25 Fla. L. Weekly Supp. 1025a

Online Reference: FLWSUPP 2512DIZAInsurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Bad faith — Application of National Correct Coding Initiative edits — Where at time PIP insurer denied reimbursement of billed CPT codes based upon NCCI edits there was binding authority holding that NCCI edits are utilization limits prohibited by PIP statute, insurer’s application of NCCI edits was bad faith claims adjusting that exposes it to liability beyond policy limits

INTERVENTIONAL SPINE CENTER, LLC., a Florida limited liability company, as assignee of Nadia Dizaji, Plaintiff, v. GEICO GENERAL INSURANCE COMPANY, a For-Profit-Insurance Company, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 2014-003783-SP-23. February 26, 2018. Linda Singer-Stein, Judge. Counsel: Andres Alonso, Shaked Law Firm, P.A., Aventura, for Plaintiff. Mehdi Manseur, Coral Gables, for Defendant.

ORDER GRANTING PLAINTIFF’S MOTIONFOR SUMMARY JUDGMENT

THIS CAUSE came before the Court on January 30, 2018, upon Plaintiff’s Motion for Summary Judgment regarding the Defendant, GEICO GENERAL INSURANCE COMPANY’s, application of National Correct Coding Initiative (NCCI) edits as a bad faith denial of PIP benefits and exhaustion of PIP benefits. The Court having considered the motions, having heard argument of counsel, and being otherwise fully advised, HEREBY GRANTS Plaintiff’s Motion for Summary Judgment regarding the Defendant’s application of National Correct Coding Initiative (NCCI) edits as an improper denial of PIP benefits and exhaustion of PIP benefits.

ISSUE

The issue before this Court is whether the application of National Correct Coding Initiative (NCCI) edits to bar payment of Personal Injury Protection (PIP) benefits is improper bad faith claims adjusting exposing the Defendant to liability for PIP benefits beyond policy limits.

UNDISPUTED FACTS

This case arises out of a claim for Personal Injury Protection (PIP) benefits filed by the Plaintiff, INTERVENTIONAL SPINE CENTER, LLC, as assignee of the Defendant’s insured, Nadia Dizaji. Nadia Dizaji was covered under a PIP policy of insurance issued by the Defendant. This policy was in full force and effect on the date of the accident, October 22, 2013. The policy of insurance provided Nadia Dizaji with $10,000.00 in PIP benefits.

The Defendant received the Plaintiff’s bills for the dates of service of December 17, 2013, an assignment of benefits, and a Standard Disclosure and Acknowledgement Form (D & A Form). The Defendant denied reimbursement for CPT 95851, and CPT 95832, based upon National Correct Coding Imitative (NCCI) edits. The Defendant pled exhaustion of benefits as an affirmative defense. Plaintiff filed a Motion for Summary Judgment as to this affirmative defense requesting this Court to determine whether the application of National Correct Coding Initiative (NCCI) edits to bar payment of Personal Injury Protection (PIP) benefits is improper bad faith claims adjusting exposing the Defendant to liability for PIP benefits beyond the policy limits.

PLAINTIFF’S POSITION

The Plaintiff first argued that Defendant paid the last medical provider in error because it improperly denied Plaintiff’s claim by applying NCCI edits and then paid other medical providers. Plaintiff argued further that Florida’s PIP Statute and Geico’s policy of insurance do not authorize the use of NCCI edits to bar recovery of PIP benefits. The Plaintiff contended that interpretation of whether the PIP Statute and Geico’s insurance policy allow for the use of NCCI edits is a matter of law to be determined by the Court. Additionally, the Plaintiff argued that Geico’s use of NCCI edits to bar recovery of PIP benefits and subsequent exhaustion of benefits constituted bad faith claims adjusting in the context of Florida’s PIP statute exposing Geico to liability beyond the $10,000 PIP policy limits.

