12 Fla. L. Weekly Supp. 754b
Insurance — Personal injury protection — Coverage — Medical expenses — MRI — Claimant which did not perform any service to or for insureds other than billing for services that were contracted out was not entitled to recover PIP benefits for services allegedly provided to insureds — Claimant concealed fact that it was billing for services performed by other companies and/or independent contractors when it checked “no” in box 20 of HCFA form indicating that no outside lab was used — Claimant knowingly submitted HCFA forms requesting direct payment from insurer for professional component of MRI services in excess of the maximum amount permitted by statute — Insurer was not furnished with notice of a covered loss for bills where bills were not truthfully and accurately completed in accordance with statute and HCFAs — Intentional misrepresentations in any part of claim voids all coverage for claims — Further, by accepting irrevocable assignment of benefits, claimant became third-party beneficiary of insurance contract, and was bound by terms and conditions of policy — Intentional misrepresentations violated policy’s misrepresentation provision and, accordingly, claimant was not entitled to any benefits under assignment of benefits — Claimant was proprietary clinic and was required by statute to register and have a medical director, and insurer is entitled to recover all amounts paid during period when claimant was not in compliance with statute — Claimant could not recover directly from insurer when it presented or caused to be presented HCFA form that was not signed in box 31 by health care provider certifying that services were actually rendered and medically necessary — Term “render” as used in section 627.736 requires that person who executes box 31 of HCFA and submits HCFA claim form must be the medical provider/supplier to have actually physically performed the medical services or directly supervised the performance of such services, and a clinic may not under this statute subcontract or retain another corporation or independent contractor to perform these services — Fee arrangement between claimant and interpreting physician’s company contemplated impermissible fee-splitting arrangement — Insurer may recover payments made to claimant, together with post judgment and prejudgment interest
RADIOLOGY & NEUROLOGY CONSULTANTS, INC., (Sinodas Joseph, Patient), Plaintiff, vs. PROGRESSIVE CONSUMERS INSURANCE COMPANY, Defendant. PROGRESSIVE EXPRESS INSURANCE COMPANY, a Florida corporation; PROGRESSIVE AUTO PRO INSURANCE COMPANY, a Florida corporation; PROGRESSIVE CONSUMERS INSURANCE COMPANY, a Florida corporation; and PROGRESSIVE AMERICAN INSURANCE, a Florida corporation, (f/b/o its INSUREDS, as identified in Exhibit “A”), Counter-Plaintiffs, vs. RADIOLOGY & NEUROLOGY CONSULTANTS, INC., a Florida corporation, (a/a/o of its patients), Counter-Defendant. Circuit Court, 17th Judicial Circuit in and for Broward County. Case No. CACE-04-04201, Division 14. February 9, 2005. Jeffrey E. Streitfield, Judge. Counsel: Tammy B. Denbo and Donald J. Masten, Rissman, Weisberg, Barrett, Hurt, Donahue & McLain, P.A., Tampa.SUMMARY/FINAL JUDGMENT
THIS CAUSE having come before this Court on the 9th day of Feb., 2005, on Defendant’s Motion for Summary/Final Judgment, and the Court being fully advised in this cause:
IT IS THE FINDING OF THIS COURT THAT:
1. PROGRESSIVE issued policies of insurance that provided Personal Injury Protection (“PIP”) to its INSUREDS listed in Exhibit “A” of Defendant’s Counterclaim. The INSUREDS were involved in various motor vehicle accidents, and sought treatment from various medical doctors and/or chiropractors (hereinafter referred to as “PROVIDERS”).
2. PROVIDERS prescribed MRIs to be performed on the INSUREDS at USA Diagnostics, Inc. (hereinafter “USA”). Both Radiology and Neurology Consultants, Inc. (hereinafter “RNC”) and USA were owned and operated by Nate Hollander.
3. USA allegedly performed the technical component. USA “sent” the MRIs to RNC to be interpreted. RNC hired other companies or independent contractors to perform the professional component. RNC did not employ any physicians.
