11 Fla. L. Weekly Supp. 563c
Insurance — Personal injury protection — Claim for magnetic resonance imaging services by medical provider which performed technical component of MRI and paid radiologist to perform professional interpretive component of MRI — It is not unlawful for provider that owns or leases 100% of equipment to hire radiologist as independent contractor to perform professional component of MRI and globally bill for both components — Fee-splitting — Patient brokering — Relationship between plaintiff and radiologist is not unlawful brokering or fee-splitting
AXCESS MRI, (as assignee of Johnny Edwards), Plaintiff, v. NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, a foreign corporation, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 2003-CC-5616, Division CC-O. April 23, 2004. Ronald P. Higbee, Judge. Counsel: Vincent P. Gallagher, The Gallagher Law Firm, Jacksonville; Kevin J. Loftus, for Plaintiff. Steven M. Brady, for Defendant.
ORDER ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
This matter came before the court on the defendant’s Motion for Summary Judgment regarding the plaintiff’s legality of billing globally for MRI services when the plaintiff hires independent contractors to perform the Professional Component. The facts are not in dispute.
1. Plaintiff’s assignee, Johnny Edwards, the patient, presented at Plaintiff Axcess MRI of Jacksonville (hereinafter “Plaintiff”) for an MRI of the brain on March 10, 2003.
2. Axcess MRI of Jacksonville performed the technical component of the MRI by creating MRI films of the brain.
3. Axcess sent MRI films to a Dr. Marc A. Engel in Miami to interpret and report.
4. Following the interpretation of these films by Dr. Marc A. Engel, Plaintiff submitted a global bill to Defendant Nationwide Mutual Fire Insurance Company (hereinafter “Defendant”) for CPT code 70551, which charged Defendant for both the technical and professional components of the MRI. This bill was in the amount of $1,977.72.
5. Within thirty days Defendant responded with an Explanation of Benefits form, denying payment of the global bill and inviting Plaintiff to either bill only for the technical component of the MRI or to produce documentation showing that Dr. Engel was employed by Plaintiff. Plaintiff then filed suit against Defendant for breach of Defendant’s insurance contract with Plaintiff’s assignee.
6. Dr. Marc A. Engel was the radiologist who interpreted the MRI films taken of the assignee/patient Johnny Edwards. Dr. Engel interpreted the MRI films of the assignee/patient Johnny Edwards in Dr. Engel’s Miami office. The MRI films of Johnny Edwards were taken at Plaintiff’s MRI facility in Jacksonville, Florida. Consequently, only Dr. Marc A. Engel actually provided the professional component of the services at issue.
7. Plaintiff paid Dr. Marc A. Engel $70.00 for his interpretation of the MRI films at issue pursuant to a contract that Plaintiff has with Dr. Engel.
8. Dr. Marc A. Engel conducts his business in Miami-Dade County and not at Plaintiff’s facility.
9. Plaintiff pays Dr. Marc A. Engel’s compensation of $70.00 to read the MRI films.
10. Dr. Engel is provided a 1099 at the end of each year.
11. Dr. Engel is permitted to and does work for other diagnostic clinics.
12. Plaintiff does not exert authority or control over the manner in which Dr. Engel performs his services.
13. Plaintiff does not provide Dr. Engel with fringe benefits, such as health insurance or vacation pay.
14. Plaintiff does not provide Dr. Engel with any materials, supplies or computers to perform the interpretation of the films. Plaintiff provides Dr. Engel only with the MRI films of the patient and the patient history.
15. Dr. Engel, the interpreting physician, is an independent contractor and not an employee of Plaintiff.
16. The Health Insurance Claim form for date of service March 10, 2003, the date of service at issue, was filled out in the following manner: in Box 17, CPT code 70551 was billed globally; in Box 31, Dr. Marc A. Engel’s name was typed; and in Box 33 Axcess MRI of Jacksonville was typed.
The medical necessity of the brain MRI is not at issue, rather Defendant’s position is that Axcess did not “render” the professional component in that Axcess contracted with a radiologist, who was not an Axcess employee, to perform the professional component. The radiologist employment status is not at issue as both parties agree that the interpreting radiologist was an independent contractor who signed a contract with Axcess to perform the professional component, i.e., the MRI interpretation.