The Plaintiff maintained that NCCI edits are utilization limits — which are prohibited under the PIP Statute. The Plaintiff cited Florida Statute § 627.736(5)(a)(3), which provides: “Subparagraph 1. 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.” (emphasis added). The Plaintiff relied on various Circuit and County Orders, all of which hold NCCI edits are utilization limitations.¹

The Plaintiff next contended that all payments made after denial of certain CPT codes to Plaintiff based on NCCI edits should be considered gratuitous payments and not count against the Defendant due to the improper application of NCCI edits. The Plaintiff referenced the Code Pair edits table provided by the Department of Health and Human Services Center for Medicare & Medicaid Service.

DEFENDANT’S POSITION

The Defendant contended that under contract law in the state of Florida, a judgment may not exceed policy limits absent a showing of bad faith. The Defendant relies on Sheldon v. United Services Auto. Ass’n, 55 So. 3d 593 (Fla. 1st DCA 2010) [36 Fla. L. Weekly D23a] holding that Florida courts have established that, once an insurer has paid out the policy limits to the insured (or to various providers as assignees), it is not liable to pay any further PIP benefits, even those that are in dispute; Simon v. Progressive Express Insurance Company, 904 So.2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]; Progressive American Ins. Co. v. Stand-UP MRI of Orlando, 990 So.2d (Fla. 1st DCA 2010) [33 Fla. L. Weekly D1746a]. [Editor’s Note: Correct cite appears to be 990 So.2d 3 (Fla. 5th DCA 2008.[.

Defendant also cited Circuit court orders throughout Florida which have held that a PIP insurer is not liable for benefits to a provider following good faith exhaustion, whether exhaustion takes place early in the adjustment of a claim, after a demand letter, or after suit. MTM Diag., Inc. v. State Farm, 9 Fla. L. Weekly Supp. 581e (13th Jud. Cir. Hillsborough Cty. Nov. 20, 2000) (Appellate); Progressive Express Ins. Co. v. Millennium Diagnostic Imaging Ctr., Inc. a/a/o Alfonso Taboada, 14 Fla. L. Weekly Supp. 938a (11th Jud. Cir. Miami-Dade Cty. Jul. 19, 2007) (Appellate); Tampa Trauma Med. Ctr., Inc. a/a/o Carlos Gonzalez v. State Farm, 17 Fla. L. Weekly Supp. 10b (13th Jud. Cir. Hillsborough Cty. Oct. 26, 2009) (Appellate); Rhodes & Anderson, D.C.P.A. a/a/o Jessica Day v. Progressive Am. Ins. Co., 18 Fla. L. Weekly Supp. 925b (12th Jud. Cir. Sarasota Cty. Dec. 9, 2009) (Appellate); Regional MRI of Orlando, Inc., a/a/o Lorraine Gerena v. State Farm, 18 Fla. L. Weekly Supp. 563a (9th Jud. Cir. Orange Cty. Feb. 23, 2011) (Appellate); USAA Cas. Ins. Co. v. Oakland Park, MRI, Inc. a/a/o Antonia Gale, 19 Fla. L. Weekly Supp. 22b (17th Jud. Cir. Broward Cty. Aug. 31, 2011) (Appellate).

Defendant has taken the position that it adjusted the benefits available to the assignor and issued payment at a reasonable amount, calculated with attention to the Participating Level of Medicare Part B fee Schedules as authorized by both the policy and the Florida No-Fault Law. Defendant has alleged that the NCCI edits used in this lawsuit are permissible payment limitations under the statute and not utilization limitations as alleged by the Plaintiff.ANALYSIS

This claim arises under the 2013 PIP Statute, and Geico’s policy, which incorporates its A-30 FL (03/11) Endorsement. Unlike the prior version of the PIP Statute, the 2013 PIP Statute now allows insurers to use “Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers, to determine the appropriate amount of reimbursement for medical services, supplies, or care. . .” See Fla. Stat. § 627.736(5)(a)(3).