4. RNC submitted HCFAs for each of PROGRESSIVE’s INSUREDS. RNC billed PROGRESSIVE $675.00 for reading each MRI. RNC paid the interpreting physician/physician’s clinic Thirty-five dollars ($35.00) to Fifty dollars ($50.00) per read. PROGRESSIVE paid all claims without knowledge of the relationship between RNC and the other corporations and/or independent contractors. The other corporations/independent contractors allowed RNC to markup their services and bill PROGRESSIVE in exchange for RNC’s referral of MRI films/patient.
5. Box 20 of the HCFAs indicates that no outside lab was used. RNC billed for services performed by other companies and/or independent contractors. RNC concealed this fact when it checked “no” in box 20. Based on the admission, RNC failed to properly complete box 20, thereby barring recovery on the claim. Based on the false HCFA submitted by RNC to PROGRESSIVE, PROGRESSIVE is unable to determine which services RNC actually performed and which services RNC contracted out.
6. PROGRESSIVE paid $29,206.95 dollars to RNC for services since August 30, 2001. The HCFAs RNC sent to PROGRESSIVE were sent with an irrevocable assignment of benefits.
7. PROGRESSIVE relied on RNC’s claim information as being true and correct.
8. RNC did not perform any service to or for the INSUREDS other than billing for services that were contracted out. RNC misrepresented the identity of the entity performing the professional components of the MRIs to the INSUREDS, whether an outside lab was involved, misrepresented the Tax ID number of the company performing the services inflating the cost of the service and/or submitted HCFA 1500 forms and medical reports on behalf of the INSUREDS containing misleading statements. RNC had actual knowledge of the interpreting physician/interpreting physician’s company that performed the professional component of the MRIs on PROGRESSIVE’s INSUREDS.
9. RNC is not entitled to recover PIP benefits for services allegedly provided to PROGRESSIVE’s INSUREDS because RNC did not perform necessary medical services and is not a physician, hospital, clinic, or other person lawfully rendering treatment. There is no provision under the PIP policy or Florida Statutes which allows for payment of benefits to third parties who did not perform medical services.
IT IS THE FURTHER FINDING AND HOLDING OF THIS COURT THAT:
I. ALLOWABLE AMOUNTS THAT MAY BE CHARGED
RNC knowingly submitted HCFAs requesting direct payment from PROGRESSIVE for the professional component of MRI services in excess of the maximum amount permitted by Florida Statutes §627.736(5)(b)(5). Florida Statutes §627.736(5)(b)(5) identifies the maximum amount chargeable for MRI services rendered to insureds. RNC’s submission of HCFAs seeking an amount in excess of the allowable fee schedule violated the plain meaning of Florida Statutes §627.736(5)(b)(5) , which provides in pertinent part:
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. . .
The HCFAs submitted by RNC on behalf of PROGRESSIVE’s insureds were not in compliance with Florida Statutes §627.736(5), and as such, were not properly payable.
Since RNC failed to identify if an outside lab was used, the location where the services were performed and because RNC charged an amount in excess of the fee schedule, PROGRESSIVE had to rely on RNC’s representations and guess as to whether the charges amounted to properly payable rates for MRI services for the geographical area where the tests were actually performed1.
Since RNC violated Florida Statutes §627.736(5)(b)(5) by charging an amount in excess of the fee schedule, PROGRESSIVE was not provided proper notice of a covered loss within the thirty (30) day time period2 and RNC is barred from pursuing claims for the services allegedly rendered, from PROGRESSIVE and its insureds.
II. FALSE MISLEADING AND DECEPTIVE HCFA
A health care provider who presents, or causes to be presented, a HCFA3 containing false, misleading, incomplete, or deceptive information to an insurance company, knowing that the information is false, misleading, incomplete or patently deceptive, or when the healthcare provider/supplier acts in deliberate ignorance of the truth, falsity or completeness of the information, or acts in a reckless disregard of the truth, falsity or completeness of the information contained within the HCFA, may not recover any personal injury protection benefits pursuant to Florida Statutes §627.736.
