Opinion ID: 1588435
Heading Depth: 3
Heading Rank: 2

Heading: Statutory Incorporation

Text: 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, 98 Fla. 933, 124 So. 722, 723 (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 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., 131 Mich.App. 268, 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 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. 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 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.