25 Fla. L. Weekly Supp. 492a

Online Reference: FLWSUPP 2505CHRIInsurance — Personal injury protection — Coverage — Medical expenses — Reasonableness of charges — Summary judgment — Opposing affidavit filed by insurer does not preclude summary judgment in favor of medical provider on issue of reasonableness of MRI charge where opinion that nothing above 200% of Medicare fee schedule would ever be reasonable is not based upon sufficient facts or data and is not product of reliable principles and methods

PAN AM DIAGNOSTIC SERVICES, INC. (a/a/o Gaelle Chrisphonte), Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 15-12408 COCE 53. June 1, 2017. Robert W. Lee, Judge. Counsel: Caroline Martelli, Marks & Fleizher, P.A., Fort Lauderdale, for Plaintiff. Mark Rose, Deerfield Beach, for Defendant.

ORDER GRANTING PLAINTIFF’SMOTION FOR FINAL SUMMARY JUDGMENT

THIS CAUSE came before the Court on May 31, 2017 for hearing of the Plaintiff’s Motion for Final Summary Judgment, and the Court’s having reviewed the Motion, the entire Court file, and the relevant legal authorities; having heard argument; having made a thorough review of the matters filed of record; and having been sufficiently advised in the premises, the Court finds as follows:

The issue in this Motion is whether the Plaintiff’s charge for a lumbar MRI performed in January 2013 is reasonable. The Plaintiff billed State Farm $2,150.00 for the MRI. State Farm approved payment, but paid only the equivalent based on 200% of the Medicare rate, although as State Farm concedes, it had not properly elected the Medicare methodology in its policy. The parties advised the Court that this is the only issue remaining in the case. It is undisputed that the Plaintiff has established its prima facie case by affidavit of Roberta Kahana. The Defendant, however, attempts to demonstrate a disputed issue of material fact on the issue of reasonableness of the charge by the filed affidavit of Dr. Edward Dauer.

Dr. Dauer testified as to his charge for an MRI in Broward County which was set in 2004 and has not changed since (Aff. ¶18). He notes that he set his rate of $1,160.00 then at “approximately 200% of Medicare’s allowed amount.” (In actuality, the rate is slightly below 200% of the Medicare amount.)

It is further without dispute that State Farm based its reimbursement on 200% of the Medicare rate. The Defendant’s efforts to demonstrate a disputed issue of material fact through the affidavit of Dr. Dauer are unavailing, as the crux of Dr. Dauer’s affidavit is that nothing above 200% of the Medicare rate would ever be reasonable for medical services, as the following quotes demonstrate:

– I believe amounts higher than 200% of Medicare are unreasonable. The charges at my diagnostic center have not changed since 2004 because I know that Medicare’s allowed amount for these charges change at least once per year and I wanted to avoid changing my prices every year, including those year in which Medicare’s allowed amounts changed more than once (Aff. ¶18).

– Medicare is the second largest payor of medical expenses in the Country, but only when compared to all private health insurance companies combined; otherwise, Medicare is the single largest payor of medical expenses in the Country. As such, the Medicare Fee Schedule should be the polestar of what can be considered a reasonable charge (Aff. ¶21).

– [P]rior to 2008, the Florida PIP Statute had set a maximum base fee schedule for MRI scans of 175% or 200% of Medicare Part B for the year 2001 [ . . . ] (Aff. ¶22).

– [I]t appears that the Florida Legislature has regularly considered the reimbursement of medical services and treatment at 200% of Medicare Part B and the workers’ compensation fee schedule as an objective methodology in determining reasonable charge (Aff. ¶22).

– Medicare provides accurate market data [ . . .] and has been listed by the PIP Statute for decades as a methodology in determining a reasonable charge (Aff. ¶23).

– I would consider charges between 70% of the Medicare Fee Schedule and up to 200% of the Medicare Fee Schedule to reflect a reasonable range of charges for a lumbar spine MRI can in 2013 (Aff. ¶25).

– The basis for my opinion that any charge or payment in excess of approximately 200% of Medicare is unreasonable is because in the medical community, Medicare is considered to be an objective benchmark or “standard” for determining a reasonable charge. 100% or less of the Medicare fee schedule has been adopted as the base level of reimbursement by most insurance companies (Aff. ¶29).

Dr. Dauer further mentions the Medicare fee schedules in paragraphs 11, 12, 26, 30, and 31 of his affidavit.

