Title: Foundation Health, Et Al. v. Westside Ekg Associates
Citation: N/A
Docket Number: SC05-870
State: Florida
Issuer: Florida Supreme Court
Date: October 26, 2006

Supreme Court of Florida 
 
 
________________________ 
 
Nos. SC05-870, SC05-871 & SC05-872 
________________________ 
 
FOUNDATION HEALTH, et al.,     
Petitioners, 
 
vs. 
 
WESTSIDE EKG ASSOCIATES,  
Respondent. 
 
 
HEALTH OPTIONS, INC., et al.,    
Petitioners, 
 
vs. 
 
WESTSIDE EKG ASSOCIATES,  
Respondent. 
 
 
HUMANA MEDICAL PLAN, INC., etc.,  
Petitioner, 
 
vs. 
 
WESTSIDE EKG ASSOCIATES,  
Respondent. 
 
[October 19, 2006] 
 
BELL, J. 
 
We have for review Westside EKG Associates v. Foundation Health, 932 
So. 2d 214 (Fla. 4th DCA 2005), in which the Fourth District Court of Appeal 
certified the following question to be one of great public importance: 
ARE THE PROMPT PAY PROVISIONS OF THE HEALTH 
MAINTENANCE ORGANIZATION ACT ENFORCEABLE BY 
COURTS IN AN ACTION FOUNDED ON PRINCIPLES OF 
BREACH OF CONTRACT BROUGHT AGAINST A HMO BY A 
SERVICE PROVIDER?  
Id. at 220.  We have jurisdiction,1 and rephrase the question as follows:  
MAY A MEDICAL SERVICE PROVIDER BRING A CAUSE OF 
ACTION FOR BREACH OF A THIRD-PARTY BENEFICIARY 
CONTRACT BASED ON ALLEGATIONS THAT THE HMO 
FAILED TO COMPLY WITH THE “PROMPT PAY PROVISIONS” 
OF THE HEALTH MAINTENANCE ORGANIZATION ACT?   
We answer the rephrased question in the affirmative.  A medical service provider 
may bring a cause of action as a third-party beneficiary to the contract between the 
health maintenance organization and its subscriber based on allegations that the 
health maintenance organization failed to comply with section 641.3155, Florida 
Statutes (2001), the “prompt pay provisions” of the Health Maintenance 
Organization Act.     
FACTS  
                                          
 
 
1.  See art. V, § 3(b)(4), Fla. Const. 
   
 
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On September 20, 2001, Westside EKG Associates (“Westside”)2 filed a 
complaint against seven health maintenance organizations (“HMOs”).  After the 
HMOs unsuccessfully attempted to remove the case to federal court, the case was 
returned to the Seventeenth Judicial Circuit Court in Broward County, where 
Westside filed an amended complaint that asserted three causes of action.  The 
only cause of action at issue before us is Westside’s common law claim for breach 
of a third party beneficiary contract.   
The amended complaint alleged that “the Defendants’ insureds [sic] 
members sought and received emergency and non-emergency medical services 
from [Westside] and its physicians under insurance/health maintenance policies.”  
Westside claimed it was a third-party beneficiary to “such insurance/health 
maintenance contracts,” and “[d]espite repeated demands,” the defendant-HMOs 
had breached this contract by, among other things, violating section 641.3155, 
Florida Statutes (2001), the “prompt pay provisions” of Florida’s Health 
Maintenance Organization Act (“HMO Act”), and sections 641.17-641.3923, 
Florida Statutes (2001).3  “As a direct and proximate result of such Breach of the 
                                          
 
 
2.  In its amended complaint, Westside described itself as a professional 
association and alleged that its physicians provide various types of echocardiogram 
(“EKG”) interpretations, as well as Doppler color flow interpretations, Holter 
twenty-four-hour interpretations, stress test physician supervision, and stress test 
interpretations.   
 
 
 
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Third Party Beneficiary Contracts,” Westside claimed it “suffered damages in the 
amount of outstanding balances for its charges for services, together with interest 
and reasonable attorneys fees and costs.”   
Section 641.3155 provides a time frame in which HMOs must respond to 
and pay claims properly submitted by medical service providers.  At the time 
Westside filed its complaint in 2001, the pertinent part of the statute read as 
follows:  
641.3155 Payment of Claims. –  
 
. . . .  
 
