17 Fla. L. Weekly Supp. 368aOnline Reference: FLWSUPP 1705AFOInsurance — Personal injury protection — Coverage — Magnetic resonance imaging — Insurers are not authorized by section 627.736(5)(a)2.f., 3 or 4 to cap amount of PIP benefits paid for MRI services provided in non-emergency, non-hospital setting by applying Medicare hospital outpatient prospective payment system or any other Medicare restriction or limitations not specified in subsections of PIP statute
AFO IMAGING, INC., as assignee, individually, and on behalf of all those similarly situated, Plaintiff, vs. PEAK PROPERTY AND CASUALTY INSURANCE CORP., et al., Defendants. Circuit Court, 13th Judicial Circuit in and for Hillsborough County. Case No. 08-CA-021533. Division C. Consolidated with AFO Imaging, Inc. v. Nationwide Mutual Fire Insurance Company, et al., Case No. 08-CA-021531. January 25, 2010. James M. Barton, II, Judge. Counsel: Christopher P. Calkin, Michael B. Reiss, David M. Caldevilla, Michael R. Bray, J. Daniel Clark, Scott Jeeves, and Craig E. Rothburd, Tampa, for Plaintiff. Edward K. Cottrell, Fowler, White, Boggs P.A., Jacksonville, for Defendant.
[Editor’s note: Final order published at 17 Fla. L. Weekly Supp. 458b. Affirmed 36 Fla. L. Weekly D1463b.]ORDER ON COMPETING MOTIONS FORSUMMARY JUDGMENT
THIS CAUSE came before the Court on October 6, 2009, November 23, 2009, and December 22, 2009 concerning: (1) the “Motion for Partial Summary Judgment” filed by Plaintiff AFO Imaging, Inc. (the “MRI Provider”), as assignee, individually, and on behalf of all those similarly situated; and (2) the “Joint Motion for Summary Judgment” filed by the Defendants, Nationwide Mutual Fire Insurance Company, Nationwide General Insurance Company, Titan Indemnity Company, Nationwide Mutual Fire Insurance Company, Nationwide Property & Casualty Insurance Company, Nationwide Assurance Company, Allied Property & Casualty Insurance Company, Depositors Insurance Company, Victoria Select Insurance Company, Victoria Fire & Casualty Insurance Company, Peak Property and Casualty Insurance Corp., Dairyland Insurance Company, a/k/a Sentry Insurance, A Mutual Co., and SIAMCO (collectively, the “Insurance Companies”). The Court, having considered the parties’ motions and related memoranda of law, the record, and the arguments of counsel, hereby
ORDERS AND ADJUDGES as follows:Introduction
1. The pleadings, stipulations, and admissible evidence of record demonstrate that there is no genuine issue as to any material fact, and that the MRI Provider and the class are entitled to a partial judgment as a matter of law on their claims for declaratory relief concerning the proper interpretation and application of Section 627.736(5)(a)2.f, 3, and 4, Florida Statutes (2007-2008).1 Therefore, based on the findings and conclusions set forth below, the MRI Provider’s motion for partial summary judgment is hereby GRANTED, the Insurance Companies’ joint motion for summary judgment is hereby DENIED, and the Court hereby provides the declaratory relief set forth herein as a matter of law.
2. These consolidated class action lawsuits involve a dispute over the proper interpretation and application of the statute that governs personal injury protection (“PIP”) insurance benefits in the State of Florida. The MRI Provider and the class seek declaratory relief, injunctive relief, and damages against the Insurance Companies for allegedly underpaying PIP benefits associated with MRI services provided to PIP insureds in the State of Florida since January 1, 2008.
3. Both of the above-styled lawsuits are brought by the same MRI Provider and raise identical legal issues arising under the same statutory provisions. On May 27, 2009, by stipulation of all parties, the Court consolidated the two cases2 and entered stipulated orders granting class certification. On July 10, 2009, the Court entered amended stipulated orders granting class certification, an order approving class notices, and a case management conference order setting forth a procedure for the parties to present competing summary judgment motions.
4. To date, the parties have filed competing summary judgment motions, stipulated facts, several memoranda of law, numerous exhibits,3 and proposed orders. The MRI Provider’s motion merely seeks partial summary judgment on its claim for declaratory relief, while the Insurance Companies’ motion seeks a summary judgment in their favor on all claims. The hearing on these motions was conducted on October 6, 2009, November 23, 2009, and December 22, 2009.
5. It is undisputed that since January 1, 2008, the Insurance Companies have routinely paid for non-emergency, non-hospital magnetic resonance imaging (“MRI”) services provided to PIP insureds based on Medicare’s Hospital Outpatient Prospective Payment System (“OPPS”) (a.k.a., the “OPD fee schedule”).4 The Insurance Companies contend that the OPPS amount is part of the participating physicians schedule of Medicare Part B. See, e.g., Stipulated Facts (filed 9/29/09) at ¶¶ 12, 13, 20, 33d, 45d. The MRI Provider disagrees and contends that PIP insurers are not authorized to rely on the OPPS amount.
6. As explained in the class certification orders, the stipulated facts, and the parties’ competing summary judgment motions, the core issue at this juncture is whether the Insurance Companies are authorized by Sections 627.736(5)(a)2.f, 3 and/or 4, Florida Statutes (2007-2008)5 to cap the amount of PIP benefits paid to MRI providers by applying OPPS and/or any other Medicare restrictions or limitations not specified in those sub-sections of the PIP statute. For the reasons set forth below, this Court answers that question in the negative.6Legislative History
7. In 1971, the Florida Legislature enacted the “Florida Motor Vehicle No-Fault Law” in Sections 627.730 through 627.7405, Florida Statutes. See, Ch. 71-252, Laws of Fla. (1971). Since then, Florida has operated under what is commonly known as a “no-fault” system for certain automobile liability claims.
