15 Fla. L. Weekly Supp. 805a
Health maintenance organizations — Declaratory judgment — Balance billing — Where sole provider of anesthesia at hospital under contract with HMO received authorization to deliver anesthesia services to HMO subscribers as part of hospital’s authorization for surgeries and to bill subscribers for those services, HMO is liable for services rendered by anesthesia provider — Where HMO accepted liability for payments to anesthesia provider, and provider was informed that HMO accepted liability and knew or should have known that HMO was liable, provider was prohibited by section 641.3154 from balance-billing subscribers — No merit to argument that HMO could not accept liability if it did not make full payment for services rendered — No merit to argument that provider is authorized to balance-bill by hospital’s consent to treatment form
AMANDA STEIN and FLORIDA HEALTH CARE PLAN, INC., a Florida Non-Profit Corporation, Plaintiffs, v. THE JOSEPH L. RILEY ANESTHESIA ASSOCIATES, P.A., d/b/a JLR MEDICAL GROUP, Defendant. Circuit Court, 7th Judicial Circuit in and for Volusia County. Consolidated Case No. 2006-11685-CIDL, Division 01. May 31, 2008. Randell H. Rowe, III, Judge. Counsel: Karina P. Gonzalez. James M. Talley. C. Anthony Schoder, Jr.
AFFIRMED at 35 Fla. L. Weekly 257b
FINAL JUDGMENT ON COUNT II OF AMENDED COMPLAINT
This matter came before this Court on April 14-16, 2008, for a non-jury trial on the Plaintiffs’ Amended Complaint, Count II for Declaratory Judgment, in this consolidated action. Having considered all the testimony presented and other evidence admitted at trial, having reviewed the pretrial briefs and heard argument of counsel, having studied the applicable statutory and case law, and being otherwise fully advised in the premises, the Court hereby makes its findings of fact and conclusions of law as follows:
Plaintiff FLORIDA HEALTH CARE PLAN, INC. (“FHCP”), is a health maintenance organization licensed by the State of Florida and organized under Chapter 641 of the Florida Statutes. In exchange for premium payments, FHCP provides, either directly or indirectly, health care services and reimbursement for health care services pursuant to health maintenance contracts with its subscribers. The co-Plaintiffs are 52 consolidated individual subscribers (“subscribers”) who are members of FHCP and who received medical care and treatment at Florida Hospital Fish Memorial (“Fish Memorial”) located in Orange City, Florida.
The Defendant, The JOSEPH L. RILEY ANESTHESIA ASSOCIATES, P.A., d/b/a JLR MEDICAL GROUP (“JLR”), is a group of anesthesiologists who are hospital-based exclusive providers of anesthesia services at Fish Memorial and who provided anesthesia services to each of the 52 individual co-Plaintiffs. JLR does not have a contract with FHCP and, therefore, is a non-participating, non-contracted anesthesia provider. FHCP does have a contract with Fish Memorial and also contracts with the surgeons who provided health care services to the 52 subscribers.
As is typical of all health plans, FHCP pre-authorizes all non-emergency surgeries involving its subscribers. For the pre-scheduled surgery for each of the subject 52 subscribers, the surgeon submitted to FHCP a “Preadmission-Preoperative Record” which contained information about the subscriber, the surgeon, the diagnosis, the surgical procedure, the hospital where the procedure was to be done, and indicated what type of anesthesia would be administered. Each pre-scheduled surgery submitted to FHCP goes through an authorization process, and a determination is made by FHCP that the subscriber is eligible, that the requested surgery is a covered benefit under the subscriber’s plan, that the physician has requested a procedure that is medically necessary, and that the surgery will be performed at a hospital with the capability to provide the services requested. Once FHCP approves the requested services, an authorization number is issued for use by all involved healthcare providers so that they can submit their billing to FHCP for payment of fees.
The disputed issue in this case concerns JLR’s billing practice. For its anesthesia services provided at Fish Memorial, JLR had the practice of billing FHCP on the Health Insurance Claim Form (HCFA 1500) using FHCP’s authorization number, receiving payment from FHCP, and then sending an invoice directly to the FHCP subscriber for the difference between the amount paid by FHCP and the total amount billed by JLR. This practice is referred to in the healthcare industry as “balance-billing.”