(2)(a)  A health maintenance organization shall pay any clean 
claim or any portion of a clean claim made by a contract provider for 
services or goods provided under a contract with the health 
maintenance organization or a clean claim made by a noncontract 
provider which the organization does not contest or deny within 35 
days after receipt of the claim by the health maintenance organization 
which is mailed or electronically transferred by the provider.   
 
(b)  A health maintenance organization that denies or contests a 
provider’s claim or any portion of a claim shall notify the provider, in 
writing, within 35 days after the health maintenance organization 
receives the claim that the claim is contested or denied.  The notice 
                                                                                                                                        
3.  Although Westside’s count for breach of third-party beneficiary contract 
does not specifically mention section 641.3155, this count incorporated Westside’s 
general allegations concerning the prompt pay provision of section 641.3155, 
alleging that the HMOs failed to make payment or contest payment within forty-
five days.  Westside specifically alleged violations of section 641.3155 as well as 
section 627.613, Florida Statutes (2001), in the other two counts of its amended 
complaint.  Section 627.613 provides time periods in which health insurers must 
pay claims for medical services.  It imposes requirements similar to section 
641.3155; however, HMOs with a valid certificate of authority are excluded from 
the provisions of the Florida Insurance Code, unless expressly stated otherwise.  
See §§ 641.201, 641.30(2), Fla. Stat.  
 
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that the claim is denied or contested must identify the contested 
portion of the claim and the specific reason for contesting or denying 
the claim, and, if contested, must include a request for additional 
information.  If the provider submits additional information, the 
provider must, within 35 days after receipt of the request, mail or 
electronically transfer the information to the health maintenance 
organization.  The health maintenance organization shall pay or deny 
the claim or portion of the claim within 45 days after receipt of the 
information.  
 
(3)  Payment of a claim is considered made on the date the 
payment was received or electronically transferred or otherwise 
delivered.  An overdue payment of a claim bears simple interest at the 
rate of 10 percent per year.  Interest on an overdue payment for a 
clean claim or for any uncontested portion of a clean claim begins to 
accrue on the 36th day after the claim has been received.  The interest 
is payable with the payment of the claim.  
 
(4)  A health maintenance organization shall pay or deny any 
claim no later than 120 days after receiving the claim.  Failure to do 
so creates an uncontestable obligation for the health maintenance 
organization to pay the claim to the provider.  
. . . .   
(7)(a)  A provider[’s] claim for payment shall be considered 
received by the health maintenance organization, if the claim has been 
electronically transmitted to the health maintenance organization, 
when receipt is verified electronically or, if the claim is mailed to the 
address disclosed by the organization, on the date indicated on the 
return receipt.  A provider must wait 45 days following receipt of a 
claim before submitting a duplicate claim.  
 
. . . .  
 
(8)  A provider, or the provider’s designee, who bills 
electronically is entitled to electronic acknowledgement of the receipt 
of a claim within 72 hours.  
 
(9)  A health maintenance organization may not retroactively 
deny a claim because of subscriber ineligibility more than 1 year after 
the date of payment of the clean claim.  
 
(10)  A health maintenance organization shall pay a contracted 
primary care or admitting physician, pursuant to such physician’s 
contract, for providing inpatient services in a contracted hospital to a 
subscriber, if such services are determined by the organization to be 
 
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medically necessary and covered services under the organization’s 
contract with the contract holder.   
§ 641.3155, Fla. Stat. (2001).  In addition, this statute defined the term “clean 
claim,”4 imposed nearly reciprocal obligations on providers to respond to an 
HMO’s claim for overpayment, and required that the amount of overpayment be 
reconciled to specific claims unless the parties agree otherwise.  § 641.3155(1), 
(5)-(6), Fla. Stat. (2001). 5
The HMOs moved for judgment on the pleadings, which the trial court 
granted after conducting a hearing on the motion and a later status conference.  The 
trial court’s final judgment on the pleadings dismissed Westside’s amended 
complaint with prejudice because it did “not allege cognizable causes of action” 
under Villazon v. Prudential Health Care Plan, Inc., 843 So. 2d 842 (Fla. 2003).   
   