8. Before June 19, 2001, there was no specific statutory methodology for determining the amount of MRI fees paid by PIP insurers. Instead, the pre-2001 version of Section 627.736, Florida Statutes contemplated that MRI services would be paid based upon the same “reasonableness” standard generally applicable to all other types of medical services provided to PIP insureds.
9. As of June 19, 2001, the Legislature enacted Section 627.736(5)(b)5, Florida Statutes (2001), which began imposing a new statutory methodology requiring PIP insurers to pay MRI fees based on a fee schedule published by Medicare. See, Ch. 2001-271, Laws of Fla. (2001). The 2001 version of Section 627.736(5)(b)5 states:
(5) CHARGES FOR TREATMENT OF INJURED PERSONS. —
. . . . .
(b) . . . 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 Medicare Part B for year 2001, for the area in which the treatment was rendered, adjusted annually by an additional amount equal to the medical Consumer Price Index for Florida, except that allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services provided in facilities accredited by the American College of Radiology or the Joint Commission on Accreditation of Healthcare Organizations 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, adjusted annually by an additional amount equal to the medical Consumer Price Index for Florida. This paragraph does not apply to charges for magnetic resonance imaging services and nerve conduction testing for inpatients and emergency services and care as defined in chapter 395 rendered by facilities licensed under chapter 395. (Emph. added).
Unfortunately, “the allowable amount under Medicare Part B for year 2001” provision was somewhat vague, and that led to litigation between MRI providers and PIP insurers over the meaning of that provision.
10. The case of Advanced Diagnostic Testing, Inc. v. Allstate Insurance Company, 2003 WL 23868672 (Fla. 11th Cir. Ct. Oct. 21, 2003), affirmed, 888 So.2d 663 (Fla. 3d DCA 2004) (“Advanced Diagnostic I”) was a dispute between an MRI provider and a PIP insurer over the meaning of the 2001 version of Section 627.736(5)(b)5. The PIP insurer contended that “the allowable amount under Medicare Part B for year 2001” provision referred to the “participating physicians” fee schedule of Medicare Part B, but the MRI provider contended that it referred to the higher “limiting charge” fee schedule of Medicare Part B.7 The trial court entered a summary judgment finding “as a matter of law that the phrase ‘allowable amount under Medicare Part B’ as used in . . . Section 627.736(5)(b)5 refers to Medicare’s Participating Fee Schedule.” Advanced Diagnostic I, 2003 WL 23868672 at *1 (emph. added).
11. In Advanced Diagnostic I, the trial court explained that by seeking the “limiting charge” amount, the MRI provider was essentially attempting to rewrite the PIP statute:
. . . Application of the limiting charge would be tantamount to rewriting the statutory language of “allowable amount” to mean “maximum allowable amount”. . . .Where a statute contains certain provisions and omits others, the statute is ordinarily to be construed as excluding from its operations all those provisions not expressly mentioned. Special Disability Trust Fund, Department of Labor and Employment Security v. Motor and Compressor Co., 446 So.2d 224, 226-227 (Fla. 1st DCA 1984). The legislature was capable of drafting the phrase to read “maximum allowable amount.” More specifically, Section 5(b)2, which addresses diagnostic procedures other than MRIs, uses the phrase “maximum reimbursement allowance” . . . .
. . . The Legislature specifically employed the definite article “the allowable amount” rather than “a” or “any” allowable amount. The most sensible reading of the phrase “the allowable amount” suggests that the legislature intended for a specific Medicare schedule to be incorporated into the PIP statute, rather than either, any, or all of the schedules. See, State v. Mitchell, 719 So.2d 1245 (Fla. 1st DCA 1998) (distinguishing between use of articles); State v. Grappin, 427 So.2d 760 (Fla. 2d DCA 1983 (same). Using this interpretation of the language, the phrase “the allowable amount” can only mean that the participating rate would apply to this Plaintiff.
Advanced Diagnostic I, 2003 WL 23868672 at *8-*9 (emph. added). As part of its decision, the trial court certified the following question to the Third DCA as one of great public importance:
Does the phrase “allowable amount under Medicare Part B” as used in Fla. Stat. Section 627.736(5)(b)5 refer only to Medicare’s “participating fee schedule” or does the phrase “allowable amount” instead refer to Medicare’s “limiting charge” amount?
Advanced Diagnostic I, 2003 WL 23868672 at *11 (emph. added).
12. Thereafter, in Advance Diagnostic Testing v. Allstate Insurance Co., 888 So.2d 663 (Fla. 3d DCA 2004) (“Advanced Diagnostic II”), the Third DCA agreed with the trial court’s analysis and held:
. . . [W]e answer the certified question and hold that the term “the allowable amount under Medicare Part B,” as used in section 627.736(5)(b)5, refers to the “participating physician fee schedule of Medicare Part B,” and affirm the final summary judgment.
Advance Diagnostic II, 888 So.2d at 664 (emph. added). See also, Millennium Diagnostic Imaging Ctr., Inc. v. Sec. Nat’l Ins. Co., 882 So.2d 1027 (Fla. 3d DCA 2004) (legislative history and language of 2003 amendment to §627.736(5)(b)5, established that “the participating fee schedule was the proper fee schedule under the [2001] statute”).
13. Other published cases likewise used the participating physicians schedule of Medicare Part B when determining the allowable amount payable by PIP insurers under former Section 627.736(5)(b)5. See, e.g., MRI Associates of St. Pete v. Progressive Express Insurance Co., 15 Fla. L. Weekly Supp. 182a (Fla. 13th Cir. Ct. 2007) (identifying $517.50 as the “2001 Medicare Part B Fee Schedule” amount for CPT code 72141); Altamonte Springs Imaging, Inc. v. Progressive Express Insurance Co., 15 Fla. L. Weekly Supp. 265c (Fla. 9th Cir. Ct. 2007) (identifying $517.50 as the “Amount allowed for CPT code 72141 under 2001 Medicare Part B physician fee schedule”). Absent a statutory definition, courts can resort to definitions of the same term found in case law. See, e.g., Rollins v. Pizzarelli, 761 So.2d 294, 298 (Fla. 2000).
