19 Fla. L. Weekly Supp. 127a
Online Reference: FLWSUPP 1902NEWBInsurance — Personal injury protection — Coverage — Where insurer elected to reimburse medical provider pursuant to permissive statutory fee schedule and applied Outpatient Prospective Payment System cap, caps insurer cannot belatedly contest reasonableness of charge submitted by provider following decision by district court of appeal disallowing use of OPPS cap
ALL FAMILY CLINIC OF DAYTONA BEACH, INC. d/b/a FLORIDA MEDICAL ASSOCIATES a/a/o BRIANA NEWBY, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2009 10873 CODL, Division 71. October 7, 2011. Bryan A. Feigenbaum, Judge. Counsel: Kimberly P. Simoes, The Simoes Law Group, P.A., Deland, for Plaintiff. John Morrow, Conroy Simberg, Orlando, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FORFINAL SUMMARY JUDGMENT AND FINALJUDGMENT IN FAVOR OF PLAINTIFF
THIS CAUSE is before the Court on Plaintiff’s Motion for Final Summary Disposition certificate date July 18, 2011, and it’s Supplemental Memorandum in Support of Motion for Final Summary Judgment, certificate date September 7, 2011. The Court having considered same, having considered the submissions by each party, having considered the evidence submitted, having heard oral argument made on behalf of the parties on September 9, 2011, and being otherwise duly advised in the premises, orders as follows:
I. Background.
On August 11, 2008, State Farm’s insured received an MRI from All Family Clinic (“AFC”). AFC submitted a bill in the amount of $1,811.96 for code 72148 and $1,837.18 for code 72146 to State Farm. State Farm allowed reimbursement in the amount of $805.38 for the 72148 and $816.62 for the 72146. On the Explanation of Review provided to AFC, State Farm advised,
“337 Effective January 1, 2007, the payment for the technical portion has been capped at the Outpatient Prospective Payment System (OPPS) amount multiplied by the applicable fee schedule percentage pursuant to regulatory statute(s).”
Thereafter, AFC submitted a demand letter to State Farm and, when no additional payment was forthcoming, the present lawsuit The Plaintiff filed its Motion for Summary Judgment on July 18, 2011, asserting that State Farm had miscalculated the minimum. reimbursement due for the MRI services by applying the “OPPS cap”.
On July 6, 2011, the Second District Court of Appeals rendered its opinion in the case of Nationwide Mut. Fire Ins. Co. et al vs. AFO Imaging, Inc., Nos. 2D10-929, 2D10-2274 2011 WL 2622311 (Fla. 2d DCA July 6, 2011) [36 Fla. L. Weekly D1463b]. In that case the Court held that automobile insurers such as State Farm could not cap their reimbursement of MRI services by using the Medicare Hospital Outpatient Prospective Payment System (OPPS). Additionally the Court held that the minimum amount due under Fla. Stat. §627.736 (5)(a)2.f., (5)(a)3., and (5)(a)4., for MRI services performed in a nonemergency, nonhospital setting is based on 200% of the participating physicians fee schedule of Medicare Part B, if the PIP insurer used that permissive fee schedule methodology.
On July 21, 2011, AFC noticed its motion for final summary disposition for hearing to occur on September 9, 2011. On August 23, 2011, AFC filed State Farm’s Verified Answers to Interrogatories and the deposition of Daniel Merrigan, a State Farm employee, taken in All Family Clinic of Daytona Beach, Inc. vs. State Farm Mut. Auto. Ins. Co., 685 F. Supp. 2d 1297 (S.D.Fla. 2010) [22 Fla. L. Weekly Fed. D352a]. On September 7, 2011, AFC filed its Request for Judicial Notice of these documents pursuant to Fla. Stat. §90.202 and §90.203.