On appeal, the Fourth District Court of Appeal reversed the trial court and 
remanded the case for further proceedings.  Westside, 932 So. 2d at 220.  The 
                                          
 
 
4.  In essence, a “clean claim” is defined in section 641.3155(1), Florida 
Statutes (2001), as a claim submitted without any defect or impropriety and with 
the proper substantiating paperwork.  This term does not appear in the current 
version of section 641.3155, as the statute now defines a “claim” as the appropriate 
paper or electronic billing instrument.  § 641.3155(1), Fla. Stat. (2005).     
 
 
5.  Section 641.3155 has been amended numerous times since Westside filed 
its complaint in 2001.  We do not decide what effect, if any, these amendments 
may have on a party’s ability to establish the required elements of a breach of 
third-party beneficiary contract in its case.  However, none of these amendments 
affect the holding that medical service providers, in general, may bring this cause 
of action based on an alleged violation of the prompt pay provision.          
 
 
- 6 -
Fourth District held that Villazon was not “applicable to an action founded on a 
theory of breach of contract,” because, while Villazon denies the existence of a 
private cause of action under the HMO Act, it also “acknowledge[s] the plaintiff’s 
underlying right to bring a common law negligence claim based upon the same 
allegations.”  Id. at 216 (citing Villazon, 843 So. 2d at 852).  In assessing whether 
Westside has an available breach of contract claim, the Fourth District relied on the 
“accepted principle of law that when parties contract upon a matter which is the 
subject of statutory regulation, the parties are presumed to have entered into their 
agreement with reference to such statute, which becomes a part of the contract.”  
Id.   It then recognized that “[s]ervice providers are recognized as third party 
beneficiaries of insurance contracts in other contexts” and that an insurer’s failure 
to pay a medical service provider is a valid basis for a breach of contract action.  
Id. at 219 (citing Allstate Ins. Co. v. Kaklamanos, 843 So. 2d 885 (Fla. 2003)).  
Based on this analysis, the Fourth District ultimately “conclude[d] that service 
providers, claiming as third party beneficiaries under a subscriber’s contract, may 
bring an action founded on the HMOs’ failure to comply with the prompt pay 
provisions of the [HMO] Act.”  Id. at 220.  “Recognizing the potential impact of 
this decision on the [HMO] industry,” the Fourth District certified the above stated 
question as one of great public importance.  Id.   
 
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We agree with the Fourth District.  As we explain below, medical service 
providers may bring a breach of contract action as a third-party beneficiary of the 
contract between the HMO and its subscriber based upon the HMO’s failure to 
comply with section 641.3155, Florida Statutes (2001). 
ANALYSIS  
I. 
Framework for Review   
The question at issue requires us to interpret the HMO Act, particularly 
section 641.3155, its “prompt pay provisions;” therefore, the standard of review is 
de novo.  See Aramark Unif. & Career Apparel, Inc. v. Easton, 894 So. 2d 20, 23 
(Fla. 2004) (recognizing that questions of statutory interpretation are reviewed de 
novo).   
The HMO Act does not expressly authorize a private cause of action to 
enforce its provisions.  However, as the Fourth District correctly observed, “[t]his 
does not . . . preclude the right to bring a common law . . . claim based upon the 
same allegations.”  Villazon, 843 So. 2d at 852, cited in Westside, 932 So. 2d at 
216; see also Greene v. Well Care HMO, Inc., 778 So. 2d 1037, 1041-42 (Fla. 4th 
DCA 2001) (finding that the HMO Act does not authorize a private cause of 
action, but permitting appellants to amend their complaint to state a common law 
cause of action based on the HMO’s allegedly improper action).   
 
- 8 -
In this case, Westside has asserted the breach of a third-party beneficiary 
contract.  Assuming the complaint sufficiently alleges each of the four elements of 
this cause of action,6 we must decide (1) whether the “prompt pay provisions” of 
the HMO Act can be incorporated into the contract between the HMO and its 
subscribers, and (2) whether Westside’s status as a nonparticipating provider 
precludes it, as a matter of law, from establishing that the contracting parties had a 
“clear or manifest intent” to benefit Westside.  We conclude that, given the 
significant statutory regulation surrounding HMO contracts and the integral role 
the “prompt pay provisions” play in them, section 641.3155 may be incorporated 
into the HMO contract.  Then, recognizing that medical service providers 
previously have been considered intended beneficiaries of insurance contracts 
under Florida law, we extend the same recognition to HMO contracts.  In essence, 
we conclude that unless the language of the specific contracts properly provides 
                                          
 
 