14. Meanwhile, in 2003, the Legislature amended the PIP statute to clarify “the allowable amount under Medicare Part B” provision. See, Ch. 2003-411, Laws of Fla. (2003). Consistent with the conclusions reached in the Advanced Diagnostic cases and similar decisions, the 2003 amendment clarified that “the allowable amount under the participating physician fee schedule of Medicare Part B for 2001” was the proper schedule to be used:
(5) CHARGES FOR TREATMENT OF INJURED PERSONS. —
(b) . . . 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, for the area in which the treatment was rendered, adjusted annually . . . except that allowable amounts that may be charged to a personal injury protection insurance insurer and insured for magnetic resonance imaging services provided in facilities accredited . . . shall not exceed 200 percent of the allowable amount under the participating physician fee schedule of Medicare Part B for year 2001, for the area in which the treatment was rendered, adjusted annually . . . .
See, Ch. 2003-411, §8, Laws of Fla. (2003) (bold added; underline and strike-thru original). The Legislature is presumed to know the pre-existing law when it adopts a statute. See, e.g., Holmes County School Bd. v. Duffell, 651 So.2d 1176 (Fla. 1995). As demonstrated above, in its 2003 clarifying amendment of the PIP statute, the Florida Legislature adopted the same result as the courts reached in the Advanced Diagnostic cases and similar decisions.
15. Effective on October 1, 2007, the Florida Motor Vehicle No-Fault Law was automatically repealed by a “sunset” provision. See, Ch. 2003-411, § 19, Laws of Fla. (2003). As a result, the State of Florida went without a PIP statute during the last three months of 2007.
16. After the PIP statute’s sunset repeal, the Legislature enacted a new set of statutes as the “Florida Motor Vehicle No-Fault Law” which became effective as of January 1, 2008. See, Ch. 2007-324, §8, Laws of Fla. (2007). As of that date, the new version of Section 627.736(5) stated in pertinent part:
(5) CHARGES FOR TREATMENT OF INJURED PERSONS. —
(a) . . . 2. The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:
a. For emergency transport and treatment by providers licensed under chapter 401, 200 percent of Medicare.
b. For emergency services and care provided by a hospital licensed under chapter 395, 75 percent of the hospital’s usual and customary charges.
c. For emergency services and care as defined by s. 395.002(10) provided in a facility licensed under chapter 395 rendered by a physician or dentist, and related hospital inpatient services rendered by a physician or dentist, the usual and customary charges in the community.
d. For hospital inpatient services, other than emergency services and care, 200 percent of the Medicare Part A prospective payment applicable to the specific hospital providing the inpatient services.
e. For hospital outpatient services, other than emergency services and care, 200 percent of the Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services.
f. For all other medical services, supplies, and care, 200 percent of the applicable Medicare Part B fee schedule. However, if such services, supplies, or care are not reimbursable under Medicare Part B, the insurer may limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13 and rules adopted thereunder which are in effect at the time such services, supplies, or care are provided. Services, supplies, or care that are not reimbursable under Medicare or workers’ compensation are not required to be reimbursed by the insurer.
3. For purposes of subparagraph 2., the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect at the time the services, supplies, or care were rendered and for the area in which such services were rendered, except that it may not be less than the applicable 2007 Medicare Part B fee schedule for medical services; supplies, and care subject to Medicare Part B.
4. Subparagraph 2. does not allow the insurer to apply any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation. An insurer that applies the allowable payment limitations of subparagraph 2. must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provider would be entitled to reimbursement under Medicare due to restrictions or limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes.
Ch. 2007-324, §20, Laws of Fla. (emph. added). It is undisputed that the MRI services at issue in this case were provided in a non-emergency, non-hospital setting, and therefore, they fall within the type of “other medical services, supplies, and care” governed by Section 627.736(5)(a)2.f. See, Stipulated Facts at ¶15.
17. Unfortunately, the above-quoted version of Section 627.736(5)(a) adopted in late 2007 did not specify or define “the applicable Medicare Part B fee schedule” or “the applicable 2007 Medicare Part B fee schedule” referenced in subsections (5)(a)2.f and (5)(a)3.8 As previously explained in ¶¶ 9-14 above, a nearly identical situation arose in 2001, when the original version of Section 627.736(5)(b)5 did not identify which particular fee schedule “under Medicare Part B for year 2001” that would apply to MRI charges. See, Ch. 2001-271, Laws of Fla. (2001). As a result, the Legislature subsequently amended Section 627.736(5)(b)5 in 2003, to clarify that the “participating physician fee schedule” of Medicare Part B for 2001 was the proper schedule to be used. See, Ch. 2003-411, §8, Laws of Fla. (2003).
18. As with the 2003 amendment to Section 627.736(5)(b)5, the Legislature likewise amended Section 627.736(5)(a)2.f and 3 on June 23, 2008 to clarify that “the applicable Medicare Part B fee schedule” refers only to the “participating physicians schedule” of Medicare Part B (i.e., the exact same fee schedule that was previously identified in the 2003 clarifying legislation, and in the Advanced Diagnostic decisions). See, Ch. 2008-220, §22, Laws of Fla. (2008). As clarified, Section 627.736(5)(a)2.f and 3 now states:
(5) CHARGES FOR TREATMENT OF INJURED PERSONS. —
[(a)2.]f. For all other medical services, supplies, and care, 200 percent of the allowable amount under the participating physicians schedule ofapplicable
Medicare Part B fee schedule.