II. The Summary Judgment Hearing
The hearing on AFC’s motion for final summary disposition commenced on September 9, 2011. Over State Farm’s objection, the Court granted AFC’s request for judicial notice and admitted the evidence of State Farm’s Verified Answer to Interrogatories and the deposition of Daniel Merrigan, taken in the All Family case. At the hearing AFC established through undisputed record evidence that State Farm reimbursed all No Fault and Medical Payment claims pursuant to the methodology set forth in Fla. Stat. §627.736(5)(a)2.f. State Farm presented no affidavit or other evidence to challenge the Plaintiff’s evidence that State Farm invoked and selected the permissive fee schedule in calculating reimbursement under its policy provisions.
AFC argued that irrespective of the policy language, the minimum reimbursement under Florida No Fault is the amount set forth under Fla. Stat. §627.736(5)(a)2.f. AFC argued to the Court that pursuant to Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63 (Fla 4th DCA 2011) [36 Fla. L. Weekly D1062a], State Farm’s failure to incorporate the language of Fla. Stat. §627.736(5)(a)2.f. into its policy can only increase State Farm’s liability to its policyholder. AFC argued that State Farm’s failure to comply with Kingsway did not negate the floor of reimbursement which is the amount specified by Fla. Stat. §627.736(5)(a)2.f. Furthermore, AFC argued that although State Farm may not be contractually entitled to take advantage of the limitations in Fla. Stat. §627.736(5)(a)2.f., by adopting that fee schedule as an across-the-board policy in making payments under the PIP statutes, State Farm was bound to its reimbursement methodology.
In response, State Farm conceded that pursuant to AFO Imaging, it could not utilize the “OPPS cap” to calculate reimbursement under Fla. Stat. §627.736(5)(a)2.f. However, State Farm contended that it could not be found to have “elected” to utilize the permissive fee schedule in Fla. Stat. §627.736(5)(a)2.f. because it was not legally entitled to do so pursuant to Kingsway Amigo Ins. Co. Instead, State Farm argued that because it could not invoke the permissive fee schedule of Fla. Stat. §627.736(5)(a)2.f., it was able to rely on its policy language which allows it to pay a “reasonable charge” pursuant to Fla. Stat. §627.736(5)(a)l. Thus, State Farm argued that summary judgment was inappropriate because AFC had the burden of proof that its charge is reasonable which is an issue of fact for the jury.
III. Findings of Fact and Law
In this lawsuit AFC contends that State Farm failed to properly reimburse it for the MRI services performed on State Farm’s policyholder. AFC contends that State Farm utilized the statutory fee schedule to determine the reimbursement rate under its policy, but did not pay the correct amount under Fla. Stat. §627.736(5)(a)2.f. because State Farm erroneously applied the “OPPS cap” to the allowable reimbursement. AFC further contends that the minimum reimbursement for MRI services under Florida No Fault is the amount proscribed in Fla. Stat.§627.736(5)(a)2.f. This Court agrees that if the permissive fee schedule methodology of Fla. Stat. §627.736(5)(a)2.f. is used by the PIP insurer, the PIP insurer cannot apply the “OPPS cap”.
As the record evidence clearly indicates, at the time the bills were incurred, submitted to and paid by State Farm, State Farm utilized the provisions of Fla. Stat. §627.736(5)(a)2.f. to determine the reimbursement for MRI services under its policy. State Farm’s position was that it was entitled to avail itself of the limitations in Fla. Stat. §627.736(5)(a)2.f. in adjusting its claims and State Farm did, in fact, utilize the fee schedule set forth in Fla. Stat. §627.736(5)(a)2.f. in calculating the reasonable reimbursement rates under its policy. Upon learning that it may not be entitled to contractually invoke the payment limitations of Fla. Stat. §627.736(5)(a)2.f., State Farm receded from its reliance upon the statutory fee schedule and argued that it should be exposed to potentially owing more than the amount proscribed by the fee schedule in Fla. Stat. §627.736(5)(a)2.f. or potentially owing less than the minimum amount allowed under Fla. Stat. §627.736(5)(a)2.f.
