18 Fla. L. Weekly Supp. 219a

Online Reference: FLWSUPP 1802GUAR

Insurance — Personal injury protection — Coverage — Medical expenses — National Correct Coding Initiative edits, which bar physicians from administering certain services to patient on same day, are utilization limitations prohibited by PIP statute — Insurer is precluded from defending case on basis that CPT charges were unbundled or improperly coded where insurer waived those affirmative defenses by failing to plead them

QUALITY MEDICAL GROUP, INC. a/a/o Jennifer Guarderas, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami Dade County. Case No. 09 9760 SP 25 (01). October 5, 2010. Andrew S. Hague, Judge..

ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

THIS CAUSE having come to be heard on Plaintiff’s, QUALITY MEDICAL GROUP, INC. a/a/o Jennifer Guarderas’, Motion for Summary Judgment, pursuant to Rule 1.510, Fla.R.Civ.Pro, after due notice to all parties, the Court having heard argument of counsel on 9/24/10, and having been otherwise fully advised in the premises, it is,

ORDERED AND ADJUDGED:

1. The Plaintiff sued the Defendant on or about 9/18/09, alleging violation of § 627.736 and breach of contract, seeking to enforce the payment of PIP benefits arising out of a motor vehicle accident that occurred on or about 10/12/08.

2. The Plaintiff sued the Defendant for the following outstanding medical expenses: Quality Medical Group, Inc. for CPT code 97124 for dates of service 10/16/2008 through 12/16/2008 in the amount of $1,054.00.

3. On or about 10/12/09, the Defendant filed its’ Answer and Affirmative Defenses alleging that it issued payment as allowed under the Section 627.736 (5)(a)(2)(f) and (5)(a)(3) of the Florida Statutes.

4. The Defendant issued payment for all other lawfully rendered services rendered to Jennifer Guarderas and submitted by the Plaintiff to the Defendant which are compensable under the terms of the policy and Fla. Stat. § 627.736 at 80% of 200% Medicare Part B pursuant to a permissive fee schedule contained in Fla. Stat. § 627.736(5)(a)(2)(2008).¹

5. The Plaintiff has alleged that all of the medical services rendered to the patient are reasonable, related and medically necessary. To support these allegations, the Plaintiff has filed the affidavits of the treating physician and the person with the most knowledge of the billing and charges. The Defendant did not file any affidavit(s) in opposition to the motion disputing whether the subject services are reasonable, related or necessary, but rather, served the affidavit of Nicole Bonaparte who claims to be a certified professional coder practicing in the State of Florida.

6. According to Ms. Bonaparte, the provider “incorrectly unbundled CPT code 97124 and 97140” when they were submitted on the same day. “These two CPT codes are integral components. Reporting massage therapy and manual therapy on the same date of service and same injury or anatomic sites is duplicative. The physician must according to the AMA’s CPT indicate that a procedure or service was distinct or independent from other services performed on the same day, provided the code is not mutually exclusive.”

7. To support her opinion, Ms. Bonaparte relies on the NCCI edit table which “contains edits consisting of two codes (procedures) which cannot reasonably be performed together based on the code definitions or anatomic considerations.”

8. The Defendant imposed a Medicare Part B utilization limitation, National Comprehensive Coding Initiative (“NCCI”) edits, which it used to deny payment for services which otherwise would be reimbursable under Medicare Part B.

9. Defendant chose to systematically deny CPT code 97124 because it claims that the code was disallowed by the National Correct Coding Initiative (NCCI) edits which prevents code payments for certain code combinations billed on the same day. In its’ Verified Answers to Plaintiff’s Interrogatories, in response to Interrogatory #13, “Describe in detail each claim which the patient, claimant, Plaintiff, and/or the medical care provider submitted for which you are denying coverage, or otherwise withholding payment.” the Defendant stated, “CPT Code 97124 is included in 97140.” (See Plaintiff’s Notice of Filing Defendants Verified Answers to Plaintiff’s Interrogatories #13).

10. According to the Explanation of Reviews provided in Defendant’s Response to Request for Production, Defendant denied code 97124 on 10/16/08, 10/20/08, 10/21/08, 10/23/08, 10/27/08, 10/28/08, 10/31/08, 11/4/08, 11/5/08, 11/7/08, 11/10/08, 11/11/08, 11/18/08, 11/20/08, 12/10/08, 12/12/08, 12/16/08, an impermissible utilization limitation (see below).

