such hospital, physician, and other services provided to such ill or injured persons. . .”

Lee Memorial asserted its statutory liens in the amounts of $36,309.95, $63,480.65, and $38,632.15, respectively, against the insurance settlement proceeds tendered to Miss Giddes by Allstate Insurance Company under Policy No. 081093162 and under Policy No. 091082303.

On or before June 24, 2001, Lee Memorial had an agreement with United Healthcare of Florida, Inc., a health maintenance organization (“United Healthcare” or “the HMO”), which complied with the provisions of §641.315, Fla. Stat. (2001). It was entitled “Hospital Participation Agreement between United Healthcare of Florida, Inc., and Hospital Board of Directors of Lee County d/b/a Lee Memorial Hospital (sic) System,” dated March 23, 1999, effective June 1, 1999; and “Amendment to the Hospital Participation Agreement between United Healthcare of Florida, Inc., and Hospital Board of Directors of Lee County d/b/a Lee Memorial Health System, dated September 18, 2000, effective October 1, 2000 (hereafter collectively called either “Hospital Participation Agreement” or “the provider contract”).

During Miss Giddes’ hospitalizations, Lee Memorial confirmed that she was an eligible subscriber under the provider contract between Lee Memorial and United Healthcare. On or about June 26, 2001, Lee Memorial obtained from United Healthcare treatment authorization code #1549101476 verifying that Miss Giddes was covered by United Healthcare for treatment at Lee Memorial Hospital, Cleveland Campus. On June 28, 2001, Lee Memorial contacted United Healthcare and obtained further authorization for in-patient stay for Miss Giddes. On September 24, 2001, Lee Memorial contacted United Healthcare and obtained further authorization for further hospitalization of Miss Giddes.

Miss Giddes and Lee Memorial entered into “Payment of Benefits/Contract to Pay” agreements (“admissions contracts”) for her hospitalizations of June 28, 2001, through August 6, 2001, and September 21, 2001, through October 22, 2001. These admission contracts, among other things, purport to assign to Lee Memorial payment of “all insurance benefits from all existing insurance policies, which are payable by reason of any services rendered within the Lee Memorial Health System.”

At all times material hereto, Allstate Insurance Company provided $20,000.00 in bodily injury liability insurance coverage to its insureds, Cristie D. Barnett and William Rodney Barnett, under Policy No. 081093162, as owners of the motor vehicle in which Miss Giddes was a passenger in the accident of June 24, 2001. On or about July 19, 2001, Allstate Insurance Company tendered its bodily injury liability insurance limits of $20,000.00 to Miss Giddes in full settlement of her claims against Allstate’s insureds, Cristie D. Barnett and William Rodney Barnett.

Allstate Insurance Company likewise provided a total of $200,000.00 in uninsured motorist insurance coverage to Miss Giddes as an insured under an automobile liability insurance policy issued by Allstate Insurance Company to Miss Giddes’s father, Bruce Giddes, as Policy No. 091082303. As an uninsured motorist insurance carrier, Allstate Insurance Company waived its subrogation rights against Cristie D. Barnett and William Rodney Barnett, and granted permission to Miss Giddes to accept the bodily injury liability policy limits offer of $20,000.00 from Allstate on behalf of its insureds, the Barnetts.

On or about July 19, 2001, Allstate Insurance Company, as Miss Giddes’ uninsured motorist carrier, also tendered its uninsured motorist policy limits of $200,000.00 to Miss Giddes in full settlement of her claims under the terms of her father’s insurance policy.

Lee Memorial has received a total of $15,000.00 from Miss Giddes PIP and Medical Payments benefits with Allstate Insurance Company, and Lee Memorial has received a total of $5,000.00 from Miss Giddes’s Medical Payments benefits with Encompass Insurance (Glens Falls Insurance Company). The $20,000.00 received by Lee Memorial has been applied by Lee Memorial against its asserted lien for Miss Giddes’ hospitalization of June 24, 2001, to June 28, 2001.

