14 Fla. L. Weekly Supp. 226a

Insurance — Personal injury protection — Fee splitting — Patient brokering — Where medical provider paid same rent for use of MRI facility’s space and equipment every month irrespective of amount of actual use, lease provided that rental payments were consistent with fair market value without regard to volume or value of referrals between parties, provider was prohibited by lease from using MRI facility on anyone other than own patients, MRIs were performed by personnel of MRI facility but under direct supervision of provider, and additional amount charged by provider above actual MRI cost was charge for performance of MRI, not referral fee, there was no basis on which trial court could find fee splitting or patient brokering arrangement, and court did not err in denying insurer’s motion for summary judgment on issue — Notice of claim — HCFA forms — Notation of “signature on file” in box 31 of HCFA forms did not constitute misrepresentation where provider’s name was on forms, and provider actually rendered services claimed — Errors and omissions in HCFA forms did not result in lack of proper notice of claims where statute in effect at time forms were sent did not require that forms be filled out in entirety, omissions were not misrepresentations and, at most, information in forms was erroneous or incomplete — No merit to argument that contractual arrangement between provider and MRI facility violates public policy by violating Patient Brokering Act where evidence demonstrates that provider did provide MRI services and did not receive payment for only referring patients to facility

STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Appellant, v. PETER J. GODLESKI, M.D., P.A., Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. CVA1 04-49. Consolidated Case Nos. CVA1 04-50, CVA1 04-51, CVA1 04-52, CVA1 04-53, CVA1 04-54, CVA1 04-55, & CVA1 04-56. November 21, 2006. Appeal from the County Court for Orange County, C. Jeffery Arnold, Judge. Counsel: Robert A. Kingsford, Kingsford & Rock, P.A., Maitland, for Appellant. V. Rand Saltsgaver, Law Offices of V. Rand Saltsgaver, Orlando; and Glenn Klausman, Altamonte Springs, for Appellee.

(Before THORPE, GRINCEWICZ, and WATTLES, JJ.)

FINAL ORDER AFFIRMING FINAL SUMMARY JUDGMENTS

(PER CURIAM.) This appeal consists of eight consolidated appellate cases and a twenty-four volume record. Appellant State Farm Mutual Automobile Insurance Co. timely appealed final summary judgments entered by the trial court. This Court has jurisdiction pursuant to section 26.012(1), Florida Statutes, and Florida Rule of Appellate Procedure 9.030(c)(1). We dispense with oral argument. Fla. R. App. P. 9.320.

This consolidated appeal involves eight different PIP cases regarding MRIs administered between August 12, 1999, and November 16, 2000. Each MRI was administered by Peter J. Godleski, M.D., the sole practitioner of the Peter J. Godleski, M.D., P.A. group (“Appellee”) for eight patients injured in separate automobile accidents. The MRIs were performed at 51 West Kaley Street, at the Imaging Center of Orlando. At the time, Appellee leased the MRI equipment, technical personnel, and space at the Imaging Center of Orlando on Thursdays from 5 p.m. to 6:30 p.m.

Appellee entered into the lease agreement with U.S. Diagnostics, who owns the Imaging Center of Orlando, for the MRI equipment and associated space at 51 West Kaley Street. Appellee had exclusive use of the equipment and associated space during those hours, and pursuant to its contract, Appellee could not refer any patients for MRIs to the 51 West Kaley office but its own during that time frame. Appellee had sole responsibility for providing its own physician to interpret the MRI scans and processing the billing. Appellee paid a flat fee of $3,900.00 per month for the equipment and space, regardless of whether his office had MRIs scheduled or not. Appellee and U.S. Diagnostics agreed that “Rental payments hereunder are consistent with fair market value without regard to the volume or value of referrals between the parties as otherwise required and defined pursuant to 42 U.S.C. § 1395nn.” (R. 3622.) Appellee assumed all billing responsibility for the MRIs, but maintenance of the equipment and technician salaries were the responsibility of U.S. Diagnostics. The Imaging Center personnel were under the direct supervision of Godleski during the time Godleski leased the facility, pursuant to the lease agreement. Appellee also maintained an occupational license for the 51 West Kaley Street location.