6.  For the purpose of this appeal, we do not determine whether Westside’s 
complaint sufficiently pled each of the elements required to state this cause of 
action.  See Caretta Trucking, Inc. v. Cheoy Lee Shipyards, Ltd., 647 So. 2d 1028, 
1031-32 (Fla. 4th DCA 1994) (providing the elements that must be pleaded to state 
a cause of action for breach of third-party beneficiary contract and granting the 
plaintiff an opportunity to amend its complaint to explicitly allege the primary and 
direct intent element); see also Weimar v. Yacht Club Point Estates, Inc., 223 So. 
2d 100, 103 (Fla. 4th DCA 1969) (“[I]t behooves one seeking to establish a cause 
of action as a third party beneficiary to sufficiently allege the terms and provisions 
of the contract which he asserts was made for his benefit.  Failure to do so may 
result in dismissal of the cause . . . .”).  We assume, arguendo, that Westside has 
stated a cause of action and recognize that the trial court may address this issue on 
remand.   
 
- 9 -
otherwise, Westside’s status as a nonparticipating provider does not preclude it, as 
a matter of law, from establishing the intent element in a breach of third-party 
beneficiary contract claim.  These conclusions are explained in more detail below.    
A.  Elements of Breach of a Third-Party Beneficiary Contract Claim 
As the Fourth District correctly held, an allegation that an HMO violated the 
“prompt pay provisions” is not sufficient by itself to establish a private cause of 
action.  Westside, 932 So. 2d at 216 (citing Villazon, 843 So. 2d at 852).  Instead, a 
party must bring a recognized common law cause of action.  As stated earlier, one 
of the claims Westside attempted to plead in its amended complaint was a common 
law cause of action for breach of a third-party beneficiary contract.  
To establish an action for breach of a third party beneficiary contract, 
Westside must allege and prove the following four elements: “(1) existence of a 
contract; (2) the clear or manifest intent of the contracting parties that the contract 
primarily and directly benefit the third party; (3) breach of the contract by a 
contracting party; and (4) damages to the third party resulting from the breach.”  
Networkip, LLC v. Spread Enters., Inc., 922 So. 2d 355, 358 (Fla. 3d DCA 2006) 
(citing Biscayne Inv. Group, Ltd. v. Guar. Mgmt. Servs., Inc., 903 So. 2d 251, 254 
(Fla. 3d DCA 2005).  While we decline to decide from the limited record on appeal 
whether Westside’s complaint is sufficient to establish each of these elements, we 
find no support for the HMOs’ assertion that Westside is precluded as a matter of 
 
- 10 -
law from pursuing such a cause of action.  See A.R. Moyer, Inc. v. Graham, 285 
So. 2d 397, 402 (Fla. 1973) (“Without viewing the [contract at issue], which is 
absent from the record, we are unable to speculate if a cause of action would 
exist.”).  As the Fourth District correctly concluded, section 641.3155 can be 
incorporated into the HMO contract.  Such an incorporation supports the first and 
third elements of the claim.  Moreover, there is no basis to conclude that Westside 
is precluded, as a matter of law, from establishing the second element because of 
its status as a nonparticipating provider.     
B.  
Statutory Incorporation 
As stated earlier, we conclude that section 641.3155 (the “prompt pay 
provisions”) may be incorporated into an HMO contract for the purpose of 
establishing a breach of contract cause of action when the provider’s claim is for a 
service the HMO is required to provide under either the HMO Act or the HMO 
contract at the time the claim is filed.   
Florida courts have long recognized that the statutory limitations and 
requirements surrounding traditional insurance contracts may be incorporated into 
an insurance contract for purposes of determining the parties’ contractual rights.  
See Citizens Ins. Co. v. Barnes, 124 So. 722, 723 (Fla. 1929) (finding an ordinance 
is “part of the contract of insurance” because there was no reason not to apply the 
“general doctrine that, where parties contract upon a subject which is surrounded 
 
