15 Fla. L. Weekly Supp. 129a

Insurance — Personal injury protection — Coverage — Medical expenses — Where unrefuted evidence established that medical provider charged PIP insurer substantially more for like services than provider charges under cash discount plan, provider is not entitled to recover disputed balance of reduced claim — Error to find that provider’s intent to defraud is issue of fact precluding summary judgment; intent is not issue under statute precluding provider from charging PIP insurer more than customarily charged for like services not billed to PIP insurers — Improper coding — Upcoding is affirmative defense on which insurer had burden of persuasion — Standing — Because insurer waived standing defense by not raising it in answer, trial court erred in entering summary judgment in insurer’s favor on issue — However, trial court effectively corrected error by allowing provider to amend complaint to assert individual plaintiff to whom assignment was made rather than professional association — Award of prevailing party attorney’s fees in one case is set aside in view of reversal of judgment

PROGRESSIVE CONSUMERS INSURANCE COMPANY, Appellant, vs. CRAIG A. NEWMAN, D.C. (a/a/o Reem Riley), Appellee. Circuit Court, 13th Judicial Circuit (Appellate) for Hillsborough County, Civil Appeals Division. Case No. 05-1690, Division X. L.C. Case Nos. 03-15206, 03-15207. CRAIG A. NEWMAN, D.C., (a/a/o Michael Riley), Appellant/Cross Appellee, vs. PROGRESSIVE CONSUMERS INS. CO., Appellee/Cross-Appellant. Case No. 05-3335, Division X. L.C. Case Nos. 03-15206, 03-15207. July 17, 2007. On review of a decision of the Hillsborough County Court, The Hon. Michelle Sisco presiding. Counsel: V. Rand Saltsgaver, Orlando. Timothy A. Patrick, Tampa. Betsy E. Gallagher, Kubicki Draper, Tampa.

CERT. DENIED at 33 Fla. L. Weekly 466c

Second amended opinion.

(WILLIAM P. LEVENS, J.) This second amended opinion is substituted for the first amended opinion to correct to clarify that this Court heard the arguments of counsel for both parties on May 8, 2007, with respect to their motions for rehearing and hereby denies both motions.

These consolidated appeals arise from a protracted and highly contentious action to recover $24.00 in personal injury protection (PIP) benefits. Based upon our review, we conclude that the judgment for the provider should be set aside and judgment for Progressive be entered.

The healthcare provider’s professional association, Craig A. Newman, D.C., P.A. (hereinafter the “provider”¹) filed two separate lawsuits against Progressive to recover allegedly overdue benefits for treatment it provided a couple after they were injured in an automobile accident. One lawsuit was filed as assignee of Reem Riley, the other as assignee of Michael Riley. The trial court consolidated the cases upon stipulation of the parties.

Following the conclusion of the trial court proceedings, the parties filed two separate appeals, as well as a cross-appeal in the second appeal. We have consolidated the two appeals to simplify review. In what we will refer to as the first appeal, Progressive challenges the final judgment entered in favor of the provider with respect to Reem Riley’s benefits. Michael Riley’s benefits were exhausted prior to the filing of the lawsuit, and the provider does not challenge the judgment in favor of Progressive. However, in the second appeal the provider challenges the validity of the offer of judgment and the subsequent entry of an award of attorney’s fees to Progressive in the Michael Riley claim. In the cross-appeal filed within the second appeal, Progressive in turn challenges the award of attorney’s fees to the provider in the Reem Riley case because Progressive challenges the final judgment in the first appeal and, therefore, the provider’s status as the prevailing party. Because our discussion is limited to only a few of the many issues raised by the parties, we likewise limit our rendition of the case and facts to those that are relevant to our discussion.

On April 14, 2003, Reem Riley sought treatment at the provider’s clinic for injuries received in a covered incident. Reem Riley executed an assignment of benefits in favor of the provider. The bills for this treatment were submitted to Progressive on an approved form. It listed three procedure codes for which payment was sought. The codes used were derived from the Current Procedural Terminology (CPT codes) established by the American Medical Association, as required by law. For Reem Riley, the provider billed a 99204 (a comprehensive evaluation for a new patient), a 72052 (a cervical x-ray) and a 72110 (a lumbar x-ray). The bill also included the ICD-9 diagnosis codes required by the AMA as part of the CPT coding system and the required PIP statute. These codes indicated that Reem Riley had been diagnosed with a neck sprain, generalized back symptoms, headache and “nonallopathic lesions of the cervical region.”