The overarching issue on Miss Giddes’ Motion for Summary Judgment is whether or not Lee Memorial’s admissions contract and its statutory lien on insurance proceeds pursuant to Section 18, Chapter 00-249, Laws of Florida, Special Acts 2000, preempt, precede, override or otherwise supersede the Hospital Participation Agreement with Miss Giddes’ HMO and Sections 641.315(1) and 641.3154(1), Fla. Stat. (2000) (“Florida’s HMO Act”); more specifically, whether or not the legal collection tools at Lee Memorial’s disposal allow it to obtain maximum satisfaction for all of its customary charges by coordinating benefits payable to Miss Giddes from automobile liability insurance proceeds and Miss Giddes’ HMO.1

The court finds that the Hospital Participation Agreement and Florida’s HMO Act, as a matter of law, must, at least initially, prevail and preempt Lee Memorial’s admissions contract and its statutory lien; accordingly, Lee Memorial may not by-pass the Hospital Participation Agreement with United Healthcare and coordinate benefits between it and proceeds payable from automobile liability insurers.

The Hospital Participation Agreement between Lee Memorial and United Healthcare must be read in pari materia with the provisions of Florida’s HMO Act, and it is axiomatic that the terms of applicable statutes in existence at the time the Hospital Participation Agreement was entered into must be considered part of the contract.2

Section 641.315(1), Fla. Stat. (2000), states:

    Each contract between a health maintenance organization and a provider of health care services must be in writing and must contain a provision that the subscriber is not liable to the provider for any services for which the health maintenance organization is liable as specified in s. 641.3154.

Section 641.3154(1), Fla. Stat. (2000), reiterates:

    If a health maintenance organization is liable for services rendered to a subscriber by a provider, regardless of whether a contract exists between the organization and the provider, the organization is liable for payment of fees to the provider and the subscriber is not liable for payment of fees to the provider.

The text of these two statutes plainly and clearly tell us that, when a provider of health care services (Lee Memorial) and an HMO have a contract with one another for payment of fees for services, the HMO, not the subscriber, is liable for them.

Section 3 of the Hospital Participation Agreement, entitled “Duties of Hospital” is Section 3.2, entitled “Provision of Health Services” provides in part that:

    Hospital shall provide Health Services to all Members as Hospital’s staff and facilities permit and shall accept Members as new patients on the same basis as Hospital is accepting non-Members as new patients without regard to source of payment, race, religion, gender, color, national origin, age, or physical or mental health, or any other basis deemed unlawful under federal, state or local law.

This section contractually imposes upon Lee Memorial the duty to accept, as a patient, any eligible plan Member (e.g., Miss Giddes) who presents at one of its facilities in need of health care services. It therefore logically follows that Lee Memorial is bound by all terms and conditions of the provider contract, including Subsection 4.1 of Section 4 (“Payment Provisions”), which provides in part that:

    For the provision of Health Services to a Member, Payor shall pay Hospital the applicable amounts set forth in the attached appendices. The obligation for payment under this Agreement for Health Services rendered to a Member is solely that of Payor. . .

    Except as provided herein, Hospital shall accept as payment in full for Health Services rendered to Members such amounts as are paid by Payor pursuant to this Agreement and shall not bill Members for non-covered charges which result from Payor’s reimbursement methodologies. Except as provided herein , in no event shall Hospital bill a Member for the difference between Customary Charges and the amount Hospital has agreed to accept as full reimbursement under this Agreement. Hospital may collect Member Expenses from the Member. (emphasis added).

Subsection 4.2, entitled “Submission of Claims,” provides that:

    Hospital shall submit claims using current . . . forms, . . . Hospital shall include in a claim the Member number, Customary Charges for the Health Services rendered to a Member during a single instance of service, as applicable, Hospital’s federal tax identification number, and/or other identifiers requested by Plan. Hospital shall not bill the Member for Health Services if Hospital fails to submit claims in accordance with the above provisions. (emphasis added).

Reading Sections 3 and 4 together, Lee Memorial obligated itself to take Miss Giddes in as its patient and as a subscriber of United Healthcare, and to submit its claims to United Healthcare. In return United Healthcare would assume and pay all fees, according to a pre-determined fee schedule, for the services it agreed to cover, as set forth in the appendices attached to and made a part of the Hospital Participation Agreement.3 Lee Memorial would then accept these payments in full satisfaction for same and waive the difference between its customary charges and fees and the scheduled fees for all services covered by the provider contract.

Miss Giddes’ status as a limited debtor (for deductible, co-payments and non-covered services only) is further underscored by Section 4.5, which states in part:

    In no event, including but not limited to, non-payment by Payor for Health Services rendered to Members by Hospital, insolvency of Payor, or breach by Plan of any term or condition of this Agreement, shall Hospital bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against any Member or persons acting on behalf of the Member for Health Services eligible for reimbursement under this Agreement; provided however, that Hospital may collect from the Member any Member Expenses or charges for services not covered under the Member’s Benefit Contract. (emphasis added).