The normal procedure for Appellee was that if a patient of Dr. Godleski needed an MRI, his Rosewood office would schedule an appointment for the 51 West Kaley office. It was Dr. Godleski’s practice to observe the MRIs of his patients at 51 West Kaley, while the MRI technician employed by U.S. Diagnostics actually ran the equipment under Dr. Godleski’s supervision. Dr. Godleski would observe the scans as they were administered, and frequently, Dr. Godleski discussed the results with the patient immediately after the scan was complete. There was no evidence that Dr. Godleski attempted to offer direction to a MRI technician during a scan, though Dr. Godleski had the capacity to do so. Dr. Godleski would then take the billing information and scans for the MRI completed at 51 West Kaley to the Rosewood office, and his Rosewood office would send the HCFA forms to the appropriate insurance company. Appellee globally charged $1,250.00 per MRI scan, including the technical and professional components of the scan.¹ In addition to reviewing the scans himself, Dr. Godleski paid radiologists for a precautionary second opinion on each scan. The radiologists’ fees were paid by Appellee and not charged to the patients or their insurers.

Due to Appellee’s failure to fill in boxes 17, 31, 32, and 33 of the HCFA forms to Appellant’s satisfaction, Appellant questioned whether Appellee was acting as a patient broker and therefore, did not lawfully render the services. This doubt was due in part because there was no address entered for where the MRIs were conducted, and Appellant knew that there was no MRI equipment at the billing address location.

Appellant refused in almost every case to pay Appellee for the MRI scans, but in the case of one patient, a check for $500.00 was issued to the Imaging Center for the technical aspect of the MRI scan as well as a check for $250.00 to Appellee for the professional aspect, even though the HCFA was not complete. Every non-MRI bill submitted from Appellee to Appellant for each of the eight insureds had similarly incomplete HCFA forms, but those bills were paid. However, Appellant determined the HCFA forms for the MRI claims were significantly lacking. Specifically, Appellant complained about the following issues regarding the HCFA forms submitted by Appellee:

1. Box 17, requesting the “name of referring physician or other source” was left blank.

2. Box 20, which asks “outside lab?” was checked “no;”

3. Box 32, requesting the name and address of the facility where the services were provided, if done other than at the home or office, was left blank on some of the HCFA forms;

4. On other HCFA forms, “51 W. Kaley Street,” was inserted in Box 32; and

5. Box 31, requesting the physician’s signature, contained the typewritten phrase, “signature on file,” on most of the HCFA forms.

Appellant moved for summary judgment, asserting that due to the alleged misrepresentations and erroneous information on the HCFA forms, it did not receive proper notice of a covered claim. Appellant argued that this negated Appellee’s right to recover under the Florida No Fault laws. The trial court denied this motion for summary judgment.

Appellant also moved for summary judgment on the basis that Appellee was engaged in an unlawful patient brokering or fee-splitting arrangement. Reasoning that there was no difference between the case at hand and a situation where the doctor leases MRI equipment that is housed in the doctor’s main office, the trial court denied this motion for summary judgment as well. The trial court then entered summary judgments for Appellee.

Appellant filed this appeal asking the Court to reverse the final summary judgments and remand to the trial court to enter final summary judgments in favor of Appellant on these issues. Review of an appeal of a final summary judgment is de novo. Clay Elec. Coop., Inc. v. Johnson, 873 So. 2d 1182, 1185 (Fla. 2003); Krol v. City of Orlando, 778 So. 2d 490, 491 (Fla. 5th DCA 2001).

Appellant argues that “Godleski, P.A. was an MRI broker engaged in an illegal fee splitting arrangement with the Imaging Center . . . for the tests at issue in these consolidated cases.” (Initial Br. at 14.) Due to this alleged fee splitting arrangement, Appellant asserts that it does not owe Appellee PIP benefits for the MRIs that were performed.

Pursuant to section 817.505, Florida Statutes, it is unlawful for a health care provider or facility to engage in any kind of fee splitting arrangement in order to induce patient referrals from another health care provider or facility. § 817.505(1)(a), Fla. Stat. (1999). Similarly, a provider may not enter split-fee arrangements in return for a patient referral to another provider or facility. § 817.505(1)(b), Fla. Stat. (1999). Though a criminal statute, it is relevant to the discussion of whether treatment is lawfully rendered, and therefore compensable by the PIP provider. Med. Mgmt. Gr. of Orlando, Inc. v. State Farm Mut. Auto. Ins. Co., 8 Fla. L. Weekly Supp. 361a (Fla. 9th Cir. Ct. Mar. 12, 2001).

Thus, the first determination for the Court is whether Appellee engaged in a fee splitting arrangement with the Imaging Center. Appellant argues that a fee split arrangement is evidenced by Appellee billing Appellant $1,250 per MRI, when the approximate actual cost of an MRI to Appellee is $562.50. Appellant characterizes the difference as “additional compensation for referring patients to the Imaging Center . . . .” (Initial Br. at 17.)