11. Defendant’s explanation of the denial reason consisted of providing a link to a website in their “Explanation of Review” which fails to provide the medical provider with a statutory basis for the NCCI edits. (See Deposition of Harold Ly with attached exhibits)

12. The Court must now address whether it was permissible for State Farm to deny payment on recognizable CPT codes under the Medicare Part B fee schedule. State Farm argues that such limitations are permissible pursuant to the NCCI edits and such limitations are payment limitations. This Court disagrees. This Court determines that NCCI limitations which prohibit physicians from administering certain services to a patient on the same day are clearly utilization limitations, prohibited by the PIP statute when an insurer chooses to pay pursuant to the permissive fee schedule found therein. If State Farm were permitted to both reimburse PIP medical benefits pursuant to the Medicare Part B fee schedule (which in almost all instances is less than a reasonable charge in the community) and utilize a Medicare limitation on either the number of treatments or other utilization, then it would be akin to having ones cake and eating it too.

13. Because the Defendant choose to utilize the permissive fee schedule found in the PIP statute effective 1/1/08, it is prohibited from applying any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation pursuant to Fla. Stat. § 627.736 (5)(a)(4). This Court finds that as a matter of law, the NCCI edits which the Defendant choose to utilize in denying the subject medical expenses constitutes an impermissible“limitation on the number of treatments or other utilization limits that apply under Medicare”and therefore, the Defendant is precluded from denying payment on that basis.

14. Further, this Court finds that the Defendant is precluded from defending this case on the basis that the subject CPT code charges were “unbundled” or that they were not properly coded since the Defendant failed to raise improper coding or violation of Fla. Stat. § 627.736(5)(b)(1)e (2008). Upcoding and unbundling under Fla. Stat. 627.736(5)(b)(1)(e) are affirmative defenses that must be plead.² As such, pursuant to the established precedent and Florida Rules of Civil Procedure, the Defendant has waived any affirmative defense based on an alleged upcoding or unbundling or services under Fla. Stat. 627.736(5)(b)(1)(e) or the subject policy of insurance.

15. The Court grants the Plaintiff’s Motion for Summary Judgment and instructs the Plaintiff to submit a Final Judgment calculating the outstanding medical expenses at 80% of 200% of Medicare Part B pursuant to a permissive fee schedule contained in Fla. Stat. § 627.736(5)(a)(2)(2008) plus statutory interest.

MEMORANDUM OF LAW

The subject policy of insurance went into effect on 5/20/08. It is well settled, that the statute in effect at the issuance of a contract of insurance controls the rights and liabilities of the parties. Lumbermens Mutual Casualty Company v. Ceballos, 440 So.2d 612 (Fla. 3rd DCA 1983); Hausler v. State Farm Mutual Automobile Ins. Co., 374 So.2d 1037 (Fla. 3rd DCA 1979); Menendez v. Progressive Express Ins. Co., Inc., 2010 WL 375080 (Fla. 2010) [35 Fla. L. Weekly S222b]. Therefore, the PIP statute with effective date 1/1/08 governs the rights and obligations of the parties in this instance.

Florida Statute § 627.736(5)(a)(2)(f), (5)(a)(3) and (5)(a)(4)

The PIP statute provides a very specific method of paying medical benefits when utilizing the permissive fee schedule found therein. In 2008, the Florida Legislature amended subsection (5)(a)(2)(f) and (5)(a)(3) of Fla. Stat. § 627.736 to allow insurers to limit PIP reimbursement to 80% of 200% 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.”

“In January of 1996, the Centers for Medicare & Medicaid Services (CMS) implemented the National Correct Coding Initiative (NCCI). This initiative was developed to promote correct coding of health care services by providers and to prevent Medicare payment for improperly coded services. NCCI consists to automatic edits provided to the carriers to evaluate claim submissions when a provider bills more than one service for the same beneficiary on the same dates of service.” Medicare’s National Correct Coding Initiative, Dept. Of Health and Human Services, Office of the Inspector General (Sept. 2003). The CMS is also the federal agency in charge of administering the Medicare program, and it updates and approves the physicians schedule annually. See 42 U.S.C. § 1395w-4(b)(1).