Notwithstanding the foregoing statutory and contractual language, Lee Memorial asserts its admissions contracts, together with the lien statute, give it the authority to coordinate insurance benefits; and accordingly is not bound to accept, and be limited by, the terms of its Hospital Participation Agreement with United Healthcare. In essence Lee Memorial claims it can opt out of the Hospital Participation Agreement, at least initially, in order to pursue its lien rights, and if necessary come back after exhausting all payment sources covered by its lien and bill the HMO for any recoverable services which have not been paid. While maximizing collection of all of a hospital’s customary fees and charges is a laudable goal, neither the admissions contract, the Hospital Participation Agreement, Lee Memorial’s lien statute, nor Florida’s HMO Act4 give Lee Memorial the authority to temporarily opt out of the Hospital Participation Agreement and use the HMO as a standby payor.5

Section 641.315(1), Fla. Stat., when first enacted, and ever since, has been silent on what specific effect this law would have upon the many existing special acts granting lien rights to hospitals such as Lee Memorial. In addition Lee Memorial’s most recent enactment of its lien statute in 2000, as well as all previous enactments, is silent about both the interplay between it and Florida’s HMO Act and coordination of benefits between liability insurers, health maintenance organizations and health insurers. The more logical inference to be drawn from this silence is that Florida’s Legislature perceives no obvious conflict or overlap between the two laws, which have co-existed for 13 years prior to June 24, 2001.6 The rules of statutory construction pertaining to two statutes touching upon the same general subject (e.g., collection of hospital charges), which neither defer to nor even make reference to one other, suggest that these statutes are either in harmony or running along separate but parallel tracks. Lee Memorial’s construction of these statutes, however, put them on an intersecting course, and by virtue of §19 of Chapter 00-439, Special Acts 2000 (providing that it controls over other acts in conflict with it), Sections 641.315(1) and 641.3154(1), Fla. Stat., must yield to its lien statute.

It is a court’s solemn duty to construe and interpret statutes so as to maintain harmony between and among various laws touching upon the same subject matter while at the same time giving to each its fullest intended effect. Palm Harbor Special Fire District v. Kelly, 516 So. 2d 249 (Fla. 1987). The court finds no express conflict or disharmony between these statutes. The subject matter of Lee Memorial’s lien statute is a grant of debt security through imposition of liens against certain proceeds payable to ill or injured debtor/patients and prescribing the methodology for perfecting same. Sections 641.315(1) and 641.3154(1), Fla. Stat., are liability-shifting statutes which remove debts from a patient who is a HMO subscriber to his or her health maintenance organization.7

The legislative intent underpinning hospital lien laws8 was expressed in Palm Springs Gen. Hosp., Inc. v. State Farm Mut. Auto. Ins. Co., 218 So.2d 793 (Fla. 3d DCA 1969), where the court stated:

    No lien is necessary against the injured patient as the usual channels of legal recourse are available against a solvent patient indebted to the hospital for services. The problem to which the Legislature addressed itself arises for the hospital when it is confronted with an insolvent patient whose treatment results in a mounting bill for expenses.

The legislative intent in enacting the Florida’s HMO Act is found in § 641.18, Fla. Stat., and states in part as follows:

    (1) Faced with the continuation of mounting costs of health care, coupled with the state’s interest in high-quality care, the Legislature has determined that there is a need to explore alternative methods for the delivery of health care services, with a view toward achieving greater efficiency and economy in providing these services.

    (4) It shall be the policy of this state to:

    (a) Eliminate legal barriers to the organization, promotion, and expansion of comprehensive prepaid health care plans.

Consequently, these statutes, although both dealing with payments to hospitals, serve different purposes. Lien statutes help hospitals collect charges from certain indebted patients who are unable to pay their hospital bills. Florida’s HMO Act prescribes a payment methodology which pays in full certain hospital bills on behalf of HMO subscribers. Miss Giddes is not unable to pay Lee Memorial’s bills for services covered by the Hospital Participation Agreement between it and her HMO because United Healthcare will pay them for her once it is billed. Arguably, she may not be able to pay the difference between Lee Memorial’s customary charges and the amount it agreed to accept from her HMO, but because Lee Memorial waived these excess charges, the lien is not in play as regards said amounts.