However, if such services, supplies, or care are not reimbursable under Medicare Part B, the insurer may limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13 and rules adopted thereunder which are in effect at the time such services, supplies, or care are provided. Services, supplies, or care that are not reimbursable under Medicare or workers’ compensation are not required to be reimbursed by the insurer.
3. For purposes of subparagraph 2., the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect at the time the services, supplies, or care were rendered and for the area in which such services were rendered, except that it may not be less than the allowable amount under the participating physicians schedule applicable 2007
[of9] Medicare Part B for 2007 fee schedule
for medical services, supplies, and care subject to Medicare Part B.
Ch. 2008-220, §22, Laws of Fla. (2008) (underline and strike-through in original). Thus, the very broad “applicable Medicare Part B fee schedule” provision was replaced with the very specific “allowable amount under the participating physicians schedule of Medicare Part B” provision.
19. The legislative analysis associated with the 2008 legislation states, “under current law, insurers are allowed to limit reimbursement for PIP benefits to 80 percent of 200 percent of the Medicare Part B fee schedule for specified medical service. The amendment clarifies that PIP reimbursement for medical services would be based on 200 percent of the allowable amount under the ‘participating physicians’ schedule of Medicare Part B for 2007.” See, Florida Senate’s House Message Summary (May 1, 2008), at p. 2 (emph. added).
20. When the Legislature merely intends to clarify what was doubtful and safeguard against misapprehension as to existing law, then an amendment to a statute should be interpreted to clarify the pre-existing law and not enact a subsequent change. State ex. Rel. Szabo Food Serv. Inc. of N.C. v. Dickinson, 286 So. 2d 529, 531 (Fla. 1974); U.S. Fire Ins. Co v. Roberts, 541 So. 2d 1297 (1st DCA 1989); City of New Smyrna Beach v. Bd. of Trustees of Internal Imp. Trust Fund, 543 So.2d 824 (Fla. 5th DCA 1989). Thus, the 2008 clarifying legislation did not enact a substantive change to the 2007 version of Section 627.736(5)(a) and both versions of the statute must be interpreted to mean the same thing.10 See, e.g., Millennium Diagnostic Imaging Center, Inc. v. Security National Ins. Co., 882 So.2d 1027 (Fla.3d DCA 2004); Clearview Imaging, L.L.C. v. State Farm Mut. Auto. Ins. Co., 932 So.2d 423 (Fla. 2d DCA 2006); Ivey v. Chicago Ins. Co., 410 So.2d 494, 497 (Fla.1982). Thus, it is clear that PIP insurers cannot rely upon just any “applicable Medicare Part B fee schedule” (as broadly stated in the original version of the statute). Rather, as narrowly clarified by the Legislature, Section 627.736(5)(a)2.f and 3 require PIP insurers to pay for MRI services based on “the allowable amount under the participating physicians schedule of Medicare Part B,” and not less than “the allowable amount under the participating physicians schedule of Medicare Part B for 2007.”
21. Additionally, Section 627.736(5)(a)4, Florida Statutes (2007-2008) further limits a PIP insurer’s ability to rely on the Medicare laws for any purpose other than using “the allowable amount under the participating physicians schedule of Medicare Part B” as a baseline reimbursement level. As previously quoted herein, Section 627.736(5)(a)4 states that “Subparagraph [(5)(a)]2. does not allow the insurer to apply any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation. An insurer that applies the allowable payment limitations of subparagraph [(5)(a)]2. must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provider would be entitled to reimbursement under Medicare due to restrictions or limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes.” (Emph. added).
22. At this point, it is important to read Section 627.736(5)(a)2.f and 4 in para materia.11 The applicable parts of Section 627.736(5)(a)2.f and 4 are as follows:
2. . . . . f. For all other medical services, supplies, and care, 200 percent of the allowable amount under the participating physicians schedule of Medicare Part B. However, if such services, supplies, or care is not reimbursable under Medicare Part B, the insurer may limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13 and rules adopted thereunder which are in effect at the time such services, supplies, or care is provided. Services, supplies, or care that is not reimbursable under Medicare or workers’ compensation is not required to be reimbursed by the insurer.
. . . . . .
4. Subparagraph 2. does not allow the insurer to apply any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation. An insurer that applies the allowable payment limitations of subparagraph 2. must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provider would be entitled to reimbursement under Medicare due to restrictions or limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes.
(Emph. added). Thus, Subsection (5)(a)2.f addresses situations when services, supplies, or care are “not reimbursable under Medicare Part B . . . [or] workers’ compensation rates.” In that event, the PIP insurer “is not required” to reimburse the health care provider. In contrast, Subsection (5)(a)4 addresses situations when Medicare merely imposes “restrictions or limitations” on reimbursement. In that event, the PIP insurer “must reimburse” a health care provider who lawfully provided the services “regardless” of those Medicare restrictions or limitations.
23. Thus, under Section 627.735(5)(a)2.f, 3, and 4, Florida Statutes (2007-2008), “the allowable amount under the participating physicians schedule of Medicare Part B for 2007” sets the lowest amount upon which a PIP insurer’s payments for MRI services may be based. In other words, the 2007 Medicare Part B participating physicians fee schedule must be used whenever the Medicare fee schedule in effect at the time the MRI services are rendered is “less than the allowable amount under the participating physicians schedule Medicare Part B for 2007. . . .” First, under Section 627.736(5)(a)2.f, the “participating physicians” schedule of Medicare Part B is the proper fee schedule. Second, under Section 627.736(5)(a)2.f and 3, 80% of 200% of the participating physicians schedule Medicare Part B for 2007 is the absolute minimum reimbursement that a PIP insurer may pay an MRI provider. Third, under Section 627.735(5)(a)4, a PIP insurer must pay “regardless” of any other Medicare restrictions or limitations on the number of treatments, or the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes.