- 11 -
by statutory limitations and requirements, they are presumed to have entered into 
their engagements with reference to such statute, and the same enters into and 
becomes a part of the contract”); see also Weldon v. All Am. Life Ins. Co., 605 So. 
2d 911, 914 (Fla. 2d DCA 1992) (applying the general principle to determine the 
extent to which a chiropractor’s services were covered under an insurance policy).  
As are traditional insurance contracts, HMO contracts are surrounded by the 
extensive “statutory limitations and requirements” of the HMO Act.  Therefore, for 
purposes of statutory incorporation, HMO contracts should be treated the same as 
traditional insurance contracts.  See Pasteur Health Plan, Inc. v. Salazar, 658 So. 2d 
543, 544 (Fla. 3d DCA 1995) (upholding a trial court’s decision that used five 
Florida statutes to define a term in an HMO contract, and quoting U.S. Fid. & 
Guar. Co. v. Group Health Plan of Se. Mich., 345 N.W.2d 683, 685 n.1 (1983), for 
the proposition that “[a]lthough . . . HMOs are not (traditionally defined) insurance 
companies, . . .  the same contract construction rules apply”).  So treated, the 
principles of statutory incorporation permit the “prompt pay provisions” of section 
641.3155 to be considered an implicit part of every HMO contract.  Cf. State Farm 
Fire & Cas. Co. v. Palma, 629 So. 2d 830, 832 (Fla. 1993) (finding a provision of 
the Florida Insurance Code was an “implicit part of every insurance policy issued 
in Florida” because the statute addressed a subject that was present in every 
 
- 12 -
insurance dispute and because another provision of the Florida Insurance Code 
supported incorporating this statute).       
  Admittedly, the HMO Act does not mandate that section 641.3155 be 
included in HMO contracts.  Nonetheless, as a number of other provisions reveal, 
the “prompt pay provision” serves an integral role in providing substance or 
structure to the rights of subscribers and the responsibilities of HMOs established 
in the HMO Act.  For example, section 641.3154 states that an HMO “is liable for 
services rendered to an eligible subscriber by a provider if the provider follows the 
[HMO]’s authorization procedures and receives authorization,” § 641.3154(2); and 
that if an HMO is liable for services rendered, “regardless of whether a contract 
exists between the [HMO] and the provider . . . the subscriber is not liable for 
payment of fees to the provider.”  § 641.3154(1).  Section 641.3156(1) requires 
HMOs to pay “any hospital-service or referral-service claim for treatment for an 
eligible subscriber which was authorized” by an appropriate person and in an 
appropriate manner.  In fact, “[a] claim for treatment may not be denied” in this 
situation, “unless the provider provided information to the [HMO] with the willful 
intention to misinform the [HMO].”  § 641.3156(2).   The details set forth in the 
“prompt payment provision,” section 641.3155, provide essential substance to the 
HMO’s liability for services rendered to its subscribers. 
 
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Moreover, the HMO Act does not foreclose a common law contract action 
for breach of the statutorily imposed prompt payment provision.  Indeed, the HMO 
Act contemplates actions “to enforce the terms and conditions of a[n] [HMO] 
contract,” and it recognizes that these actions may be brought against an HMO.     
§ 641.28 (recognizing that attorney’s fees are available to the prevailing party in a 
civil action “brought to enforce the terms and conditions of a health maintenance 
organization contract,” and not including HMOs in the list of exempt persons); see 
also § 641.282 (requiring HMOs to pay “every judgment or decree entered in any 
of the courts of this state against” the HMO within a specified time frame).  In 
addition, even the statute authorizing the statewide provider and managed care 
organization dispute resolution program (which was enacted in 2000 to address 
payment disputes) does not bar civil actions to enforce the HMO contract.  See      
§ 408.7057, Fla. Stat. (2001).  To the contrary, this statute forbids the resolution 
organization from reviewing certain claims disputes, such as those “related to 
interest payment[s],” and those that either fail to meet a specified jurisdictional 
amount or form “the basis for an action pending in state or federal court.”              
§ 408.7057(2)(b)(1), (6).  Neither this statute nor the HMO Act provides that the 
dispute resolution program is the exclusive means of addressing these claims.   
Here, the statutory language recognizing that a civil cause of action may be 
brought to enforce the HMO contract is particularly persuasive.  HMOs enter into 
 