In evaluating this controversy, this court is keenly aware of the Florida Supreme Court commandment regarding PIP litigation: “The purpose of the no-fault statutory scheme is to provide swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption”. Ivey v. Allstate Ins. Co., 774 So.2d 679 (Fla. 2000)
In the instant case, Axcess MRI transmitted the MRI images via the internet to Miami, where a radiologist, who had executed a contract specifying his duties and compensation to Axcess, performed the reading of the MRI film and issued the report. The radiologist was paid regardless of any compensation paid to Axcess.
In Radiology B & Services, Inc., v. Progressive Express Insurance Company, Broward County, Case 02-14779 COCE(54) (September 2003) [10 Fla. L. Weekly Supp. 935a] the court found nothing unlawful about the MRI provider billing for both the technical and professional component of the MRI, despite hiring an independent contractor to perform the professional component. Radiology involved a case with similar facts as the one before this court. The MRI provider owned or leased the equipment and contracted with a board-certified radiologist to perform the professional interpretation of the MRI. The board-certified radiologist was paid on a 1099 basis by the MRI service. The MRI provider globally billed Progressive for both the technical and professional components. Progressive declined to pay the professional component as the board-certified radiologist was not Plaintiff’s employee. The court held for Plaintiff based on two different theories.
First, as expressed in Professional Consulting Services, Inc. v. Hartford Life and Accident Insurance Company, 849 So.2d 446 (Fla. 2d DCA 2003), a corporation who is not a physician, hospital, clinic or other person lawfully rendering treatment to an insured person as set forth in Florida Statute section 627.736(5)(a) is eligible to receive payment of PIP benefits for services provided by a health care provider so long as the insured has validly assigned his or her benefits to the corporation seeking payment.
In Professional, a billing company filed suit against Hartford for PIP benefits. Hartford moved to dismiss since Professional was not a medical provider. The court certified to the 5th DCA the following question: “Whether a corporation that is not a physician, hospital, clinic or other person or institution lawfully rendering treatment to an insured person for bodily injury covered by personal injury protection benefits, as set forth in Florida Statute section 627.736(5)(a) is entitled to recover PIP benefits for services provided by a healthcare provider pursuant to a valid assignment from the insured under Florida Statute section 627.736?” The court answered in the affirmative.
In the instant case, it is undisputed that Axcess accepted Edward’s assignment which stated: “The patient hereby assigns to Axcess MRI all benefits under any insurance policy, health plan, workers’ compensation or other third party payer liable to the patient, in consideration for services rendered by Axcess MRI”. (see assignment) To the extent that Axcess rendered treatment, then Axcess is entitled to PIP benefits. Only Axcess had the assignment for MRI treatment. The independent radiologist located in Miami did not possess an assignment of benefits.
Whether or not the MRI provider rendered the professional component is the second theory discussed by the Radiology court. The Radiology court admits that “rendering treatment” is not defined within the statute. The court states:
Webster’s defines “render” as “1. to cause to be or become; make; 2. to do; perform; 3. to furnish; provide.” There is nothing in the definition of the word “render” that supports Progressive’s assertion that Plaintiff did not “render” MRI services within the meaning of Florida Statute section 627.736(5)(a) because Dr. Rivera (the interpreting doctor) was paid on a 1099 basis.
As in Radiology, it is not unlawful for Axcess to utilize independent contractors to perform the professional component. The radiologist signed a contract with Axcess and agreed to the conditions put forth by Axcess in exchange for a guaranteed payment from Axcess for each reading of the MRI films.
A Palm Beach County court also agreed that an MRI center which owns or leases the equipment may globally bill and employ independent contractors for the professional component. In Ack-Ten Group LL d/b/a Seacrest Open MRI v. Progressive Express Insurance Company, Palm Beach County, Case 2003CC005563RL (October 2003), the same issues were presented. Plaintiff, Seacrest, owned or leased the equipment and performed a MRI on the insured. Plaintiff then hired Dr. Kleinman, a board-certified radiologist associated with Boca Radiology, to interpret the scans. Plaintiff paid Boca Radiology for the services at the same rate regardless of the method of payment by the patient. Plaintiff agreed to provide the billing for the interpretive aspect and bill the global fee. The court first determined that the arrangement was neither fee splitting nor brokering contrary to Florida Statute sections 627.732, 817.505 or 458.331. The court found nothing illegal in what was done and in fact was authorized by statute and found for the Plaintiff.