24. With this legislative history in place, it is now necessary to interpret what the Florida Legislature means by “the allowable amount under the participating physicians schedule of Medicare Part B” provisions of Section 627.735(5)(a)2.f and 3. The answer to that question requires an analysis of the federal laws governing Medicare.The Medicare Program
25. The Medicare program was enacted into federal law in 1965, as part of the Social Security Act. Social Security is governed by 42 USC Chapter 7, and Subchapter XVIII of Chapter 7 pertains to the Medicare program. See, 42 USC §§ 1395-1395ggg. The Medicare program is divided into four parts. Medicare “Part A” is addressed in 42 USC §§ 1395c through 1395i-5. Medicare “Part B” is addressed in 42 USC §§ 1395j through 1395w-4. Medicare “Part C” is addressed in 42 USC §§ 1395w-21 through 1395w-28. Medicare “Part D” is addressed in 42 USC §§ 1395x through 1395ggg.
26. The Medicare program has traditionally been broken down into broad categories. “Part A” of the Medicare program covers inpatient care provided by hospitals, skilled nursing facilities, and home health agencies (see, 42 USC §§ 1395c through 1395i-5), while “Part B” of the Medicare program covers outpatient and physician services (see, 42 USC §§ 1395j through 1395w-4). The Medicare statutes, regulations, and policies use a wide variety of payment methods, which depend on such factors as the type of service involved, the type of health care provider, and the site at which the service is provided, among many other factors.
27. The Medicare program is administered by the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services (“CMS”). Moreover, in every state, CMS enters into “a contract” with private companies, which act as third party administrators or “carriers” who “determine and make Medicare payments for Part B benefits payable on a charge basis and to perform other related functions.” See, 42 CFR §400.202 (emph. added). CMS’s third party administrator or “carrier” in Florida is a private “for-profit” Florida corporation known as First Coast Service Options, Inc. See, Plaintiff’s Exhs. A(y) and A(b) at ¶20. Notably, the CMS carrier’s function is to determine and actually make Medicare “payments” to Medicare health care providers on behalf of the federal government. Further, it is clear that CMS and its carrier in Florida (First Coast Service Options, Inc.) have no duties or functions under the Florida PIP statute. Id.
28. CMS generates the participating physicians schedule of Medicare Part B pursuant to 42 USC §1395w-4, which is titled “Payment for physicians’ services.” Section 1395w-4 is 34 pages long, very complex, and includes numerous formulas, transition schedules, special rules, incentives, exceptions, and adjustment mechanisms, among other provisions. For purposes of understanding what the Florida Legislature means by “the allowable amount under the participating physicians schedule of Medicare Part B” provisions of Section 627.735(5)(a)2.f and 3, the key provisions of Section 1395w-4 are as follows:
§ 1395w-4. Payment for physicians’ services
(a) Payment based on fee schedule
(1) In general
Effective for all physicians’ services (as defined in subsection (j)(3) of this section) furnished under this part during a year (beginning with 1992) for which payment is otherwise made on the basis of a reasonable charge or on the basis of a fee schedule under section 1395m (b) of this title, payment under this part shall instead be based on the lesser of
(A) the actual charge for the service, or
(B) subject to the succeeding provisions of this subsection
[i.e., subsection (a)], the amount determined under the fee schedule established under subsection (b) of this section for services furnished during that year (in this subsection referred to as the “fee schedule amount”).
. . . . .
(b)Establishment of fee schedules
(1) In general
Before November 1 of the preceding year, for each year beginning with 1998, the Secretary shall establish, by regulation, fee schedules that establish payment amounts for all physicians’ services furnished in all fee schedule areas (as defined in subsection (j)(2) of this section) for the year. Except as providedin paragraph (2) [of §1395w-4(b) which pertains to certain radiology and anesthesia services], each such payment amount for a service shall be equal to the product of —
(A) the relative value for the service (as determined in subsection (c)(2) of this section),
(B) the conversion factor (established under subsection (d) of this section) for the year, and
(C) the geographic adjustment factor (established under subsection (e)(2) of this section) for the service for the fee schedule area.
. . . . .
(4) Special rule for imaging services
(A) In general
In the case of imaging services described in subparagraph (B) furnished on or after January 1, 2007, if —
(i) the technical component (including the technical component portion of a global fee) of the service established for a year under the fee schedule described in paragraph (1) without application of the geographic adjustment factor described in paragraph (1)(C), exceeds
(ii) the Medicare OPD fee schedule amount established under the prospective payment system for hospital outpatient department services under paragraph (3)(D) of section 13951(t) of this title for such service for such year, determined without regard to geographic adjustment under paragraph (2)(D) of such section,
the Secretary shall substitute the amount described in clause (ii), adjusted by the geographic adjustment factor described in paragraph (1)(C), for the fee schedule amount for such technical component for such year.
(B) Imaging services described
For purposes of subparagraph (A), imaging services described in this subparagraph are imaging and computer-assisted imaging services, including X-ray, ultrasound (including echocardiography), nuclear medicine (including positron emission tomography), magnetic resonance imaging, computed tomography, and fluoroscopy, but excluding diagnostic and screening mammography.
. . . . .
(Emph. added). While somewhat complex, the various provisions of 42 USC §1395w-4 demonstrate that the participating physicians fee schedule (i.e., the fee schedule described in §1395w-4(b)(1)) is created by using a statutory formula (in §1395w-4(b)(1)(A)-(C)) that generates an allowed amount for various particular types of health care services.