Furthermore, hospital lien laws pertain to debts owed the hospital by its patients, and it attaches to proceeds of suits, judgments, settlements, etc. payable on account of an illness or injury giving rise to the patient’s debt. A lien is a charge on property for payment of a debt.9 Where there is no underlying debt, there can be no valid lien.10 Schenck v. Taylor, 188 So. 2d 356 (Fla. 1st DCA 1966). Lee Memorial asserted its lien on settlement proceeds payable to Miss Giddes as security for all of its customary charges. The Hospital Participation Agreement states that Miss Giddes will not be legally indebted to Lee Memorial for any charges for services covered therein.11 Therefore, Lee Memorial has no lien for same because the underlying debt is extinguished.12

Consequently, the supremacy clause in Lee Memorial’s lien statute (§19, Chapter 00-439, Special Acts 2000) is not necessary to resolve the alleged conflict between it and §§ 641.315(1) and 641.3154(1), Fla. Stat., because there is none.

If any discord exists between them, it resounds from Lee Memorial’s claim to its implied right or privilege to coordinate benefits. Therefore, any apparent conflict between these statutes is not really found in the text or legislative intent of the statutes themselves, but in the way Lee Memorial relies upon them and deploys them.

Neither the admissions contracts, the Hospital Participation Agreement, nor §18 Chapter 00-439, Special Acts 2000, expressly grant to Lee Memorial the authority or entitlement to coordinate benefits.13 Nowhere in Florida’s HMO Act or in the provisions of the Florida Insurance Code that are incorporated therein14 is a hospital given the right to coordinate benefits. Lee Memorial is a health care provider, not a health maintenance organization. The right to coordinate benefits under § 627.635, Fla. Stat., clearly belongs only to insurers who are responsible for payment of hospital, medical or surgical expenses. With regard to hospital, medical and surgical expenses arising from health care services supplied to Miss Giddes following the June 24, 2001, accident, only United Healthcare is entitled to coordinate benefits.

Moreover, the court finds no implied authority in these various contracts and statutes entitling it to coordinate benefits.15

Lee Memorial further contends that Miss Giddes is not a third-party beneficiary to the Hospital Participation Agreement and has no rights to enforce same. Clearly she is.16 If, as here, hospitals were permitted to ignore their provider contracts, and then assert that the HMO, not the subscriber, is the proper party to file suit to enforce the provider contract, subscribers may never receive the benefit of their bargain with their HMO’s. Customarily and logically, an insurer does not sue for the privilege to pay claims they owe and contract law does not countenance a contract construction which leads to illogical or absurd results.

The only obligations assumed by Miss Giddes in the admissions contracts, and for which there were corresponding mutual obligations on the part of the Lee Memorial, are found in the “CONTRACT TO PAY” provisions. There, in exchange for Lee Memorial’s provision of services or treatment, Miss Giddes agreed she was “. . . obligated to pay all charges arising from the services or treatment rendered to the patient, which are not covered by insurance or other hospitalization benefits . . .” Since Miss Giddes was an inpatient on each occasion, she also agreed to pay Lee Memorial’s charges at the time of discharge, “. . . unless insurance, sufficient to pay the bill, has been verified by the insurance company.” Insurance coverage was verified by, and authorization for treatment was obtained from, Miss Giddes’ HMO for each of Miss Giddes’ hospitalizations. Therefore, she is liable to Lee Memorial for deductibles, co-payments and non-covered hospital services, but nothing more.

Finally, the court finds very persuasive the rulings of other Circuit Courts of Florida in similar cases which treated the interplay between hospital liens statutes, Florida’s HMO Act, admissions contracts and HMO provider contracts. South Broward Hospital District v. Gibson and Allstate Ins. Co., 8 Fla. L. Weekly Supp. 839; Slater v. Adventist Health Systems/Sunbelt, Inc., d/b/a Florida Hospital, Case No. CIO 98-5892, Ninth Judicial Circuit in and for Orange County, Florida. Based upon the reasoning in those cases, the outcome of this case and those cases should be the same.17 Other states have addressed the issue with the same or similar results.18

IT IS THEREFORE ORDERED AND ADJUDGED as follows:

As to Count I of the Plaintiff’s Second Amended Complaint, the Motion for Summary Judgment is granted with the following findings, conclusions and declarations:

(A) The admissions contracts, which are binding between the Plaintiff, TIFFANY NICOLE GIDDES, and the Defendant, Lee Memorial Health System, obligate her to pay only those charges not covered by insurance or hospitalization benefits.