The Court is asked to decide whether the application of National Correct Coding Initiative (NCCI) edits to bar payment of Personal Injury Protection (PIP) benefits is improper bad faith claims adjusting exposing the Defendant to liability for PIP benefits beyond policy limits. This Court finds that these are questions of law for the Court. See SOCC, P.L. v. State Farm Mut. Auto. Ins. Co., 95 So. 3d 903 (Fla. 5th DCA 2012) [37 Fla. L. Weekly D1663a]; Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 86 So. 3d 1113 (Fla. 2012) [36 Fla. L. Weekly D1062a.][Editor’s Note: Correct cite appears to be 63 So.3d 63 (Fla. 4th DCA 2011).]

A. The 2013 Amendments to the PIP Statute did not incorporate NCCI Utilization Edits

In 2013 the Florida Legislature Amended the PIP statute to include the following language:

Subparagraph 1. 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 1. must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provider is 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. However, subparagraph 1. does not prohibit an insurer from using the Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers, to determine the appropriate amount of reimbursement for medical services, supplies, or care if the coding policy or payment methodology does not constitute a utilization limit.

Fla. Stat. 627.736(5)(a)(3)

The intent of the legislature was to clarify that an insurer may use Medicare coding and payment limitations such as (1) the Physicians Fee schedule Part B, (2) the Clinical Laboratory Fee Schedule, (3) the Ambulance Fee Schedule, etc., as long as the insurance policy clearly elects to use one of these payments limitations and if the coding policy does not constitute a utilization limitation. The Florida Legislature made it clear in the final sentence that an insurer is prohibited from using utilization edits or limits on the number of treatments. Had the Florida Legislature desired to incorporate utilization edits, it would have done so. The plain meaning of the statute clearly states the opposite. This court finds that the Florida Legislature intentionally prohibited utilization limitations, such as NCCI, to be applied to PIP claims. This finding is also supported by a plain reading of the statute and legislative history. See House of Representatives Final Bill Analysis,. Bill CS/CS/HB 119.

B. NCCI Utilization Edits are Utilization Limitations and Not Payment Limitiations

Now the Court turns to the question of whether NCCI utilization edits are utilization limitations or payment limitations. In 1996, the Centers for Medicare & Medicaid Services (CMS) did a Utilization Review of Medicare/Medicaid claims called the National Correct Coding Initiative (NCCI).² The purpose of NCCI was to “promote correct coding of health care services by providers and to prevent Medicare payment for improperly coded services. Falls Chiropractic Health Center a/a/o Keyla Rodriguez v. State Farm Casualty Company, 17 Fla. L. Weekly Supp. 1235a (Fla. Dade County Court 2010).

As a result of NCCI, utilization edits were established to prevent improper payment of Medicare and Medicaid claims when incorrect code combinations were reported. These are known as NCCI utilization edits. Florida case law is clear that NCCI utilization edits which deny certain code combinations billed on the same day are clearly utilization limitations. Quality Medical Group, Inc. a/a/o Jennifer Guarderas v. State Farm Mutual Automobile Company, 18 Fla. L. Weekly Supp. 219a (Fla. Dade County Court 2010). In that case the court held:

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.