29. With this backdrop in place, the Court now proceeds to analyze the parties’ arguments in this case.With respect to “imaging services,” is the OPPS amount indicated in the OPD fee schedule, the same thing as“the allowable amount under the participating physicians schedule of Medicare Part B” forpurposes of the Florida PIP statute?
30. In this case, the Insurance Companies rely on 42 USC §1395w-4(b)(4) (i.e., the “Special rule for imaging services”)12 for the proposition that “the allowable amount under the participating physicians schedule of Medicare Part B” is actually the OPPS or “OPD fee schedule amount” with respect to imaging services rendered to a PIP insured. For several reasons, this Court disagrees.
31. Regardless of the numerous complex special rules and other provisions throughout 42 USC §1395w-4, subsection (b)(1) of that statute is crystal clear. It expressly states, “Except as provided in paragraph (2)” of § 1395w-4(b), the allowable amounts under the participating fee schedule are calculated using the statutory formula expressly set forth in §1395w-4(b)(1)(A)-(C). In other words, the participating physicians schedule is the fee schedule generated solely and exclusively by §1395w-4(b)(1) and (2), without regard to any other subsections, paragraphs, or subparagraphs of §1395w-4. The “Special rule for imaging services” relied upon by the Insurance Companies is found in paragraph (4) of §1395w-4(b). Consequently, the Insurance Companies essentially request this Court to rewrite 42 USC §1395w-4(b)(1) to state that the allowable amounts under the participating fee schedule are calculated using the statutory formula expressly set forth in §1395w-4(b)(1)(A)-(C), “Except as provided in paragraphs (2) and (4).” This Court is not permitted to add words to §1395w-4(b)(1) that were not placed there by the United States Congress. See, e.g., Hayes v. State, 750 So. 2d 1, 4 (Fla. 1999); Bay Holdings, Inc. v. 2000 Island Boulevard Condo. Ass’n, 895 So. 2d 1197, 1197 (Fla. 3d DCA 2005). See also, Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984) (courts are without power to construe an unambiguous statute in a way which would extend, modify, or limit its express terms); Ervin v. Collins, 85 So. 2d 852, 855 (Fla. 1956) (court is not permitted to revise an unambiguous statute by “engrafting . . . [its] views as to how it should have been written”). Because the “Special rule for imaging services” is found in §1395w-4(b)(4), and is not found in §1395w-4(b)(1) or (2), that special rule does not generate the Medicare Part B participating physicians schedule.
32. The differences between the participating physicians schedule and the OPD fee schedule are explained in various official CMS publications. As the federal agency charged with implementing the Medicare system, CMS’s interpretations of the federal Medicare statutes and regulations are entitled to substantial deference. See, e.g., Delta Health Group, Inc. v. U.S. Dept. of Health and Human Services, 459 F.Supp.2d 1207, 1224 (N.D. Fla. 2006).
33. Official CMS publications confirm that instead of generating the Medicare Part B participating physicians fee schedule, the “Special rule for imaging services” found in 42 USC §1395w-4(b)(4) is merely a limitation or restriction (or cap) on the amount of money paid for imaging services provided to Medicare recipients, based on the “OPD fee schedule” established for OPPS. For example, CMS issued an official guidance publication in 2006 explaining that under the federal Deficit Reduction Act of 2005, the OPD fee schedule cap amount is still separate and distinct from the participating physicians fee schedule amount, and instructed both amounts to be disclosed. As stated in CMS Manual System Pub 100-04:
See, Plaintiff’s Exhibit A(t). According to the above-quoted official CMS “Policy” statement, there is an OPPS “cap amount” generated under the “Special rule for imaging services,” but there is still a separate and distinct “MPFSDB payment amount.” This policy is consistent with Congress’s express instructions that the Medicare Part B participating physicians schedule is calculated using the statutory formula in §1395w-4(b)(1)(A)-(C), “[e]xcept as provided in paragraph (2)” of §1395w-4(b). Because the “Special rule for imaging services” is found in paragraph (4), it does not control the allowable amounts under the participating physicians schedule created by §1395w-4(b)(1) and (2), and therefore, CMS directed its carriers to disclose both amounts.
34. Other CMS publications likewise confirm the distinct and separate nature of the participating physicians schedule and the OPD fee schedule. From 2000 through 2007, CMS published hard copy booklets known as the “Medicare Part B Physician and Non-Physician Practitioner Fee Schedule,” and complete copies of those booklets are filed as exhibits. See, Plaintiffs Exhs. A(f), A(g), A(h), A(i), A(j), A(k), A(1), and A(m). Each booklet provided allowable amounts for the participating fee schedule, the non-participating fee schedule, and the limiting charge fee schedule. Id.
35. At the beginning of each “Medicare Part B Physician and Non-Physician Practitioner Fee Schedule” booklet, CMS includes an instruction page titled, “HOW TO READ THE [YEAR] LOCALITY FEE SCHEDULE FOR PHYSICIANS AND NONPHYSICIANS.” See, e.g., Plaintiff’s Exh. A(f) at 6th unnumbered page (for 2007 booklet). That instruction page defines certain terms the same way, each and every year. For instance, the term “allowed amount” is always defined at the top of the instruction page for each year, as follows: “Medicare’s allowed amount is the lower of the actual charge or the fee schedule amount”. The CMS instruction page always defines the “PAR FEE SCHEDULE” as “the physician fee schedule amount for participating providers for a service rendered on or after January 1, [year]. For [year], the Medicare Fee Schedule is calculated at the full fee schedule amount.” Each year’s CMS instruction page also defines the term, “NON-FACILITY FEE SCHEDULE” as “Fee schedule and limiting charge amounts shown without an asterisk (*) indicate the non-facility fee payment amount. These services are primarily rendered in the physician’s office or laboratory.” See, Plaintiff’s Exhs. A(f), A(g), A(h), A(i), A(j), A(k), A(1), and A(m) at each year’s CMS instruction pages. Provided below for illustration, is a copy of the CMS instruction page for 2007, with the terms “allowed amount,” “Par[ticipating] Fee Schedule,” and “Non-Facility Fee Schedule” defined therein, and enlarged on the right-hand side:
See, Plaintiff’s Exh. A(f) at 6th unnumbered page (emph. added).