Fraud, within the healthcare arena, (including both Florida Statutes §490.913 and §627.736), means an intentional deception or misrepresentation made by a person with the knowledge that the deception results in unauthorized benefits to herself or himself or another person. The term includes any act that constitutes fraud under applicable federal or state law.
PROGRESSIVE has not been furnished with notice of a covered loss for bills unless the bills are truthfully and accurately completed in accordance with Florida Statutes §627.736, and the HCFA instructions.
The HCFAs submitted by RNC were intentionally false, misleading and deceptive because the representations and omissions contained in boxes 12, 13, 20, 24, 31, 32 and 33 were materially false, misleading and deceptive.
RNC knew the material statements were false. Any intentional material misrepresentation on any portion of the claim, as a matter of public policy voids the entire claim. As a matter of public policy, RNC’s intentional misrepresentations in any part of the claim, voids all coverage for RNC’s claims.
III. MISREPRESENTATIONS UNDER THE POLICY
In addition, by accepting an irrevocable assignment of benefits, RNC became a third party beneficiary of the insurance contract and was bound by the terms and conditions of the policy4. RNC’s intentional misrepresentations violated the policy’s misrepresentation provision. Consequently, RNC was not entitled to any benefits under the assignment of benefits.
A physician who 1) delegates his/her duties and authorizes someone to sign his/her name on a CMS 1500 form; 2) who turns a blind eye toward the truthfulness of the information contained on the CMS 1500 form; and 3) benefits from the submission of a false claim is presumed to have acted with the intent to have the false claim submitted5 and is precluded from any recovery under the policy6.
A doctor’s purposeful ignorance is prima facia evidence of willfulness. Knowingly making a false statement includes active and positive knowledge as well as statements made with deliberate disregard of the truthfulness or with a conscious purpose to avoid learning the truth.
IV. CLINIC REGISTRATION/DUTIES OF MEDICAL DIRECTOR
RNC is a proprietary clinic and is not eligible to be incorporated under Florida Statutes Chapter 6217. RNC was a clinic under Florida Statutes §456.0375, and was required to register and have a medical director. The medical director must perform his/her statutory duties under Florida Statutes §456.0375 in order for the services to be properly payable pursuant to Florida Statutes §627.736. Failure of the medical director to perform his statutory duties renders the services not compensable pursuant to Florida Statutes §627.736.
RNC did not substantially comply with Florida Statutes §456.0375. Between October 1, 2001 and March 8, 2002, RNC did not have a medical director. Between March 8, 2002 and March 26, 2003, RNC appointed a medical director; however, the individual appointed did not have knowledge that he was the appointed medical director and did not perform any of the duties required of a medical director outlined in Florida Statutes §456.0375.
Between March 26, 2003 and April 23, 2003, RNC failed and/or refused to appoint a medical director or clinic director. After the resignation of a medical director, the clinic cannot continue to operate, without first obtaining a new medical director.
Any pending claims submitted by RNC for services allegedly rendered by RNC between October 1, 2001 and April 23, 2003 were/are not properly payable. PROGRESSIVE is entitled to recover all amounts paid during said time period.
V. FAILURE TO CERTIFY THAT SERVICES WERE RENDERED
The HCFA 1500 form instructions require that the physician or supplier sign box 31 of the HCFA. The term “certify” as used in box 31 of the HCFA, means to attest to being true8. It is an affirmation of the truthfulness and accuracy of the information contained within the HCFA. A provider who signs box 31 of the HCFA certifies that the test was medically necessary and either personally performed or performed by his/her employee under his/her direct immediate personal supervision9. Box 31 of most of the HCFAs were typically left blank or indicated that there was a signature on file. The plain meaning of the verb “sign” means to affix a signature or to ratify or attest by hand or seal. RNC cannot lawfully refuse to certify that it performed the services by not properly completing box 31 of the HCFA. Failure to sign box 31 of the HCFA precludes a claim under Florida Statutes §627.736.