Courts throughout the State, including those that are persuasive from the Appellate Division of the 11th Judicial Circuit Court, have all found that NCCI utilization edits are prohibited utilization limitations. Bayview Chiropractic Center, P.A., a/a/o Jean Capozzoli v. State Farm Mutual Automobile Insurance Company, 17 Fla. L. Weekly Supp. 589b (Fla. 11th Cir. App. Ct. 2010); Peter J. Doran, D.C., P.A. (a/a/o Jaime Lo Bianco) vs. State Farm Mutual Automobile Insurance Company, 17 Fla. L. Weekly Supp. 590a (Fla. 11th Cir. App. Ct. 2010); John S. Virga, D.C., P.A. a/a/o Jennifer Crumpler v. State Farm Mutual Insurance Company, 17 Fla. L. Weekly Supp. 383a (Dade County Court 2009); John S. Virga, D.C., P.A. a/a/o Yueming Lei v. State Farm Mutual Insurance Co., 17 Fla. L. Weekly Supp. 384a (Dade County Court 2010); John S. Virga, D.C., P.A. a/a/o Abraham Zevuloni v. State Farm Mutual Insurance Co., 17 Fla. L. Weekly Supp. 380b (Dade County Court 2010); Advanced Chiropractic & Medical Center Sidoles Vilsinnor v. State Farm Fire & Casualty Co., 16 Fla. L. Weekly Supp. 1161d (Fla. 17th Cir. App. Ct. 2009); Right Choice Medical & Rehab, Corp. a/a/o Martha Alvarez v. State Farm and Casualty Company, 21 Fla. L. Weekly Supp. 181a (Fla. Dade County Court 2011); ISOT Medical Corporation, a/a/o Maria Brito, v. State Farm, 17 Fla. L. Weekly Supp. 1244a (Fla. 11th Cir. Ct. 2011); Bayview Chiropractic Center, P.A., a/a/o Jean Capozzoli v. State Farm Mutual Automobile Insurance Company, 17 Fla. L. Weekly Supp. 589b (Fla. 11th Cir. Ct. 2010); Peter J. Doran, D.C., P.A. a/a/o Jaime Lo Bianco vs. State Farm Mutual Automobile Insurance Company, 17 Fla. L. Weekly Supp. 590a (Fla. 11th Cir. Ct. 2010); State Farm Fire and Casualty Company v. Champion Chiropractic & Rehab, Inc. a/a/o Samantha Cafiero, 20 Fla. L. Weekly Supp. 482a (Fla. 17th Cir. Ct. 2013); Pompano Beach Chiropractic Center, Inc. a/a/o Brian Garner v. State Farm Automobile Insurance Company, 19 Fla. L. Weekly Supp. 595b (Fla. Broward County Court 2012); Krystal Rehabiliation Services, Corp. a/a/o Crystal Santiago v. State Farm Fire and Casualty Company, 18 Fla. L. Weekly Supp. 1195a (Fla. Dade County Court 2011); Physicians Group of Sarasota, LLC a/a/o Jean Etiene v. State Farm Mutual Automobile Insruance Company, 20 Fla. L. Weekly Supp. 73a (Fla. Sarasota County Court 2011); Krystal Rehabiliation Services, Corp. a/a/o William Guzman v. State Farm Fire and Casualty Company, 18 Fla. L. Weekly Supp. 1190a (Fla. Dade County Court 2010); Quality Medical Group, Inc. a/a/o Rudolph Steadman v. State Farm Automobile Insurance Company, 18 Fla. L. Weekly Supp. 222a (Fla. Dade County Court 2010).

The Plaintiff provided an affidavit from Mr. Jeffrey Howard. Mr. Howard is an expert in the field of Medicare coding policies and payment methodologies. In the affidavit provided a history of NCCI and the reasons why Medicare created it. Furthermore, in the affidavit of Mr. Howard he opined “based on my review of the file in this case, the facts and opinions set forth above and the clear written intention of the Federal Government in creating NCCI, there can be no other conclusion except that NCCI is a utilization limit.” This Court finds Mr. Howard’s affidavit to be persuasive evidence in reaching the conclusion that NCCI edits are utilization limits. The Defendant argued that NCCI edits were used as a payment limitation and not a utilization limitation, therefore, they are permissible under the PIP Statute. However, the Defendant failed to file an affidavit to contradict Mr. Howard’s conclusion that NCCI is a utilization limit. Furthermore, the legislature drafted the 2013 version of the PIP statute knowing what the 5th DCA’s holding was in SOCC, P.L. v. State Farm Mut. Auto. Ins. Co., 95 So. 3d 903 (Fla. 5th DCA 2012) [37 Fla. L. Weekly D1663a].

