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

Heading: Clear Intent to Primarily and Directly Benefit

Text: 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, 109 Fla. 275, 147 So. 264, 265 (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 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 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 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 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.