In Count II of the Amended Complaint, the Plaintiffs ask this Court to enter a judgment declaring that JLR’s balance-billing of the subscribers is prohibited by Section 641.3154 of the Florida Statutes.
Section 641.3154 states that a health maintenance organization (a/k/a “HMO”) is liable for services rendered to a subscriber by a provider if the provider follows the HMO’s authorization procedures and receives authorization, and that if an HMO is liable for services rendered, “regardless of whether a contract exists between the [HMO] and the provider . . . the subscriber is not liable for payment of fees to the provider.” Foundation Health v. Westside EKG Associates, 944 So. 2d 188, 196 (Fla. 2006). Section 641.3154(1) specifically states as follows:
If a health maintenance organization is liable for services rendered to a subscriber by a provider, regardless of whether a contract exists between the organization and the provider, the organization is liable for payment of fees to the provider and the subscriber is not liable for payment of fees to the provider.
JLR, Fish Memorial, and its surgeons all fall under the statutory definition of “providers.” Pursuant to Section 641.3156(1):
A health maintenance organization must pay any hospital-service or referral-service claim for treatment for an eligible subscriber which was authorized by a provider empowered by contract with the health maintenance organization to authorize or direct the patient’s utilization of health care services and which was also authorized in accordance with the health maintenance organization’s current and communicated procedures.
Fish Memorial had a contract with FHCP and was empowered to authorize or direct the provision of JLR’s anesthesia services to FHCP’s members. Section 641.3154(2) states:
For the purposes of this section, a health maintenance organization is liable for services rendered to an eligible subscriber by a provider if the provider follows the health maintenance organization’s authorization procedures and receives authorization for a covered service for an eligible subscriber.
There was extensive testimony at trial regarding authorization procedures. In general, the testimony showed that FHCP “pre-authorizes” each surgery, with anesthesia included as part of the procedure, and that there is no separate authorization for anesthesia. Since JLR is the exclusive provider of anesthesia services at Fish Memorial, it is the “only game in town,” and, therefore, there is no need for a separate authorization for a particular anesthesiologist, because JLR is it. JLR is “rendered authorized” when the authorization number is assigned.
JLR’s chief executive officer testified that JLR does not participate in or follow any authorization procedure. However, Edward Simpson, chief executive officer of FHCP, explained that FHCP’s authorization process embraces that JLR is the anesthesia provider and that there is nothing that JLR has to do as far as following FHCP’s authorization procedures. He testified that JLR does not have to actively get authorization because it is already authorized since it is the hospital provider. He further explained that there is not a separate authorization number for JLR and that JLR does not have to seek authorization separate from the hospital. The authorization number indicates for tracking purposes that the surgical procedure was approved by FHCP, and Mr. Simpson explained that issuance of the authorization number is the authorization that JLR needs to proceed with its service. He further testified that JLR followed FHCP’s authorization process because all JLR had to do was proceed under the authorization number on the “Preadmission-Preoperative Record,” and that is what it did.
Based on the evidence, the Court finds that JLR followed FHCP’s authorization procedures and received authorization. JLR relied on Fish Memorial’s authorization in order to deliver and bill for anesthesia services to FHCP’s subscribers. FHCP was thereby liable, pursuant to statute, for services rendered by JLR to its subscribers at Fish Memorial.
Section 641.3154(4), Florida Statutes, provides as follows:
A provider or any representative of a provider, regardless of whether the provider is under contract with the health maintenance organization, may not collect or attempt to collect money from, maintain any action at law against, or report to a credit agency a subscriber of an organization for payment of services for which the organization is liable, if the provider in good faith knows or should know that the organization is liable. This prohibition applies during the pendency of any claim for payment made by the provider to the organization for payment of the services and any legal proceedings or dispute resolution process to determine whether the organization is liable for the services if the provider is informed that such proceedings are taking place. It is presumed that a provider does not know and should not know that an organization is liable unless:
(a) The provider is informed by the organization that it accepts liability;
(b) A court of competent jurisdiction determines that the organization is liable;
(c) The office or agency makes a final determination that the organization is required to pay for such services subsequent to a recommendation made by the Subscriber Assistance Panel pursuant to s. 408.7056; or
(d) The agency issues a final order that the organization is required to pay for such services subsequent to a recommendation made by a resolution organization pursuant to s. 408.7057.