The fact that the legislature was aware of the 5th DCA’s holding in SOCC, coupled with Mr. Howard’s convincing affidavit, this Court is persuaded by the reasoning that NCCI edits are utilization limits and not payment limitations as argued by the Defendant. If an insurer were permitted to reduce the bills based on the applicable fee schedule and use NCCI utilization edits at its discretion it would have the best of both worlds. This clearly was not the intent of the Florida Legislature when drafting the 2013 Amendments to the PIP Statutes.

C. The Defendant’s Improper Application of NCCI Edits Is Bad Faith Claims Adjusting Exposed Itself to Liability Beyond the PIP Policy Limits

The most important issue raised in this case is whether or not the Defendant is liable beyond the PIP policy limits due to its bad faith claims adjusting by using improper NCCI utilization edits to adjust Plaintiff’s claim. Court’s throughout the State of Florida have defined bad faith in the context of PIP Claims as using existing precedent to determine whether the reductions made to the insured’s bills were in conformity or contravention to the PIP statute’s mandate. See New Smyrna Imaging, LLC. a/a/o Chiemi Miles v. Garrison Property and Casualty Insurance Company, 22 Fla. L. Weekly Supp. 365a (Fla. Volusia County Court 2014); Westland South Medical Center, Inc. a/a/o Miriam Estrada v. United Automobile Insurance Company, 20 Fla. L. Weekly Supp. 442a (Fla. Dade County Court 2012).

In the instant case, the Defendant denied reimbursement CPT 95831, and CPT 95832 based upon National Correct Coding Imitative (NCCI) edits. At the time Defendant applied NCCI utilization edits to the subject claim, there was binding authority which prohibited NCCI utilization edits from being applied to PIP claims, specifically, the 2013 Amendments to Florida’s PIP statute, which will be discussed in more details below, and the existing case law. As a result Geico acted in bad faith when applying NCCI utilization edits to deny payment of certain CPT codes.

Geico filed an affirmative defense in the foregoing case was a claim that benefits were exhausted. In response to this affirmative defense Plaintiff has overcome the “benefits exhausted” defense by alleging bad faith adjusting on behalf of the Defendant. It is well settled in Florida, that in order to overcome the defense of “benefits exhausted” by the PIP insurer a Plaintiff must first establish the Defendant has acted in Bad Faith. In the instant case Plaintiff has shown that Defendant improperly applied NCCI utilization edits in the adjustment of Plaintiff’s valid claim, thus, overcoming the “benefits exhausted” defense plead by the Defendant. When Defendant attempts to use “benefits exhausted” as a defense to a claim for PIP benefits, it is unnecessary for Plaintiff to first establish liability beyond the policy limits and then plead Bad Faith through a separate cause of action as Plaintiff would never be able to overcome one without the other. The Plaintiff in this claim is entitled to payment for benefits of the CPT codes which were not paid along with statutory interest. The Plaintiff is not seeking any punitive damages in this case and therefore the Plaintiff is not entitled to any punitive damages.

CONCLUSION

Plaintiff’s Motion for Summary Judgment regarding whether the application of National Correct Coding Initiative (NCCI) edits to bar payment of Personal Injury Protection (PIP) benefits is bad faith claims adjusting exposing the Defendant to liability for PIP benefits beyond policy limits is an issue of law to be decided by this Court.

This Court finds that the 2013 PIP Statute allows insurers to use Medicare coding policies and payment methodologies to determine the appropriate amount of reimbursement, so long as it does not constitute a utilization limitation or provide a limit on the number of treatments.

This Court further finds that NCCI edits are utilization limits — which are prohibited by the PIP Statute. Most importantly, this Court determines that the use of NCCI edits to bar payment is bad faith claims adjusting exposing the Defendant to liability for PIP benefits beyond the policy limits. Thus, the Defendant’s application of NCCI edits to bar reimbursement was improper and the affirmative defense of exhaustion of benefits cannot be used as a defense to payment.