(B) Said admissions contracts, as well as the Hospital Participation Agreement between Lee Memorial and United Healthcare, obligated Lee Memorial to bill Miss Giddes’ health maintenance organization, United Healthcare, once coverage was verified by the latter.

(C) By entering into the admissions contracts the Defendant, Lee Memorial Health System, waived its statutory liens for its full customary charges.

(D) Lee Memorial acted contrary to its contractual duties by refusing to submit for payment to United Healthcare its bills for Miss Giddes’ treatment.

(E) Miss Giddes is entitled to consummate the settlements with Allstate Insurance Company and accept the tendered settlement proceeds without regard to the claimed statutory liens because, had Lee Memorial acted consistently with its contractual duties, the lien would have been extinguished.

(F) Lee Memorial may be due monies for any deductibles, co-payments and non-covered services, and if uncollected, it is entitled to press its statutory lien for same, but because the current liens are for incorrect amounts, it will have to file new notices of lien.

(G) That this Court retains jurisdiction for the purpose of a trial on the issue of Miss Giddes’ damages and to award such other and further relief as the Court may deem just and proper.

As to Count II of the Plaintiff’s Second Amended Complaint, the Motion for Summary Judgment is granted with the following findings, conclusions and declarations:

(A) Under the Hospital Participation Agreement, a binding contract between the Defendant, Lee Memorial Health System, and United Healthcare of Florida, Inc., Plaintiff, Tiffany Nicole Giddes, is a subscriber and member thereof.

(B) As such Miss Giddes is a third party beneficiary of the Hospital Participation Agreement between Lee Memorial and United Healthcare, and is entitled to enforce its terms and provisions as it relates to the issues raised in her Second Amended Complaint.

(C) Lee Memorial, by entering into the provider contract with United Healthcare, agreed to and waived its right to collect for its full customary charges for Miss Giddes’ treatment and hospitalizations.

(D) The provisions of Sections 641.315 and 641.3154, Fla. Stat., govern the Hospital Participation Agreement and does not conflict with Lee Memorial’s lien statute, Section 18, Chapter 00-439, Laws of Florida, Special Acts 2000.

(E) By entering into the Hospital Participation Agreement, Lee Memorial obligated itself to accept as payment in full such amounts as were payable pursuant to Hospital Participation Agreement.

(F) Under the Hospital Participation Agreement, Lee Memorial also agreed that Miss Giddes would not be liable to it for any services for which United Healthcare was liable, and would not collect, or attempt to collect money from Miss Giddes for services for which United Healthcare was liable.

(G) Lee Memorial acted contrary to the Hospital Participation Agreement by its refusal to submit its bills for Miss Giddes’ treatment to United Healthcare for payment.

(H) Except as to applicable co-payments, deductibles or non-covered services, Lee Memorial’s only recourse for payment of its services is billing United Healthcare, pursuant to terms of the Hospital Participation Agreement.

(I) Because Lee Memorial has asserted its statutory liens for its full customary charges, the liens are invalidated by the provisions of Sections 641.315 and 641.3154, Fla. Stat., and the terms of the Hospital Participation Agreement; accordingly, since no valid lien exists at this moment, Lee Memorial may not collect, or apply as payment on account, Miss Giddes’ PIP and Medical Payments coverages of $20,000.00.

(J) Miss Giddes is therefore entitled to consummate the settlements with Allstate Insurance Company and accept the tendered settlement proceeds without regard to Lee Memorial’s statutory liens;

(K) The Court retains jurisdiction for the purpose of a trial on the issue of Miss Giddes’ damages and to award such other and further relief as the Court may deem just and proper.

As to Lee Memorial’s Counterclaim, the Motion for Summary Judgment is granted with the following findings, conclusions and declarations:

(A) All findings, conclusions and declarations previously made herein above which are material to the Counterclaim are incorporated herein.

(B) Lee Memorial is precluded by the provisions of Sections 641.315 and 641.3154, Fla. Stat., and by the terms of the Hospital Participation Agreement from pursuing its cause of action for the full customary charges covered, because once it collects for all covered services rendered, as it must contractually do, there remains no existing debt for same.

(C) Lee Memorial may pursue a cause of action to collect any unpaid and past due debts Miss Giddes may owe for deductibles, co-payments and non-covered services.