Upon receipt of the billing, the Progressive adjuster entered the codes into a database Progressive used to assist it in evaluating whether treatment provided and amounts billed are reasonable, necessary and related. According to the explanation of benefits provided with the payment, the database indicated that the amount billed for the 99204 (office exam) was not reasonable. The amount allowed was 30 dollars less than the amount billed, 80 percent of which is $24.00, the amount at issue. Progressive issued to the provider payment of $625.00 for the three procedures. Because Progressive had not paid the full amount of the bill, the provider filed suit against Progressive seeking to recover the $24.00, plus attorney’s fees and costs.

During discovery, Progressive learned that the provider had implemented a cash discount program. The terms of the provider’s cash-discount program were that a first visit comprising a consultation, orthopedic and neurological exam, a single region x-ray (if necessary) plus physical therapy cost only $120.00. Each additional x-ray was $40.00.

In the trial court, Progressive challenged the provider’s claim asserting that the provider’s cash-discount plan constituted a second price scheme that violated §627.736(5)(a), Florida Statutes (2001), and, as such, precluded the provider from recovering the $24.00 balance. The statute prohibits healthcare providers from charging PIP insurers more than it customarily charges uninsured patients for like services.

For Reem Riley, the provider billed Progressive $275.00 for the initial evaluation, $200.00 for the cervical x-ray, and $180.00 for the lumbar x-ray for a total of $655.00. Progressive paid $625.00 for the treatment. Under the cash payment plan, the same services would have resulted in a total charge of $160.00 — $120.00 for the exam and single x-ray, and $40.00 for the second x-ray. The trial court rejected Progressive’s argument, concluding that the provider’s intent to defraud the insurance company was an outstanding issue of fact that precluded summary judgment. This was error.

The PIP statute expressly states that providers may not charge a PIP insurer more than what they customarily charge for “like services” that are not billed to PIP insurers. Section 627.736(4)(b), Florida Statutes. We note that the legislature specifically uses the term “like services” not “same services.” The statute does not limit its proscription to services that are exactly the same or are billed under the same code. The intent of the provider is not an issue. In this case, the unrefuted evidence established that the provider charged substantially more — a $140.00 premium — for x-rays charged to the PIP insurer than he did for x-rays charged under his cash-payment plan. Furthermore, the evidence also established that the provider’s evaluation under the cash-payment plan was substantially similar to the evaluation he provided Reem Riley. Here, the provider’s cash discount program would have resulted in Riley’s being charged $160.00 for the services for which Progressive paid the provider over $600.00.

The provider contends that Progressive’s argument fails to consider the statute’s reference to custom when charging for those like services, and that Progressive did not prove that the provider routinely accepted less for those services. The provider seems to suggest that if he does not make a habit of accepting less money from cash paying patients it is not a “custom.” A formal program that a provider implements (as opposed to payment arrangements being made on a case-by-case basis) is sufficiently customary to come under the auspices of the statute. The amount the provider charged to the insurer was more than four times what the same provider would charge under his cash plan for like services. In light of the statutory provision that the provider may not charge more than he does for an uninsured patient, the provider is not entitled to recover the disputed $24.00 balance, and judgment should be entered for Progressive.

Notwithstanding our conclusion as to the cash discount issue, we elect to discuss briefly certain issues that the insurer has raised, even though they do not affect the outcome of this appeal, because they are capable of repetition: upcoding and standing.

Upcoding:Progressive challenges the trial court’s conclusion that upcoding is an affirmative defense which had the effect of placing upon Progressive the burden of persuasion. Progressive also takes issue with the trial court’s decision to give less weight to the evidence it presented on the upcoding issue because of the passage of time before Progressive raised the issue.

We address first whether upcoding constitutes an affirmative defense. We conclude that it does. An affirmative defense is one that, in whole or in part, bars or voids a cause of action asserted by the opposing party. Storchwerke, GMBH v. Mr. Thiessen’s Wallpapering Supplies, Inc., 538 So. 2d 1382 (Fla. 5th DCA 1989). Pursuant to state law, a PIP insurer is not required to pay for services that have been upcoded. Section 627.736(5)(b)1.e., Florida Statutes. Thus, upcoding is a complete defense to the cause of action. Progressive was ultimately correct to have pled upcoding as an affirmative defense in its amended answer, and the trial court did not err when it placed the burden of persuasion on Progressive on the issue.

We now address the timing question as it affected the upcoding defense. The trial court stated in its order that the evidence Progressive presented was compelling and, had it been more prompt in raising the issue, the outcome might well have been different. Given that the procedural and evidentiary requirements were ultimately observed, we question how timing served to undermine Progressive’s proof, although we acknowledge that we are not privy to all the factors that may have affected the trial judge’s decision in this regard. Therefore, we reach no conclusion as to the propriety of the trial court’s consideration of timing, but we remind the trial courts that they should not hold insurers to a 30-day time limit. Section 627.736(4)(b), Florida Statutes (2002); Progressive Express Ins. Co. v. Outpatient Pain & Wellness Center (as assignee of Christine Scobee), appeal no. 05-7692 (Fla. 13th Jud. Cir. Dec. 14, 2006) [14 Fla. L. Weekly Supp. 339a]. Any information pertaining to the validity of a claim should be given the same consideration regardless of the party proffering it.