This Court finds that Section 641.3154(4) is unambiguous and very clearly states that whether the provider is under contract with the HMO, or not, the provider may not collect or attempt to collect money from, maintain an action at law against, or report to a credit agency a subscriber of an HMO for payment of services for which the HMO is liable if the provider in good faith knows or should know that the HMO is liable. The evidence demonstrates that FHCP, through its history of payments to JLR, through communication with JLR, and through its authorization process, accepted liability for payment of fees to JLR. JLR was informed by FHCP that it accepts liability, and JLR knew or should have known that FHCP was liable. Thus, JLR was prohibited by Section 641.3154(4) from directly billing FHCP’s subscribers. See Health Options, Inc. v. Palmetto Pathology Services, P.A., 2008 WL 1733673 (Fla. 3d DCA, April 16, 2008) [33 Fla. L. Weekly D1044a]. There is no need to consider Sections 641.3154(4)(b), (c), and (d), as they did not apply to the course of dealing in this case.
This Court rejects as being without merit JLR’s argument that FHCP could not accept liability if it did not make full payments to JLR for services rendered. The Court also rejects the argument that JLR was not prohibited under Section 641.3155(8) from balance-billing the subscribers when a portion of JLR’s bill was “denied” by FHCP. There is no evidence that FHCP ever denied JLR’s bills. Making partial payment for JLR’s services is not the same as denying or contesting JLR’s claim for services, so Section 641.3155(8) is not applicable.
As a matter of law, the Court finds that there is no ambiguity in the language of Sections 641.3154(1), (2), and (4). JLR followed FHCP’s authorization procedures and received authorization for its services to the subscribers, FHCP was liable for payment of fees to JLR, and the subscribers were not liable for payment of fees to JLR and are protected from being balance-billed by JLR.
Apart from the referenced statutory provisions at issue, JLR makes a contractual argument in support of its right to balance-bill the subscribers. When each of the subscribers was admitted to Fish Memorial, he or she signed a document called “Consent to Treatment & Authorization.” (Trial Exhibit #11) JLR relies heavily on this document as its authority to balance-bill its patients. However, JLR’s chief executive officer testified at trial that JLR does not obtain the Consent to Treatment form from patients. Instead, Fish Memorial obtains and maintains the form on the hospital’s behalf, and not on JLR’s behalf. Furthermore, he conceded that no one at Fish Memorial has ever told JLR that it could rely on the Consent to Treatment form for obtaining payment. JLR’s reliance on this form is without merit. Fish Memorial, under its contract with FHCP, was not permitted to balance-bill for covered services paid by FHCP. JLR believes that it is a third-party beneficiary to the Consent to Treatment form. However, Fish Memorial is prohibited from doing what JLR believes it can do under this form — balance-bill FHCP subscribers for paid covered services. Since Fish Memorial has no right to balance-bill the subscribers, JLR certainly does not have any greater rights than Fish Memorial under the Consent to Treatment form.
Further, when parties enter into an agreement upon a subject which is surrounded by statutory regulations, limitations, and requirements, they are presumed to have entered into their agreement with reference to such statutes, and those statutory provisions enter into and become a part of the agreement. Foundation Health, 944 So. 2d at 195; and Health Options, Inc., 2008 WL 1733673. There is nothing in the Consent to Treatment form which excludes Section 641.3154(1), Florida Statutes, and that statute prohibiting billing the subscribers entered into and became a part of the Consent to Treatment. See Health Options, Inc., at n.6. In fact, the Consent to Treatment expressly includes language to the effect that the patient understands that he or she owes the entire balance due, “less any amount which is not owed by law or contract.” (emphasis added) This recognizes the aforesaid statutory provisions that the subscribers are not liable for payment of balance-billed fees.
In light of the foregoing, it is hereby
ORDERED AND ADJUDGED:
That Final Judgment is entered declaring that JLR’s balance-billing of the subscribers is prohibited by Section 641.3154 of the Florida Statutes.