(D) The Court reserves jurisdiction to consider the matter of Miss Giddes’ attorneys fees, costs and expenses upon the filing of an appropriate motion.

__________________

1Lee Memorial wants to coordinate benefits by first have it invoking its lien rights, and then using the HMO as the last, or standby payor. This strategy optimizes Lee Memorial’s collection powers.

211 Fla. Jur. 2d, Contracts, § 174-176; Board of Public Instruction v. Bay Harbor Islands, 81 So.2d 637 (Fla. 1955); Wilcox v. Atkins, 213 So.2d 879 (Fla. 2d DCA 1968).

3Miss Giddes would be liable for deductibles, co-payments and non-covered services.

4Under §641.31(7), Fla. Stats., an HMO is entitled to coordinate benefits, but no similar provision is made for the participating medical provider (Lee Memorial).

5Even if Lee Memorial had “opt out” authority, it acted inconsistently with that authority when, pursuant to Section 3.1 of the Hospital Participation Agreement, it contacted the HMO two days after admission to get confirmation that she was a subscriber. This evidences Lee Memorial’s intent to opt in, not opt out. If hospitals throughout Florida with the same or similar lien laws can chart their own collection course as Lee Memorial did here, the court foresees potential havoc in both our health care system and our civil justice system.

6The first special act granting Lee Memorial a lien was passed in 1978. The liability limitations now contained in Section 641.315(1), Fla. Stat., was first passed in 1988. Section 17, Ch. 88-388, Law of Florida, 1988, and initially codified as Section 641.315(3), Fla. Stat.

7This works much the same as bank credit cards which shift a customer’s liability to a merchant from the customer to the issuing bank. The merchant collects a discounted amount in exchange for reliance upon the creditworthiness of the bank instead of the customer’s.

8See also Calder, Florida’s Hospital Lien Laws, 21 Fla. St. Univ. Law Rev. 341 (1993).

9Phillips v. Atwell, 76 Fla. 480, 80 So. 180 (Fla. 1918); Marshall v. S. S. Young Const. Co., 94 Fla. 11, 113 So. 565 (Fla. 1927); Case v. Texas Co., 115 Fla. 668, 156 So. 137 (Fla. 1934); and, 34 Fla. Jur. 2d, Liens §1.

10Lee Memorial cannot render Miss Giddes its debtor simply by not billing United Healthcare. Ignoring or putting off a contractual duty to make claims to the HMO does not change the relationship between Lee Memorial and either United Healthcare or Miss Giddes.

11When Lee Memorial entered into the Hospital Participation Agreement with United Healthcare and agreed to accept payment in full from United Healthcare under the terms of the Agreement, Lee Memorial waived its right to be a creditor of members of the HMO, except for applicable co-payments, deductibles and fees for non-covered services.

12The debt at this moment is not extinguished because Lee Memorial has not billed United Healthcare. Because the court has held that Lee Memorial is contractually bound to bill United Healthcare for all covered services, the mere fact that it has not done so does not entitle Lee Memorial to claim that the debt still exists.

13In addition Chapter 627, Fla. Stats., governing insurance rates and contracts, which among other things treats coordination of benefits, is silent about health care providers coordinating insurance benefits.

14§ 641.201, Fla. Stat., exempts HMO’s from other provisions of the Florida Insurance Code except those that are explicitly made applicable to HMO’s.

15Section 627.635(5), Fla. Stat., provides that coordination of benefits is not permitted against an indemnity-type policy. The Allstate insurance policies, over whose proceeds Lee Memorial has asserted its lien, are indemnity-type policies. Therefore, even if it could coordinate benefits, it could not coordinate benefits between health care coverages (e.g., United Healthcare) and automobile liability coverages (e.g., Allstate).

16Both parties well and thoroughly briefed this issue and the court agrees with the plaintiff’s analysis.

17The Federal Courts have reached similar conclusions in cases where Medicare patients were subjected to hospital lien laws for services and charges covered by Medicare. Holle v. Moline Public Hospital, 598 F. Supp. 1017 (D.C. Ill. 1984).

18See N.C. v. A.W., 713 N.E.2d 775 (Ill. App. 2 Dist. 1999); Richmond v. Caban, 2001 WL 973929 (Ill. App. 2 Dist. 2001); Dorr v. Sacred Heart Hosp., 597 N.W.2d 462 (Wisc. App. 1999).