The evidence before the trial court and this Court is that Appellee paid the same rent every month, whether he used the Imaging Center several times or not at all. In the lease, Appellee and U.S. Diagnostics agreed that “Rental payments hereunder are consistent with fair market value without regard to the volume or value of referrals between the parties as otherwise required and defined pursuant to 42 U.S.C. § 1395nn.” (R. 3622.) Finally, Appellee was prohibited under the Lease Agreement from using the MRI facility on anyone other than his own patients. Thus, Appellee did not charge this fee because he referred the patient; instead, he charged the fee because he performed the service. In addition, Appellant did not point to any evidence that the Imaging Center received payment from Appellee based on the number of MRIs performed at the Imaging Center.

In support of its argument, Appellant relies on Medical Management Group of Orlando. In that case, Medical Management Group, which was not a health care provider, scheduled appointments for MRIs at a facility with which it had a leasing agreement. Med. Mgmt. Gr., 8 Fla. L. Weekly Supp. at 361a. Medical Management Group then globally billed insurance companies for the entire MRI.² Med. Mgmt. Gr., 8 Fla. L. Weekly Supp. at 361a. The court found that the MRI facility actually performed and rendered the MRI, not Medical Management Group; instead, Medical Management Group acted only as a middleman, providing referral and billing services. Id. Thus, Medical Management Group was not entitled to collect PIP benefits from State Farm for those MRIs. Id.

On appeal, the Fifth District agreed with the trial court, stating, “We do not find that providing referral and billing services constitutes medical services under the PIP provisions.” Med. Mgmt. Gr. of Orlando, Inc. v. State Farm Mut. Auto. Ins. Co., 811 So. 2d 705, 706 (Fla. 5th DCA 2002). The trial court further stated that to allow such an arrangement would defy public policy, which forbids fee splitting arrangements wherein someone refers a patient to a facility and is paid a portion of the fee “although the referring person provided none of those services.” Med. Mgmt. Gr., 8 Fla. L. Weekly Supp. 361a (Fla. 9th Cir. Ct. 2001).

As in Medical Management Group, this case involves a lease agreement for MRI equipment and facilities. However, unlike Medical Management Group, Appellee is a licensed health care provider and did provide the MRIs. Appellee did not only schedule appointments and did not only refer patients to the Imaging Center. Pursuant to the lease, Appellee was solely responsible for scheduling the service, determining the medical necessity for the MRIs, providing its own physician to interpret the MRI scans, and processing the billing. Thus, Medical Management Group is distinguishable from the case at bar.

Appellant argues that Appellee did not perform or render the actual MRI scans or the professional component, but billed for both. Appellant does not cite to the record to support this statement. Appellant does cite to the lease for support of its statement that the MRIs were actually rendered by Imaging Center personnel. Appellee responds by pointing out that the MRIs were performed while the Imaging Center personnel were under the direct supervision of Godleski, pursuant to the lease agreement between Godleski and the Imaging Center.

Appellant did not demonstrate that there were no genuine issues of material fact and it was entitled to judgment as a matter of law that Appellee was engaged in an illegal fee splitting arrangement with the Imaging Center. First, there is no evidence that any fees were being split between Appellee and the Imaging Center. Second, the evidence before the Court was that Appellee did perform the MRIs. Thus, there was no basis upon which to find a fee-splitting or patient brokering arrangement. Therefore, the trial court did not err in denying Appellant’s motion for summary judgment on this issue.

Appellant also argues that Appellee made misrepresentations and omissions in material boxes on the HCFA forms that Appellee submitted for payment for the MRIs. Appellant further contends that therefore the HCFA forms were unlawful and failed to provide notice of the claims. Appellee argues that Appellant waived the argument when it accepted similar HCFA forms and that there was no law at the time requiring HCFA forms to be completely filled out. Appellee further asserts that it is the insurer’s burden to investigate the claim within thirty days, including any questions about HCFA forms.

The 1999 Florida statute section 627.736(5)(d), states the following:

All statements and bills for medical services rendered by any physician, hospital, clinic, or other person or institution shall be submitted to the insurer on a Health Care Administration 1500 form . . . . All billings for such services shall, to the extent applicable, follow the Physicians’ Current Procedural Terminology (CPT) in the year in which services were rendered. . . . [A]n insurer shall not be considered to have been furnished with notice of the amount of covered loss or medical bills due unless the statements or bills comply with this paragraph.

This statute was amended after the HCFA forms at issue in this case were submitted to reflect that the HCFA 1500 form must be filled out and “properly completed in their entirety as to all material provisions . . . .” § 627.736(5)(d), Fla. Stat. (2003).