This court holds:

(1) The Defendant’s use of NCCI utilization edits to deny payment of PIP Benefits is bad faith claims adjusting.

(2) Due to Defendant’s bad faith claims adjusting, Defendant has exposed itself to liability beyond the PIP policy limits.

(3) Defendant may not use exhaustion of benefits as a shield when it adjusts claims in bad faith.

(4) The 2013 PIP Statute allows insurers to use Medicare coding policies and payment methodologies to determine the appropriate amount of reimbursement, so long as it does not constitute a utilization limitation or provide a limit on the number of treatments.

(5) NCCI edits are utilization limits — which are prohibited by the PIP Statute.

It is therefore ORDERED AND ADJUDGED that the Plaintiff’s Amended Motion for Summary Judgment is GRANTED.

__________________

¹See Quality Medical Group, Inc. a/a/o Jennifer Guarderas v. State Farm Mut. Auto. Ins. Co., 18 Fla. L. Weekly Supp. 219a (Fla. 11th Cir. Ct. 2010); ISOT Medical Center, Corp. a/a/o Thatiana Arroyave v. State Farm Mut. Auto. Ins. Co., 17 Fla. L. Weekly Supp. 1246a (Fla. Dade Cty. Ct. 2010); ISOT Medical Center, Corp. a/a/o Odamil Rosa v. State Farm Mut. Auto. Ins. Co., 17 Fla. L. Weekly Supp. 1242a (Fla. Dade Cty. Ct. 2010); Friedman Chiropractic Center a/a/o Noemi Aponte-Ali v. State Farm Mut. Ins. Co., 17 Fla. L. Weekly Supp. 1247a (Fla. Dade Cty. Ct. 2010); Peter J. Doran, D.C., P.A., a/a/o Jaime Lo Bianco v. State Farm Mut. Auto. Ins. Co., 17 Fla. L. Weekly Supp. 590a (Fla. Dade Cty. Ct. 2010); ISOT Medical Center, Corp. a/a/o Maria Brito v. State Farm Mut. Auto. Ins. Co., 17 Fla. L. Weekly Supp. 1244a (Fla. Dade Cty. Ct. 2010); Friedman Chiropractic Center a/a/o Hannah Ali v. State Farm Mut. Ins. Co., 17 Fla. L. Weekly Supp. 1243a (Fla. Dade Cty. Ct. 2010); John S. Virga, D.C., P.A. a/a/o Jennifer Crumpler v. State Farm Mut. Ins. Co., 17 Fla. L. Weekly Supp. 383a (Fla. Dade Cty. Ct. 2009); John S. Virga, D.C., P.A. a/a/o Yueming Lei v. State Farm Mut. Ins. Co., 17 Fla. L. Weekly Supp. 384a (Dade Cty. Ct. 2010); John S. Virga, D.C., P.A. a/a/o Abraham Zevuloni v. State Farm Mut. Ins. Co., 17 Fla. L. Weekly Supp. 380b (Fla. Dade Cty. Ct. 2010); Right Choice Medical & Rehab, Corp. a/a/o Martha Alvarez v. State Farm and Cas. Co, 21 Fla. L. Weekly Supp. 181a (Fla. Dade Cty. Ct. 2011); Bayview Chiropractic Center, P.A., a/a/o Jean Capozzoli v. State Farm Mutual Automobile Insurance Company, 17 Fla. L. Weekly Supp. 589b (Fla. 11th Cir. Ct. 2010) (All holding that NCCI edits are utilization limitations prohibited under the PIP Statute).

²See National Correct Coding Initiative (NCCI) Edits, http://www.cms.gov/Medicare/Coding/NationalCorrectCodInitEd/index.html?redirect=/nationalcorrectcodinited/.