- 14 -
these contracts “to provide an agreed-upon set of comprehensive health care 
services to subscribers in exchange for a prepaid [fee].”  § 641.31(1).  As stated 
earlier, section 641.3155 simply provides essential details of how the HMOs are to 
pay medical providers for these services.  In light of this, it is difficult to see how 
any HMO could enter into such contracts without assuming that the “prompt 
payment provision” is implicit therein.   
Given the above, we conclude that unless the terms of the individual HMO 
contract or the HMO Act properly provides otherwise, section 641.3155 may be 
incorporated as a term in the HMO contract for the purpose of alleging a breach of 
third-party beneficiary contract claim.   
C.  
Clear Intent to Primarily and Directly Benefit      
Having concluded that the “prompt pay provisions” may be incorporated 
into the HMO contract, we next consider whether nonparticipating providers like 
Westside can overcome the significant hurdle of establishing the second element of 
a breach of third-party contract; that is, whether the HMO contract evinces a “clear 
or manifest intent” to “primarily and directly benefit” the provider.  Jenne v. 
Church & Tower, Inc., 814 So. 2d 522, 524 (Fla. 4th DCA 2002) (citing Marianna 
Lime Prods. v. McKay, 147 So. 264, 265 (Fla. 1933), for the proposition that the 
test to determining whether a party is a third-party beneficiary to a contract is 
whether the contract language indicates that both parties intended that the contract 
 
- 15 -
“primarily and directly” benefit the third party).  We find no basis to preclude 
nonparticipating providers from attempting to establish this element as a matter of 
law.  As recognized by the Fourth District, Florida law recognizes medical service 
providers as intended beneficiaries of insurance contracts.  See Vencor Hosps. v. 
Blue Cross Blue Shield of R.I., 169 F.3d 677, 680 (11th Cir. 1999) (applying 
Florida law to determine that medical service providers are third-party 
beneficiaries to a contract between a health insurer and its subscriber); see also 
Orion Ins. Co. v. Magnetic Imaging Sys. I, 696 So. 2d 475, 478 (Fla. 3d DCA 
1997) (“Medical service providers . . . have been recognized as third party 
beneficiaries of insurance contracts.”).  Within the limitations of our holding, we 
extend this same recognition to the HMO context.  
This recognition of medical services providers as third-party beneficiaries of 
HMO contracts is supported by statutory requirements.  The HMO Act requires 
that the HMO contract indicate an intent to compensate nonparticipating providers 
for at least “emergency services and care.”  See § 641.31(4), Fla. Stat. (requiring 
that a subscriber’s contract “clearly state all of the services to which a subscriber is 
entitled under the contract and . . . where and in what manner the comprehensive 
health care services may be obtained”); § 641.513(3)(a) (requiring HMOs to 
“compensate the provider for emergency services and care”).  The Act also 
prohibits an HMO from waiving this benefit in the contract, and it states that 
 
- 16 -
contractual provisions which contradict this provision must be construed in 
accordance with the Act.  See § 641.31(11) (“No contract shall contain any waiver 
of rights or benefits provided to or available to subscribers under the provisions of 
any law or rule applicable to health maintenance organizations.”); § 641.3105(1) 
(contracts or portions thereof that do not comply with the HMO Act “shall be 
construed and applied” as if they complied).  Since part of Westside’s complaint 
alleges the right to recover compensation for emergency services and care, 
Westside may be able to allege and establish that the language of the contract 
evinces “the clear or manifest intent of the contracting parties that the contract 
primarily and directly benefit” Westside.  Networkip, LLC, 922 So. 2d at 358; cf. 
Vencor Hospitals, 169 F.3d at 680 (finding medical service providers were 
intended beneficiaries because “[i]t would be hard to imagine a more direct benefit 
under a contract than the receipt of large sums of money”).     
Furthermore, recognizing nonparticipating medical service providers as 
third-party beneficiaries is supported by a contract clause the HMOs referred to in 
their brief on appeal.7  In applicable part, the clause states:  
For services rendered by Non-Participating Providers, Benefits are 
payable to the [subscriber] or other person as required by law.  
However, [the HMO] may pay all or a portion of any medical Benefits 
to the Health Care Provider on whose charge the claim is based unless 
                                          