Appellant relies on Motion X-Ray, Inc. v. State Farm Mutual Automobile Insurance Co., 10 Fla. L. Weekly Supp. 346a (Fla. Orange Cty. Ct. 2002). In that case, the county court specifically found that the entity billing for the medical services to the insured did not actually provide the services. Id. Thus, the misrepresentations on the HCFA forms were the equivalent of a lack of notice of the claim to the insurer. Id. The healthcare provider had failed to fill in several of the boxes, and for box 31, the provider wrote “signature on file.” Id. The court determined that the failure to fill in boxes on the HCFA, like box 31 for the signature, was misleading. Id. The court announced that as a condition precedent to payment, box 31 of a HCFA must be completed by the healthcare provider who lawfully rendered the services. Id.

In the instant action, Appellee lawfully rendered and performed the MRIs listed on the HCFA forms, so there were no misrepresentations as to that issue. The instant action is distinguishable in that unlike in Motion X-Ray, the doctor in this case whose name was on the HCFA and implied by “signature on file” in box 31 actually performed the services. It was therefore not misleading as was the case in Motion X-Ray. It should be noted that the trial judge in both Motion X-Ray and the instant action was the same and that at a hearing on May 1, 2002, the judge noted that although box 31 and 32 should have been completed, it was not a fatal mistake. This shows that the failure to fill out box 31 under the previous version of the statute is fatal only when it is done for the purpose of misrepresenting the facts.

The remainder of the argument involves Appellee’s failure to fill out the HCFA forms in their entirety. At the time the HCFA forms were sent to Appellant, there was no requirement that the forms be filled out in their entirety, only to the extent applicable. § 627.736(5)(d), Fla. Stat. (1999). In addition, Appellant’s argument is that the failure to complete all of the boxes on the HCFA forms resulted in a lack of proper notice of a covered loss.

In Palmer v. Fortune Insurance Co., 776 So. 2d 1019, 1020 (Fla. 5th DCA 2001), the insurer received notice of a covered loss that may have contained incorrect information, and then argued that the thirty-day time period for paying the loss should have commenced when it received the correct information. In rejecting this argument, the Fifth District Court of Appeal stated that the insurer has the burden to verify a claim within the 30 day period. Id. at 1022.

Although incomplete and erroneous information makes verification of a claim more difficult, the statutory burden remains with the insurer to make a decision on coverage within 30 days. Of course, if the opposing party or attorney provided erroneous or incomplete information that hindered the insurer’s investigation, that could affect the reasonable value of the attorney’s fee as determined by the court.

Id.

In this case, as noted above, the omissions on the HCFA forms were not misrepresentations. At most, the information in the forms was erroneous or incomplete. Under Palmer, erroneous or incomplete information does not negate the notice. Instead, the Fifth District specifically stated how that situation should be handled by the court — by reflecting it in the reasonable value of the attorney’s fee.³ Thus, it appears that the Court should reject Appellant’s argument that Appellee’s failure to completely fill out or provide erroneous information on the HCFA forms results in a lack of proper notice of the claim.

Appellant’s final argument is that the summary judgments entered in favor of Appellee should be reversed because the contractual arrangement between Appellee and the Imaging Center violate public policy. Appellant asserts that the arrangement violates public policy because it violates the Patient Brokering Act by establishing payment for patient referrals. Appellant’s public policy argument relies on Appellee receiving payments for “doing nothing more than referring patients to the Imaging Center.” (Initial Br. at 44.) As discussed above, the evidence is that Appellee did provide MRI services to his patients, and did not receive payment for only referring the patients. Therefore, the Court rejects this argument.

Thus, the Court finds that the trial court did not err in denying Appellant’s motions for summary judgment. In addition, pursuant to Florida Statutes sections 627.428(1) and 627.736(8), Appellee’s motions for an award of appellate attorney’s fees are granted.

Accordingly, it is hereby ORDERED AND ADJUDGED as follows:

1. The final summary judgments entered by the trial court are AFFIRMED.

2. Appellee’s motions for an award of appellate attorney’s fees are GRANTED. Appellee shall have thirty days from the date of this Order to file a proper motion pursuant to Florida Rule of Appellate Procedure 9.400(a) with the lower tribunal.

3. Appellant’s motion for an award of appellate attorney’s fees is DENIED.

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¹Normally, MRI scans performed at the Imaging Center of Orlando not affiliated with Appellee were billed at $1,375.00 per scan.

²Global billing refers to submitting one bill for both the professional component (reading the scan) and the technical component (taking the scan) of the MRI.

³Appellant does not challenge the award of attorney’s fees to Appellee by the trial court.