A health care provider cannot recover directly from an insurer under Florida Statutes §627.736 when it presents or causes to be presented a HCFA that is not signed in box 31 of the CMS 1500 form by the health care provider certifying that the services were actually rendered and medically necessary.
RNC’s HCFAs were legally insufficient to place PROGRESSIVE on notice of a loss or the amount of same. PROGRESSIVE is entitled to recover all amounts paid since July 6, 2000.
VI. RENDERING DEFINED
The term “rendering” as used in Florida Statutes §627.736 requires that the person who executes box 31 of the HCFA and submits the HCFA claim form must be the medical provider/supplier to have actually physically performed the medical services or directly supervised the performance of the services10. Under Florida Statutes §627.736, a clinic may not subcontract or retain another corporation or independent contractor to perform these services.
VII. FEE SPLIT
The fee arrangement between RNC and the interpreting physician’s company contemplated an impermissible fee split. RNC merely subcontracted the professional component. The contracting company allowed RNC to bill for the services in exchange for the referral of patients. This fee split arrangement violated Florida Statute §817.505 and consequently, RNC failed to lawfully render any services, and is not entitled to any payments for its services.11
IT IS HEREBY ORDERED AND ADJUDGED THAT:
PROGRESSIVE, recovers from Radiology & Neurology Consultants, Inc. the sum of $29, 206.95 on principal, that shall bear interest at the rate of seven percent (7.0%) a year, and in addition PROGRESSIVE shall recover prejudgment interest of $3,462.90, for which let execution issue.
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1RNC billed for services in Broward County that were actually performed in Dade County.
2See Florida Statute §627.736
3The HCFA claim form is intended to provide the insurer with the information necessary to determine whether the treatment provided to the insured is a covered claim.
4PROGRESSIVE’s policy states “We may deny coverage for an accident or loss if you or an insured person have knowingly concealed or misrepresented any material fact or circumstance, or engaged in fraudulent conduct, in connection with the presentation or settlement of a claim.” Under Florida law, a corporation is a person.
5See Darrell Wayne Hale v. State of Florida, 838 So.2d 1185 (5th DCA 2003).
6In addition, the services were not lawfully rendered as required by Florida Statutes §627.732 and §817.234
7Under Florida law, a “clinic” can only lawfully provide medical services if it is incorporated under Florida Statutes Chapter 621, if it is solely owned and operated in the physician’s own name, or his or her own registered fictitious name, or if it has properly registered with the Department of Health under Florida Statutes §456.0375.
8Certify is defined in Florida Statutes §627.732.
9Furthermore, a health care provider/supplier who “certifies” Box 31 of the HCFA attests that he/she performed the services and to the following:
a. [t]he services shown on this form were medically indicated and necessary for the health of the patient and were personally furnished by me or were furnished incident to my professional service by my employee under my immediate personally supervision . . . For services to be considered as “incident” to a physician’s professional service;
b. they must be rendered under the physician’s immediate personal supervision by his/her employee;
c. they must be an integral, although incidental part of a covered physician’s service;
d. they must be of kinds commonly furnished in physician’s offices; and the services of non-physicians must be included on the physician’s bills.
10In order to supervise a service, it must be lawful for the supervisor to lawfully provide the service.
11In Regional MRI of Orlando, Inc. v. Nationwide Mutual Fire Insurance Company, 29 Fla. L. Weekly D2355b, (5th District October 22, 2004), the 5th D.C.A. held that the professional component of the services may only be subcontracted out where that provider has actually performed the technical component of the diagnostic test. This case indicates the court’s opinion that a company may not contract out the professional component of the test and mark up the services, charging in excess of what the interpreting company would have charged. In the instant case, RNC did not perform the technical component, and it merely subcontracted out the professional component, and charged in excess of what the interpreting company would have charged. Consequently, a company that did not actually perform the service, cannot merely submit a bill in its own name on behalf of another company and charge in excess of the allowable amounts that may be charged pursuant to the PIP Statute.
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