Standing:We now turn our attention to standing to correct a misunderstanding of the law to the extent it equates standing with subject matter jurisdiction. While subject matter jurisdiction is an issue that cannot be waived and may be raised at any time, including for the first time on appeal, standing is an affirmative defense which the insurer waived when it did not raise it in its answer.

Here, the original plaintiff in this action was the healthcare provider’s professional association: Craig Newman, D.C., P.A. The P.A. had no assigned rights because the assignments were made to Craig Newman, D.C., as an individual. The trial court granted Progressive summary judgment on the issue, but allowed the provider to correct the complaint. Progressive contends that allowing the amendment was error. The provider counters that the trial court should never have given Progressive summary judgment in the first place because Progressive waived the issue when it failed to plead standing as an affirmative defense. On this issue, we agree with the provider.

Progressive cites Askew v. Hold the Bulkhead-Save Our Bays, Inc., 269 So.2d 696 (Fla. 2d DCA 1972) for the proposition that standing cannot be created by waiver, acquiescence, agreement, by error or inadvertence of counsel, or by the court’s exercise of power. Askew is inapplicable to this appeal because it, unlike the present case, was an administrative appeal. In an administrative context, subject matter jurisdiction and standing have been linked in such a way that in such cases, standing, like subject matter jurisdiction, cannot be waived and may be raised at any time, including for the first time on appeal. Grand Dunes, Ltd. v. Walton County, 714 So. 2d 473, 475 (Fla. 1st DCA 1998) (In the administrative context “[s]tanding has been equated with jurisdiction of the subject matter. . .and has been held subject to the same rules, one of which is that jurisdiction of the subject matter (thus standing to bring suit) cannot be conferred by consent,” citing Askew v. Hold the Bulkhead-Save Our Bays, Inc., 269 So.2d 696, 698 (Fla. 2d DCA 1972)). (Emphasis ours). Indeed, based upon this analysis, this Court has previously held that subject matter jurisdiction and standing were equivalent without regard to the administrative context limitation. Medical Rehab and Therapy Center, d/b/a Pain Corrective Center of Brandon, Inc. (as assignee of Shannon Patterson) v. State Farm Mutual Automobile Ins. Co., 8 Fla. L. Weekly Supp. 605a (Fla. 13th Jud. Cir. July 16, 2001). We correct that error here.

Outside of an administrative context, standing, unlike subject matter jurisdiction, is an affirmative defense that may be waived if not pled. See Krivanek v. Take Back Tampa Political Comm., 625 So.2d 840, 842 (Fla.1993); Schuster v. Blue Cross and Blue Shield of Florida, Inc., 843 So.2d 909 (Fla. 4th DCA 2003). Further, the issue cannot serve as a basis for summary judgment if it has not been raised in the answer. Wolowitz v. Thoroughbred Motors, Inc., 765 So. 2d 920 (Fla. 2d DCA 2000). Here, the insurer waived the standing defense, and the trial court erred when it entered summary judgment in the insurer’s favor on this issue. However, because the trial court allowed the provider to amend the complaint to assert the individual plaintiff, the trial court effectively corrected its error.

The second appeal:The second appeal pertains to attorney’s fees awarded in both underlying cases. In the Michael Riley case, the court found that benefits had been exhausted prior to the filing of the lawsuit. As a result, it awarded Progressive attorney’s fees pursuant to an offer of judgment that the provider had rejected. In the appeal, the provider challenged every aspect of the offer. However, we find no error and affirm the decision as to attorney’s fees in the Michael Riley case.

In the cross-appeal, Progressive challenges the trial court’s award of attorney’s fees to the provider in the Reem Riley case. Because we concluded in the first appeal that the final judgment in favor of the provider must be set aside and judgment entered in favor of Progressive, we must likewise reverse the decision to award the provider attorney’s fees.

It is therefore ORDERED that the judgment in favor of the provider below be REVERSED and judgment entered in favor of Progressive. It is further ORDERED that the award of attorney’s fees to Progressive in the Michael Riley case is AFFIRMED and that the award of attorney’s fees to the provider in the Reem Riley case be SET ASIDE. Progressive’s motion for appellate attorney’s fees is GRANTED. (HOLDER and HONEYWELL, JJ., Concur.)

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¹For reasons that will become apparent below, the healthcare provider’s association and the provider in his individual capacity will both be referred to as ‘the provider.’