The NCCI is a separate schedule from the participating physicians schedule, and the fact the Medicare employs the NCCI to bar payments for services provided on that same day does not, in the absence of statutory language to the contrary, lead to the conclusion that a private automobile insurer may limit a claim based upon the NCCI edits when reimbursing a PIP claim. See Koile v. State, 934 So. 2d 1226, 1230-1231 (Fla. 2006) [31 Fla. L. Weekly S501a]:

When the statute is clear and unambiguous, courts will not look behind the statute’s plain language for legislative intent or resort to rules of statutory construction to ascertain intent. See Lee County Elec. Coop., Inc. v. Jacobs, 820 So.2d 297, 303 (Fla. 2002) [27 Fla. L. Weekly S379a]. In such instance, the statute’s plain and ordinary meaning must control, unless this leads to an unreasonable result or a result clearly contrary to legislative intent. See State v. Burris, 875 So.2d 408, 410 (Fla. 2004) [29 Fla. L. Weekly S149a]. When the statutory language is clear, “courts have no occasion to resort to rules of construction — they must read the statute as written, for to do otherwise would constitute an abrogation of legislative power.” Nicoll v. Baker, 668 So.2d 989, 990-91 (Fla. 1996) [21 Fla. L. Weekly S96a].

Any limitations permitted under Florida’s PIP statute are expressly contained therein, specifically in § 627.736(5)(a)(2.(a)-(f) and 3.-5. ISOT Medical Center, Corp. (a/a/o Flor Maria Gomez) v. State Farm Mut. Auto. Ins. Co., Case No.: 09-5562 SP 26 (02) (Fla. County Court 11th Jud. Cir., Judge Gladys Perez 8/5/2010) [17 Fla. L. Weekly Supp. 1237a]. The statute permits limiting reimbursement to participating physicians schedule of Medicare Part B. Id. Nowhere in the amended PIP statute does the legislature permit the use of any other schedule, government or otherwise, which Medicare considers in further limiting its claims. Id.

In Section 627.736 (5)(a)(4), the Legislature recognizes the Medicare uses a variety fo guides to limit payments and forbids their application in PIP cases:

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 of limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes. (Emphasis added)

According to an analysis of Florida’s PIP Statute in All Family Clinic of Daytona Beach, Inc. v. State Farm Mut. Ins. Co., 685 F. Supp. 2d 1297, WL 569881, 5 (S.D. Fla. 2010) [22 Fla. L. Weekly Fed. D352a], the “Statute does not limit reimbursements to what is “allowable” under the Medicare statute generally.” The court also rejected State Farm’s argument that “Florida’s No-Fault Statute should be interpreted to mean the amount actually allowed by Medicare.” Id at 6 (holding that State Farm’s reliance on the OPPS fee schedule to reimburse a provider under the PIP statute was inappropriate).

In Bayview Chiropractic Center, P.A., a/a/o Jean Capozzoli v. State Farm Mutual Automobile Insurance Company, Case No. 09-00609 (Fla. 11th Jud. Cir. March 13, 2010, Hon. Gloria Gonzalez-Mayer) [17 Fla. L. Weekly Supp. 589b] and Peter J. Doran, D.C., P.A. (a/a/o Jaime Lo Bianco) vs. State Farm Mutual Automobile Insurance Company, Case No. 09-09341 SP 26 (04) (Fla. 11th Jud. Cir. April 5, 2010, Hon. Gloria Gonzalez-Mayer) [17 Fla. L. Weekly Supp. 590a], the Court determined “that NCCI limitations which prohibit physicians from administering certain services to a patient on the same day are clearly utilization limitations.” (Emphasis added). Further, the Court found “The current PIP Statute clearly prohibits insurers from applying ‘any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation.” Id.

As such, based on the rulings in Bayview Chiropractic Center, P.A., a/a/o Jean Capozzoli and Peter J. Doran, D.C., P.A. (a/a/o Jaime Lo Bianco), the Defendant denied CPT Code 97124 based on impermissible NCCI utilization limitations. Further, the Defendant is not allowed to use NCCI edits which are a utilization limit designed specifically for Medicare in determining whether to reimburse a medical provider for services billed for injuries sustained in a motor vehicle accident. See John S. Virga, D.C., P.A. a/a/o Jennifer Crumpler v. State Farm Mutual Insurance Company, Case No.: 2009-02395 SP 26 (Miami-Dade Cty. Ct. Dec. 13, 2009) [17 Fla. L. Weekly Supp. 383a]; John S. Virga, D.C., P.A. a/a/o Yueming Lei v. State Farm Mutual Insurance Co., Case No.: 2009-01769 SP 26 (Miami-Dade Cty. Ct. Jan. 16, 2010) [17 Fla. L. Weekly Supp. 384a]; John S. Virga, D.C., P.A. a/a/o Abraham Zevuloni v. State Farm Mutual Insurance Co., Case No.: 2009-01768 SP 26 (Miami-Dade Cty. Ct. Jan. 19, 2010) [17 Fla. L. Weekly Supp. 380b]; Advanced Chiropractic & Medical Center (Sidoles Vilsinnor) v. State Farm Fire & Casualty Co., 16 Fla. L. Weekly Supp. 1161d (Fla. 17th Jud. Cir. 2009).

