In Shenandoah Chiropractic, P.A. v. National Specialty Ins. Co., 2007 WL 4276531 (S.D. Fla. Dec. 3, 2007), the United States District Court for the Southern District of Florida recently dismissed a class action complaint, seeking declaratory relief and alleging breach of contract in relation to a claim for Personal Injury Protection (“PIP”) benefits.

The Plaintiff chiropractic clinic brought suit as assignee of its patient, the insured, claiming that the defendant insurer breached its insurance contract by using a computer program that adjusted PIP reimbursement amounts based upon an undisclosed, predetermined percentile. The Plaintiff brought its claim as a class action, seeking a class-wide declaration that this method of evaluating the reasonableness of a medical provider’s charges violated the terms of the insurance contract.

In 2003, the Legislature added a pre-suit notice requirement to Florida’s PIP statute, §627.736, Florida Statutes. A medical provider must submit a demand letter that contains information described in the statute before filing suit. The insurer has 15 days within which to pay any overdue amounts, and thereby avoid a lawsuit, or contest the claim. Sending the notice is a condition precedent to filing a lawsuit for PIP benefits.

In Shenandoah Chiropractic, the Southern District dismissed the Plaintiff’s class action complaint finding that: (i) it could not issue a declaration on the issue of the insurer’s internal method of gauging the “reasonableness” of a medical provider’s bills; and (ii) the statute's pre-suit notice requirements Florida’s PIP statute could not be satisfied on a class-wide basis. Only the allegations associated with the Plaintiff’s breach of contract claim survived.

As previously reported here, Florida’s PIP statute was scheduled to expire on October 1, 2007. The statute did in fact expire as scheduled. However, the Florida legislature subsequently reenacted it during special session, effective January 1, 2008.