MGA Insurance Granted Summary Judgment in PIP Staged Accident Case

November 22, 2013

In an August 15, 2013 decision in Miami-Dade County Court, Defendant MGA Insurance Co. was granted Summary Judgment against Plaintiff Febre’s Medical Center on the grounds that no genuine issue of material fact existed, and Defendant was entitled to Final Judgment as a matter of law.

Plaintiff Febre’s Medical Center received reimbursements from Defendant MGA under the Florida PIP statute for treatment rendered at its clinic. Plaintiff rendered this treatment as part of a scheme to defraud Defendant and other insurance companies through the use of “staged accidents.” On June 28, 2013, the owners of Febre’s Medical, Hernandez and Baceiro, entered into factual proffers with the State Attorney’s Office. The proffers acknowledged that they submitted fraudulent insurance claims and were the true owners of Febre’s Medical.

In order for Febre’s Medical’s bills to be compensable under the PIP statutes, Febre’s must substantially comply with all Florida Statutes. F. S. §627.732(11). Under F.S. §627.736(5)(b)(1), an insurer is not required to pay a claim “for any service or treatment that was not lawful at the time rendered.”

In this case, Plaintiff was issued a clinic exemption. In order to receive an AHCA clinic exemption, the facility must be “wholly owned” by one or more physicians. F.S. § 400.9905(f). It was established, however, pursuant to the proffer, that non-physician individuals, Hernandez and Baceiro, were the true owners of Febre’s Medical. Although all the licensing and corporate materials were in the name of either a physician or a chiropractor, Hernandez and Baceiro handled all aspects of the business and retained the bulk of the proceeds. Thus, they were deemed to be the true owners of the clinic. Because, therefore, Febre’s Medical was not “wholly owned by a physician,” as required by the PIP statute, its services were performed in violation of Florida statutes. For this reason, Defendant is not required to pay Febre’s Medical’s claims. F.S. §627.736(5)(b)(1).

Final judgment was entered in favor of Defendant MGA Insurance Company.

The case is Febre’s Medical Center vs. MGA Insurance Co., No. 09-10008 CC 26 (3) (Fla. Miami-Dade Cty. Ct. 2013).