Florida Statute section 627.732 provides definitions for use throughout the PIP statute. Most notable in the 2002 changes was the inclusion of the definition of “broker”. The statute clearly defines “broker” and this court is satisfied that those issues are not involved in this case. Axcess MRI owns or leases 100% of the MRI equipment and has an outside contract with a radiologist to perform the professional component. The court finds it not unusual in the growing world of PIP litigation that the smallest component, professional, is the source of this controversy. For instance, PIP reimbursement of MRI expenses is predicated on the Medicare fee schedule: Florida Statute section 627.736:
5. Effective upon this act becoming a law and before November 1, 2001, allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services shall not exceed 200 percent of the allowable amount under medicare Part B for year 2001, for the area in which the treatment was rendered. Beginning November 1, 2001, allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services shall not exceed 175 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001.
The MRI at issue is a CPT code 70551 which is listed on the medicare B chart for a global charge of $511.58. This amount is meant to compensate for both the technical and professional component for those billing Medicare B. The amount is further itemized by a code of 70551-TC for the technical component and 70551-26 for the professional component. The technical component is compensated at $431.89 and the professional component at $79.69 which together exactly total the amount for the global bill, $511.58. Under the above PIP statute, these amounts would be multiplied by either 200% or 175%.
A review of Florida Statute section 736.627 manifests that it is not unlawful for a MRI facility that owns or leases 100% of the equipment to hire a radiologist as an independent contractor to perform the professional component.
Florida Statute section 458.331 details actions by medical providers that will lead to disciplinary action. In particular, section 458.331(1)(i) states:
(I) Paying or receiving any commission, bonus, kickback, or rebate, or engaging in any split-fee arrangement in any form whatsoever with a physician, organization, agency, or person, either directly or indirectly, for patients referred to providers of health care goods and services, including, but not limited to, hospitals, nursing homes, clinical laboratories, ambulatory surgical centers, or pharmacies. The provisions of the paragraph shall not be construed to prevent a physician from receiving a fee for professional consultation services.
Applying this statute to the instant case, Axcess MRI is paying the radiologist for the professional component of the MRI scan. This appears to be allowed by the last sentence allowing compensation for professional consultation services. In addition, Axcess MRI is not paying the professional fee for any type of referral. There is no evidence in the file to indicate that any of the Axcess MRI patients were referred by the interpreting radiologist. In fact, the uncontroverted evidence showed that the interpreting radiologists were all located in the Dade County area, while Axcess MRI is located in Duval County. Therefore, it is clear that Florida Statute section 458.331 does not make unlawful for Axcess MRI to bill globally yet pay the interpreting radiologist as an independent contractor.
The next statutory inquiry is whether Florida Statute section 817.505 makes it unlawful for Axcess MRI to pay an independent contractor to provide the professional component. Florida Statute section 817.505 states:
Patient brokering prohibited; exceptions; penalties.
(1) It is unlawful for any person, including any health care provider or health care facility, to:
(a) Offer or pay any commission, bonus, rebate, kickback, or bribe, directly or indirectly, in cash or in kind, or engage in any split-fee arrangement, in any form whatsoever, to induce the referral of patients or patronage from a health care provider or health care facility;
(b) Solicit or receive any commission, bonus, rebate, kickback, or bribe, directly or indirectly, in cash or in kind, or engage in any split-fee arrangement, in an form whatsoever, in return for referring patients or patronage to a health care provider or health care facility;
(3) This section shall not apply to:
(c) Payments to a health care provider or health care facility for professional consultation services.
Once again, the legislature established a provision for “professional consultation” in the Edwards case, the interpreting radiologist is providing the professional component of the MRI scan. It is clear that the arrangement between Axcess MRI and the interpreting radiologist, who is an independent contractor, does not amount to fee splitting.
A review of Florida Statutes does not provide the court with any indication that the legislature intended to forbid MRI companies from contracting with independent radiologists to provide the professional component.
The court does believe that it would be better practice to advise the insurance company of the arrangement when the bill is submitted either on the HCFA form or by way of an explanatory cover letter; however, the failure to do so is not fatal to the plaintiff’s claim. Oakland Park Open MRI, Inc. (Elizabeth Biscardi) v. Progressive Express Insurance Company, Broward County Case No. 02-005416 (49) (September 25, 2003) [10 Fla. L. Weekly Supp. 1040a].
The court therefore concludes that it is not unlawful for an MRI facility to hire independent contractors to perform the professional component and to globally bill for both technical and professional components to a PIP insurer.
In consideration of the above and foregoing, it is
ORDERED AND ADJUDGED that the defendant’s Motion for Summary Judgment is denied.
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