Florida’s No-Fault Statute is designed to provide insurance without regard to fault. Fla. Stat. §627.731 (2006). Every policy under the No-Fault Statute must provide up to $10,000 for loss sustained as a result of “bodily injury, sickness, disease, or death arising out of ownership, maintenance, or use of a motor vehicle . . .” Fla. Stat. §627.736(l). In 2008, the Florida legislature amended Fla. Stat. §627.736(5)(a)2.f. and (a)3. to clarify that the “participating fee schedule” of Medicare Part B is the proper schedule to be used when reimbursing providers under the No-Fault Statute if the PIP insurer opts for the permissive methodology of Fla. Stat. §627.736(5)(a)2. See, Ch. 2008, 220, Laws of Fla. (2008). See, Florida Senate’s House Message Summary dated May 1, 2008. As amended, Fla. Stat. §627.736(5) 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 of 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 allowable amount under the participating physicians schedule applicable 2007
Medicare Part B for 2007 fee schedule
for medical services, supplies, and care subject to Medicare Part B.
Ch. 2008-220, Laws of Fla. (2008) (changes in original). The amendment clarifies that PIP reimbursement for medical services1 would be based on 200 percent of the “allowable amount under the ‘participating physicians’ schedule of Medicare Part B for 2007.” No other fee schedule, or limitations on the same, are specified in the No-Fault Statute, or are mentioned in any legislative history of the clarified No-Fault Statute.
In fact, Fla. Stat., §627.736(5)(a)4. specifically limits a PIP insurer’s ability to rely on Medicare for any purpose other than using “the allowable amount under the participating physicians schedule of Medicare Part B” as a baseline reimbursement level. Fla. Stat. §627.736(5)(a)4. states:
(5) CHARGES FOR TREATMENT OF INJURED PERSON.-
(a)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.
IV. Opinion of the Court.
As found by the Second District Court in AFO Imaging, once a PIP insurer uses the permissive fee schedule methodology of Fla. Stat. §627.736(5)(a)2., the allowable amount under the participating physicians schedule of Medicare Part B sets the baseline value of MRI services which must be reimbursed by PIP insurers to MRI facilities in Florida. AFO Imaging, 2011 WL 2622311 at *2. Additionally, the participating physicians fee schedule Medicare Part B for 2007 must be used when the Medicare fee schedule in effect at the time the MRI services are rendered is “less than the allowable amount under the participating physicians fee schedule Medicare Part B for 2007.” Accordingly, the participating physicians schedule is the proper schedule under Medicare Part B. Once the PIP insurer crosses the proverbial Rubicon and uses the permissive fee schedule methodology of Fla. Stat. §627.736(5)(a)2., then the minimum reimbursement a PIP insurer must pay an MRI provider is based on 200% of the schedule for 2007. Fla. Stat. §627.736(5)(a)4, further prohibits a PIP insurer from applying any other Medicare limitations, “regardless of whether such provider would be entitled to reimbursement under Medicare.”
From the inception of this litigation until shortly before the September 9, 2011 hearing on the Plaintiff’s motion for summary disposition, State Farm had availed itselfof the provisions of Fla. Stat. §627.736(5)(a)2.f. State Farm’s Explanation of Review identifies Fla. Stat. §627.726(5)(a)2. as its basis for the reimbursement rate selected. State Farm’s Verified Answers to Interrogatories in the All Family matter affirmed that this was the payment methodology utilized by State Farm in the payment of No Fault claims. The deposition of Daniel Merrigan established that State Farm made a business decision to reimburse all MRI providers based upon the permissive fee schedule of Fla. Stat. §627.736(5)(a)2.f. Thus, this Court finds that the methodology selected and utilized by State Farm under the contract of insurance at issue in this case is the fee schedule established at Fla. Stat. §627.736(5)(a)2.f.