36. Thus, contrary to the Insurance Companies’ arguments, the CMS instruction page explains that the “allowed amount” is the “fee schedule amount.” Further, the CMS instruction page always defines the “PAR[ticipating] FEE SCHEDULE” as “the physician fee schedule amount for participating providers . . . calculated at the full fee schedule amount.” (Emph. added). In other words, according to CMS, the “allowed amount” under the participating physicians schedule (or “PAR FEE SCHEDULE”) is the “full fee schedule amount,” rather than an amount that is subject to any limitations, restrictions or caps. Clearly, the “Special rule for imaging services” of 42 USC §1395w-4(b)(4) does not generate the “full” fee schedule amount. Rather, that special rule instructs the CMS Secretary to substitute the OPD fee schedule amount whenever it is lower than the participating physicians schedule allowed amount.
37. After establishing that the “PAR[ticipating] FEE SCHEDULE” is “the physician fee schedule amount for participating providers . . . calculated at the full fee schedule amount,” the CMS booklets also confirm that the participating physicians amount (i.e., full fee schedule amount) is also the exact same as the “Non-Facility” price for services rendered outside of an emergency room or hospital. As quoted above, each CMS instruction page defines the term, “NON-FACILITY FEE SCHEDULE” as “Fee schedule. . . amounts shown without an asterisk (*) indicate the non-facility fee payment amount. . .” Thus, when medical services are rendered to a patient in a “Non-Facility” setting (i.e., outside of an emergency room or hospital), those services are not marked with an asterisk on the Medicare Physician Fee Schedule, and are considered “Non-Facility” services, which maintain the same allowable amounts as the participating physicians fee schedule. Therefore, an allowable amount for a certain procedure code listed under the “PAR[ticipating] FEE SCHEDULE” is the exact same as the “NON-FACILITY” price. Indeed, the Insurance Companies’ own evidence filed in this matter (Defendant’s Exhibit 14(a)(i)), titled, “Annual Physician Fee Schedule Payment Amount File,” specifically defines “Non-Facility Fee Schedule” and explains that “the law sets the payment amount for nonparticipating physicians at 95 percent of the payment amount for participating physicians (i.e., the full fee schedule amount.)” (Emph. added).
38. After 2007, Medicare went “paperless” and CMS discontinued its distribution of the “Medicare Part B Physician and Non-Physician Practitioner Fee Schedule” booklets. Thus, for 2008 and 2009, the full (i.e., participating) Medicare Physicians Fee Schedule can now only be accessed and printed from the official CMS Physician Fee Schedule Lookup website (www.cms .hhs.gov/PFSlookup/02_PFSSearch. asp#TopofPage). See, Plaintiff’s Composite Exh. 1, Tab 6, at p. 36 and 40.
39. During the summary judgment hearing, the Insurance Companies submitted 2008 and 2009 price documents generated by First Coast Services Options, Inc. (a private for-profit Florida corporation). These booklets have a similar instruction page which include all of the same definitions found in the CMS booklets for 2000-2007, but also include an additional definition for “C-OPPS-CAP,” which explains that every MRI procedure code listed within those booklets are“capped”amounts, instead of the “full” fee schedule amounts:
See, Plaintiff’s Composite Exhibit 1, Tab 6, at p. 34 and 38. The above-quoted First Coast Services Options, Inc. definition actually defeats the Insurance Companies’ argument. Those documents define the “C-OPPS CAP” as “Fee schedule and limiting charge amounts shown with ‘C’ indicates the technical component payment amount is capped at the OPPS amount.” (Emph. added). Within those documents, all prices for the MRI procedure codes therein are clearly marked with a “C.” As such, those MRI codes, by definition, are “capped at the OPPS amount,” and are not the “full” fee schedule (i.e., participating fee schedule) amounts as created by 42 USC §1395w-4(b)(1) and (2). See, Plaintiff’s Composite Exhibit 1, Tab 6, at p. 35 and 39. Rather, those amounts are capped at the OPPS (or OPD fee schedule) amount, and the limitations or restrictions set forth in the “Special rule for imaging services” of 42 USC §1395w-4(b)(4).Conclusion 40. Based on the foregoing, the MRI Provider’s motion for partial summary judgment is hereby GRANTED, and the Insurance Companies’ joint motion for summary judgment is hereby DENIED. The Court hereby determines and declares as a matter of law that Section 627.736(5)(a)2.f, 3, and 4 do not authorize a PIP insurer to utilize the “Special rule for imaging services” of 42 USC §1395w-4(b)(4), the “OPPS” amount, or any other Medicare restrictions or limitations not expressly described by Section 627.736(5)(a)2.f, 3, and 4, when determining the amounts due for MRI services provided in the State of Florida to a PIP insured in a non-emergency, non-hospital setting since January 1, 2008.
41. This Court hereby reserves jurisdiction to determine the MRI Provider’s remaining claims, and/or to determine claims for attorneys’ fees and costs.
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1Citations herein to the “2007-2008” versions of the personal injury protection (“PIP”) statutes refer to the versions in effect since January 1, 2008, as adopted in Chapter 2007-324, Laws of Florida (2007) and Chapter 2008-220, Laws of Florida (2008).
2Thereafter, on July 31, 2009, Judge Ralph Stoddard in Division I, entered an order approving the consolidation, and authorizing the consolidated cases to remain assigned to Judge James M. Barton, II in Division C.