When there is evidence that the Medicare fee schedules exclude payment for a service, as opposed to reducing payment for the service, the insurer is nonetheless obligated to pay for that service by use of other fee determinations provided by the PIP law. Otherwise, the PIP insurer is avoiding its obligation under the contract of insurance and PIP statute to pay for medically necessary services. Advanced Chiropractic & Medical Center (Sidoles Vilsinnor). CPT code 97124 is reimbursable under the Medicare Part B Fee schedule, however, Defendant chose not to pay this CPT code based on an impermissible Medicare utilization limitation. Defendant must reimburse the provider “regardless of whether such provider would be entitled to reimbursement under Medicare.” Fla. Stat. § 627.736 (5)(a)(4).

National Correct Coding Initiative (NCCI) Edits

The Defendant must reimburse Quality Medical Group, Inc. for CPT Code 97124 which was denied based on an impermissible Medicare utilization limit, NCCI edits, because (1) it was denied for an improper reason under the Florida PIP Statute, (2) it was otherwise reimbursable under the Medicare fee schedule, and (3) they were medically necessary when performed. (See affidavits of treating physicians filed in support of the Plaintiff’s Motion for Summary Judgment which establishes that each of the physiotherapy modalities performed on the patient and subsequently billed to State Farm were medically necessary on the day that the services were rendered and in conjunction with the other services performed on the patient that day. Each of the modalities performed were medically necessary independent of the other modalities performed on the same day and assisted the doctor in the treatment and prognosis of the patient.).

Defendant denied payment for CPT Code 97124 because the NCCI edits disallow Medicare Part B to pay for particular CPT codes billed on the same day which is an improper denial reason as the Florida PIP statute specifically prohibits an insurance company from applying“any limitation on the number of treatments or other utilization limits that apply under Medicare”. Fla. Stat. § 627.736(5)(a)(4). (Emphasis added). The purpose of the NCCI edits, therefore, is to prevent providers from utilizing a therapy on the same day that they utilize a different therapy. Courts in Miami-Dade and Broward County have determined, based on the plain language of the statute, that denying codes based on NCCI is an impermissible use of a utilization limitation according to Florida Statutes Section 627.736 (5)(a)(4). See John S. Virga, D.C., P.A. a/a/o Jennifer Crumpler v. State Farm Mutual Insurance Company, Case No.: 2009-02395 SP 26 (Miami-Dade Cty. Ct. Dec. 13, 2009); John S. Virga, D.C., P.A. a/a/o Yueming Lei v. State Farm Mutual Insurance Co., Case No.: 2009-01769 SP 26 (Miami-Dade Cty. Ct. Jan. 16, 2010); John S. Virga, D.C., P.A. a/a/o Abraham Zevuloni v. State Farm Mutual Insurance Co., Case No.: 2009-01768 SP 26 (Miami-Dade Cty. Ct. Jan. 19, 2010); Advanced Chiropractic & Medical Center (Sidoles Vilsinnor) v. State Farm Fire & Casualty Co., 16 Fla. L. Weekly Supp. 1161d (Fla. 17th Jud. Cir. 2009).

In Bayview Chiropractic Center, P.A., a/a/o Jean Capozzoli v. State Farm Mutual Automobile Insurance Company, Case No. 09-00609 (Fla. 11th Jud. Cir. March 13, 2010, Hon. Gloria Gonzalez-Mayer) and Peter J. Doran, D.C., P.A. (a/a/o Jaime Lo Bianco) vs. State Farm Mutual Automobile Insurance Company, Case No. 09-09341 SP 26 (04) (Fla. 11th Jud. Cir. April 5, 2010, Hon. Gloria Gonzalez-Mayer), the Defendant, as in the present case, denied payment for CPT Code 97124 when rendered and billed on the same day as CPT Code 97140 pursuant to the NCCI limitations. Identical to this present case, the Defendant argued that such limitations are payment limitations. However, disagreeing with the Defendant, the Court determined “that NCCI limitations which prohibit physicians from administering certain services to a patient on the same day are clearly utilization limitations” Id. Further, the Court went on to state, “The current PIP statute clearly prohibits insurers from applying ‘any limitation on the number of treatments or other utilization limits that apply under Medicare or worker compensation.” As such, based on the previous rulings in Bayview Chiropractic Center, P.A., a/a/o Jean Capozzoli and Peter J. Doran, D.C., P.A. (a/a/o Jaime Lo Bianco), the Defendant improperly denied CPT Code 97124 based on NCCI utilization limitations.