Until shortly before the hearing on September 9, 2011, State Farm contended and AFC agreed, that the issue presented in this case was a legal question regarding whether State Farm had properly calculated the amount due to AFC for the MRI services pursuant to Fla. Stat. §627.736(5)(a)2.f.2 It is without dispute that State Farm applied the “OPPS cap” to the reimbursement rate for the MRI services. This resulted in a difference of $260.90 for CPT code 72148 and $260.12 for CPT code 72146 between the 200% of the participating physicians fee schedule Medicare Part B and the “OPPS cap” amount paid by State Farm. AFC seeks the difference in these amounts and no more. As reflected in the preceding paragraphs, subsections (5)(a)2.f. and (5)(a)3., as amended by the Florida Legislature in 2008, expressly designated “the participating physicians schedule of Medicare Part B” as the operative fee schedule to be utilized in computing the minimum amount the insurance companies were statutorily allowed3 to remit for the type of medical services, supplies, and care provided to the PIP insureds by the MRI providers. AFO Imagining, Inc., 2011 WL 2622311. Thus, AFC is entitled to the minimum reimbursement rate allowed under Florida No Fault once State Farm made the decision to rely on Fla. Stat. §627.736(5)(a)2.
State Farm now wants to rely on Kingsway to argue that it had no right to use the fee schedule in Fla. Slat. §627.736(5)(a)2., as its policy did not provide for it. State Farm can utilize whatever payment methodology it wants to determine what a reasonable reimbursement rate will be under its policy. As indicated in the insurance policy in question, State Farm could have relied on a variety of factors to determine whether a provider has submitted a reasonable charge since the policy tracks the language of Fla. Stat. §627.736(5)(a)1.
Under Kingsway, State Farm argues that their use of Fla. Stat. §627.736(5)(a)2. was impermissible. Thus, this would allow the Plaintiff to argue for the amount the provider originally billed and for State Farm to argue their actual payment was reasonable, not under the fee schedule and “OPPS cap”, but by the first methodology [Fla. Stat. §627.736(5)(a)1.], and that it should be a jury question.
State Farm however did not choose to follow their policy methodology but opted to follow the permissive fee schedule method. Once State Farm adopted to use the fee schedule as their methodology, albeit with the “OPPS cap”, they have made a decision to use the fee schedule as their payment methodology. State Farm thus waived their right to fall back on the first methodology.
It is undisputed that State Farm made a business decision to utilize the provisions of Fla. Stat. §627.736(5)(a)2.f. for all claims when determining what the reasonable reimbursement rate would be under its insurance policy. The Plaintiff did not force this choice. This was State Farm’s determination of what a reasonable reimbursement rate would be and State Farm is bound by its decision to utilize that methodology. Therefore, it is neither unfair nor inequitable for State Farm to be bound by its decision to use the fee schedule set forth by Fla. Stat. §627.736(5)(a)2.f. and State Farm must pay the rates provided by the participating fee schedule of Medicare Part B, not the “OPPS cap” rates. See AFO Imaging, 2011 WL 2622311.
WHEREFORE, the Court finds that Plaintiff is entitled to Final Judgment in the amount of $521.02, plus prejudgment interest in the amount of $78.15 for a total Final Judgment in the amount of $599.17. This Court reserves jurisdiction for an award of attorney’s fees and costs incurred by Plaintiff.
FOR WHICH LET EXECUTION ISSUE.
__________________
1Again, assuming the PIP insurer opted for the permissive methodology of Fla. Stat. §627.736(5)(a)2.
2See State Farm’s Motion For Summary Disposition/Final Summary Judgment, page 4, “[t]he legal issue in this case involves the interpretation of Fla. Stat. §627.736(5)(a)(2) and §627.736(5)(a)(3)”.
3Assuming that the PIP insurer used the permissive fee schedule methodology of Fla. Stat. §627.736(5)(a)2.
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