3On November 3, 2009, the MRI Provider submitted “Plaintiff’s Notice of Filing Evidence in Support of Response to Defendants’ Supplemental Memorandum of Law Concerning Competing Motions for Summary Judgment” which included the affidavit of Angela O’Berry. That affidavit indicates that since January 1, 2008, numerous PIP insurance companies (including Allstate, AIG, Progressive, Geico, Liberty Mutual, and others) have consistently paid the MRI Provider’s PIP claims in accordance with the MRI Provider’s interpretation of Sections 627.736(5)(a)2.f, 3 and/or 4, Florida Statutes (2007-2008). On November 18, 2009, the MRI Provider submitted “Plaintiff’s Notice of Filing Supplemental Evidence Concerning Competing Motions for Summary Judgment.” Attached to that notice as “Exhibit A” is an Explanation of Benefits form, which purports to show that the Nationwide Defendants recently paid a PIP claim for certain MRI services in accordance with the MRI Provider’s interpretation of Sections 627.736(5)(a)2.f, 3 and/or 4, Florida Statutes (2007-2008). By order dated December 2, 2009, this Court granted the Insurance Companies’ motion to strike this evidence, over the MRI Provider’s objections, and that evidence has not been relied upon by this Court.
4Under the federal Medicare statutes and regulations, “OPD” refers to Outpatient Department. See, Amgen, Inc. v. Smith, 357 F.3d 103, 111 (D.C. Cir. 2004); Southwest Mississippi Reg. Medical Center v. Leavitt, 2009 WL 1011152, *1, n.2 (S.D. Miss. 2009). “OPPS” refers to the Hospital Outpatient Prospective Payment System. See, 42 CFR §416.164(4) and §419.1. The Insurance Companies concede that that the OPD fee schedule is the same thing as OPPS. See, Defendants’ Joint Motion for Summary Judgment at ¶33 (“. . . the OPPS (aka OPD) amount. . .”). See also, 42 USC §1395l(t)(1)(A) and (B) (describing the OPD fee schedule as a “prospective payment system” for “hospital outpatient services”).
5The parties do not seek any determinations concerning Section 627.736(1)(a) and/or 5(a)1, Florida Statutes (2007-2008), and those subsections are not at issue in this case. See, Stipulated Facts at fn. 5.
6While there exists no Florida appellate opinion discussing the issue decided herein, the instant order is consistent with the result reached by the Honorable William P. Levens in AFO Imaging, Inc. v. Alpha Property & Casualty Ins. Co., 16 Fla. L. Weekly 533a (Fla. 13th Jud. Cir. Ct., April 13, 2009). Contra, Eric Bravo, et al., v. State Farm Fire & Casualty Company, (Fla. 9th Jud. Cir. Ct., January 14, 2010) (a copy of the Bravo order is attached as Exhibit A).
7According to federal law, the prices in Medicare’s limiting charge fee schedule are 115% of the allowable amounts set forth in the Medicare’s non-participating physicians fee schedule. See, 42 USC §1395w-4(g)(2)(C). The prices in the non-participating physicians fee schedule are 95% of the allowable amounts set forth in the Medicare’s participating physicians fee schedule. See, 42 USC §1395w-4(a)(3). Therefore, the limiting charge fee schedule is also 109.25% (i.e., 95% of 115%) of the allowable amounts set forth in the participating physicians fee schedule (and the CMS website confirms that this is correct). See, Plaintiff’s Exhibit A(v) (CMS website — National Physicians Fee Schedule and Relative Value Files); Defendant’s Exhibit 2(a)(ii) at p. 2 (CMS “Annual Physicians Fee Schedule Payment Amount” file); Defendant’s Exhibit 14(a)(i) at p. 3 (CMS “Annual Physicians Fee Schedule Payment Amount” file).
8The federal statutes governing Medicare Part B establish several different fee schedules, including the participating physicians schedule, the non-participating physicians schedule, the limiting charge schedule, and the OPD fee schedule. See, 42 USC §1395w-4 and §1395/(t). Thus, depending on the nature of the services rendered and the type of health care provider rendering those services, “the applicable Medicare Part B fee schedule” provisions of sub-sections (5)(a)2.f and (5)(a)3 might potentially refer to any one of several different fee schedules.
9As an apparent scrivener’s error, the word “of” was omitted from the 2008 legislation. This word was subsequently inserted in a reviser’s bill. See, Ch. 2009-21, §86, Laws of Fla. (2009).
10All parties in this case agree that the 2008 clarifying legislation did not enact a substantive change to the 2007 version of Section 627.736(5)(a) and both versions of the statute must be interpreted to mean the same thing. See, e.g., Amended Stipulated Order Granting Joint Motion for Class Certification (July 10, 2009) at ¶7.
11See, e.g., Abbott Laboratories v. Mylan Pharmaceuticals, Inc., 15 So.3d 642, 657 (Fla.lst DCA 2009) (it is axiomatic that statutes must be read in para materia with other related statutes and other related portions of the same statute). Moreover, whenever possible, courts must give effect to all statutory provisions and construe related statutory provisions in harmony with one another. See, e.g., Forsythe v. Longboat Key Beach Erosion Control Dist., 604 So.2d 452, 455 (Fla. 1992).
12In 2005, the U.S. Congress passed the federal “Deficit Reduction Act of 2005.” See, Pub. L. 109-171. Among other things, that Act amended 42 USC §1395w-4 to insert subsection (b)(4) as a new payment limitation procedure, known as the “Special rule for imaging services” to help the federal government reduce the federal deficit by reducing the amount of money that the federal government will pay for imaging services provided by certain types of health care provider to Medicare recipients. As stated in §1395w-4(b)(4)(A)(i), this “Special rule” applies to those health care providers who render “the technical component” of imaging services, including MRIs.