As discussed above, in Miami-Dade County, the courts have determined “that NCCI limitations which prohibit physicians from administering certain services to a patient on the same date are clearly utilization limitations.” (emphasis added). John S. Virga, D.C., P.A. a/a/o Jennifer Crumpler; John S. Virga, D.C., P.A. a/a/o Yueming Lei; John S. Virga, D.C., P.A. a/a/o Abraham Zevuloni. Furthermore, the courts have stated that if it did not rule that NCCI constitute an impermissible utilization limitation, then “the Statute would become redundant” and “this would not be the logical intent of the legislature.” Id.

Lastly, the services performed were each independently medically necessary on the day on which they were performed in the professional opinion of the treating physician, which has not been refuted by the Defendant. In Advanced Chiropractic & Medical Center (Sidoles Vilsinnor) v. State Farm Fire & Casualty Co., the court found stated that “if a service is medically necessary the insurer must pay for it.” Fla. Stat. § 627.736(1) & (1)(a). (emphasis added) According to the 17th Circuit,

The Medicare agency decision in the instant case (disallowing billing for the two CPT codes on the same day in all instances) cannot be said to embody the intent of the Florida Legislature because: (1) the Medicare agency has nothing to do with implementing Florida PIP law; and (2) even if it did, the interpretation in this case does not implement the clearly expressed intent of the Florida Legislature that all necessary medical services be paid.

Advanced Chiropractic, 16 Fla. L. Weekly Supp. 1161d (emphasis added). In the instant case, Defendant denied payment for code 97124 because of NCCI edits, however, the Florida PIP Statute requires that a service be reimbursed if medically necessary. Here, each of the services performed on the patient were medically necessary as determined by the licensed physicians at Quality Medical Group, Inc. Specifically, each of the modalities performed and codes billed on a given day were medically necessary independent of the other modalities performed on the same day and assisted the physicians in the treatment and prognosis of the patient for the subject accident. (See Affidavits of the treating physician(s)). The Defendant has failed to claim that the services performed on the patient were not medically necessary, and therefore can make no argument as to medical necessity to rebut the affidavits of the treating physician(s). See Vega v. Travelers Indemnity Co., 520 So. 2d 73 (Fla. 3rd DCA 1988) (holding that the insurer must reimburse plaintiff for remaining charges and lost wages when the medical evidence was uncontroverted). Since the treatments performed and CPT codes billed were medically necessary, they must be reimbursed and the Defendant is prohibited from utilizing medicare limitations and/or utilizations.

Conclusion

The Plaintiff met its burden pursuant to the standards set forth under Florida law pertaining to summary judgment. This court finds that the Defendant must reimburse Plaintiff for code 97124 which was denied based on NCCI edits because the Defendant’s use of the NCCI edits is prohibited specifically under the Florida 2008 PIP Statute as a Medicare utilization limitation when it chooses to utilize the permissive fee schedule, each of the codes is otherwise reimbursable under Medicare, and all of the services performed were reasonable, related and medically necessary.

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¹The subject policy of insurance went into effect on 5/20/08.

²Progressive Consumers Insurance Company v. Craig A. Newman, D.C. (a/a/o Reem Riley), 15 Fla. L. Weekly Supp. 129a (Fla. 13th Jud. Cir. 2007). It is well settled, that the failure to plead an affirmative defense results in a waiver of the defense. Kellogg v. Fowler, White, Burnett, Hurley, Banick & Strickroot, P.A, 807 So.2d 669 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D2811a]. Further, Florida Rule of Civil Procedure 1.140(h)(1) states, “A party waives all defenses and objections that the party does not present either by motion under subdivision (b), (e), or (f) of this rule or, if the party has made no motion, in a responsive pleading except as provided in subdivision (h)(2).”