 
7.  See Initial Br. of Foundation Health Plan at 5; Amicus Br. of Florida 
Association of Health Plans at 16. 
  
 
- 17 -
the Covered Person directs otherwise in writing by the time proofs of 
loss are filed with [the HMO].   
Like the language analyzed in Vencor Hospitals, 169 F.3d at 680, this clause grants 
the HMO discretion to pay nonparticipating providers for services rendered to the 
HMOs’ insureds.8  In Vencor Hospitals, the Eleventh Circuit viewed this discretion 
as evidence that the contracting parties intended to primarily and directly benefit 
the medical provider.   Id.  Moreover, the differences between the clause in this 
case and the language cited in Vencor Hospitals do not require a different 
conclusion.  While the clause grants insureds the authority to remove the HMOs’ 
discretion, the HMOs do not allege that the insureds have done so in regard to any 
of Westside’s claims.  Furthermore, this excerpt also requires HMOs to pay “other 
person[s] as required by law,” and under the HMO Act, even nonparticipating 
providers may be persons entitled to payment by law.  See, e.g., § 641.3155(4) 
(recognizing that an HMO’s failure to pay or deny “any claim no later than 120 
days after receiving [it] . . . creates an uncontestable obligation”).   Therefore, 
contrary to the HMOs’ assertion, this clause actually appears to support Westside’s 
                                          
 
 
8.  The contract language evaluated in Vencor Hospitals stated that 
“[b]enefit payments may be paid to the doctor, hospital or to [the insured] directly 
at our discretion.”  169 F.3d at 680.   
 
 
- 18 -
allegation that it is an intended third-party beneficiary to the HMO contracts with 
respect to at least some of its claims.9  
 
Based on the foregoing, we conclude that nonparticipating providers such as 
Westside are not precluded as a matter of law from alleging and establishing that 
the HMO contract evinces a “clear and manifest intent” to “primarily and directly 
benefit” them. 
CONCLUSION  
 
For the reasons explained above, we answer the certified question as 
rephrased in the affirmative.  Accordingly, we approve the decision of the Fourth 
District Court of Appeal and remand this case for further proceedings.   
 
It is so ordered. 
LEWIS, C.J., and WELLS, ANSTEAD, PARIENTE, and QUINCE, JJ., concur. 
CANTERO, J., recused. 
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND 
IF FILED, DETERMINED. 
 
 
Three Cases Consolidated: 
 
Application for Review of the Decision of the District Court of Appeal - Certified 
Great Public Importance  
 
 
Fourth District - Case Nos. 4D03-3533 and  4D03-4837 
(Broward County) 
                                          
 
 
9.  To the extent other clauses in the individual HMO contracts evince a 
contrary intent, this is a determination we leave to the trial court.   
  
 
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Craig J. Trigoboff and Glenn Jerrold Waldman of Waldman, Feluren, Hildebrant 
and Trigoboff, P.A., Weston, Florida, 
 
 
for Petitioners Foundation Health, A Florida Health Plan, Inc., and Vista 
Health Plan, Inc. f/k/a HIP Health Plan of Florida, Inc. 
 
Nancy W. Gregoire, W. Edward McIntyre, and Daniel Alter of Bunnell, Woulfe, 
Kirschbaum, Keller, McIntyre and Gregoire, P.A., Fort Lauderdale, Florida, 
 
 
for Petitioners Health Options, Inc. and Health Options Connect, Inc. f/k/a 
Principal Health Care of Florida, Inc. 
 
Andrew S. Berman of Young, Berman, Karpf and Gonzalez, P.A., North Miami 
Beach, Florida, 
 
 
for Petitioner Humana Medical Plan, Inc. 
 
Philip M. Burlington of Burlington and Rockenbach, P.A., West Palm Beach, 
Florida, Jeffrey M. Liggio and Jene P. Williams of Liggio, Benrubi and Williams, 
P.A., West Palm Beach, Florida, and Edward H. Zebersky of Zebersky and Payne, 
LLP, Hollywood, Florida, 
 
 
for Respondents Westside EKG Associates 
 
Dorothy F. Easley and Steven M. Ziegler of Steven M. Ziegler, P.A., Hollywood, 
Florida, on behalf of America’s Health Insurance Plans; George N. Meros, Jr. and 
Jason L. Unger of GrayRobinson, P.A., Tallahassee, Florida, on behalf of Florida 
Association of Health Plans; Edward J. Pozzuoli and Stephanie Alexander of Tripp 
Scott, P.A., Fort Lauderdale, Florida, on behalf of Florida Hospital Association, 
the Florida College of Emergency Physicians, the Florida Medical Association, 
and the American Medical Association; and Bradley Winston, Plantation, Florida, 
Rochelle Bobroff and Michael Schuster, AARP Foundation Litigation, 
Washington, DC, on behalf of AARP, 
 
 
for Amici Curiae 
 
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