Assuming that Dr. Dauer’s bald assertion gets over the Daubert threshold¹ — which this Court seriously doubts — this type of opinion has been repeatedly rejected by the courts as rendering the Florida Supreme Court’s decision in Virtual Imaging meaningless. See Hialeah Medical Assoc., Inc. v. United Automobile Ins. Co., Opinion, Case No. 12-229 AP (11th Cir. Ct. Mar. 7, 2014) [21 Fla. L. Weekly Supp. 487b] (appellate capacity); State Farm Mutual Automobile Ins. Co. v. Imaging Centers of Pensacola, Inc., Order Affirming Lower Court’s Orders and Judgments, Case No. 2012-AP-52 (1st Cir. Ct. Mar. 3, 2014) (appellate capacity) [21 Fla. L. Weekly Supp. 979a]; United Automobile Ins. Co. v. Hallandale Open MRI, Inc., Opinion, Case No. 12-19662 CACE (17th Cir. Ct. 2013) [21 Fla. L. Weekly Supp. 399d] (appellate capacity); Millennium Radiology LLC v. United Automobile Ins. Co., Order Granting Plaintiff’s Amended Motion for Summary Judgment, Case No. 11-17736 COCE (Broward County Ct. 2013).

The Court notes Dr. Dauer tacitly acknowledges that his rates for MRIs were set at a time when the Florida Legislature set the prices for MRIs in PIP cases by statute (Aff. ¶22). Whether a provider liked it or not, this was its only option. Thereafter, the Legislature repealed this portion of the statute which for a few years required PIP insurers to pay any charge that was “reasonable.” A few more years later, the Florida Legislature then reinstituted the involvement of the Medicare fee schedules, giving the insurers the option of paying either a “reasonable” charge or a rate based on 200% of the Medicare reimbursement amount, an option that must be elected in the insurance policy. In the instant cases, State Farm did not exercise the option of 200% of Medicare in its policy. Instead, it falls back on the “reasonable” charge standard. Dr. Dauer’s analysis renders the decision of the Florida Legislature to give two options to be meaningless. If the Florida Legislature had intended the Medicare fee schedules to be the bottom line for all medical charges in PIP, it could have clearly said so, as it did for MRIs for a few years several years ago.

Another flaw in Dr. Dauer’s analysis is the continued reliance on providers’ acceptance of payments at the 200% of Medicare rate, when for years they were doing so based on a hard-pressed construction of the statute pushed by insurers that was later determined by the Florida Supreme Court to be faulty. Indeed, this Court has previously held that the systematic and incorrect reimbursement on the part of PIP insurers cannot form the basis of an expert’s opinion that charges of a PIP provider are unreasonable, and such expert opinion is neither “based on sufficient facts or date” nor the “product of reliable principles and methods” as required by Florida Statute §90.702 (2016). See, e.g, Best American Diagnostic Center, Inc. v. State Farm Mutual Automobile Ins. Co., 23 Fla. L. Weekly Supp. 1075a (Broward Cty. Ct. 2015); Coastal Radiology, LLC v. State Farm Mutual Automobile Ins. Co., 22 Fla. L. Weekly Supp. 396a (Broward Cty. Ct. 2014). Indeed, for several years, most insurers erroneously believed they had adequate language in their policies to entitle them to pay at 200% of the Medicare rate,² and most providers blithely accepted these payments. This is clearly an improper methodology.

Dr. Dauer acknowledges that the Plaintiff has in fact “occasionally” been paid the full amount it has billed. He dismisses this fact by arguing that his analysis instead looked at the factors set forth in the Florida Statutes for determining reasonableness (Aff. ¶¶ 9, 37). However, Dr. Dauer overlooks the fact that the statute specifically provides that “payments accepted by the provider involved in the dispute” may be taken into consideration when determining whether a charge is reasonable. See Fla. Stat. §627.736(5)(a) (2013). Rather, Dr. Dauer notes in his affidavit that he is specifically considering the payments he accepts, rather than the payments the Plaintiff accepts (Aff. ¶9(b)). He has created his own methodology.

While Dr. Dauer does set forth his own charge for the lumbar MRI — which is clearly less than the Plaintiff’s charge — he offers no analysis other than his reliance on Medicare as to why the Plaintiff’s charge is not also reasonable. Under Florida law, both charges may be reasonable — and if they are, then the insurer must pay the provider’s charge, even if the insurer’s amount might also be deemed reasonable.

In sum, the Court concludes that Dr. Dauer’s testimony is not “based upon sufficient facts or data,” and is not the “product of reliable principles and methods,” as required by Florida Statutes §90.702 (2016), and the Court therefore finds that it is insufficient to demonstrate any disputed issue of material fact on the issue of the Plaintiff’s charges.

For the reasons stated above, Defendant has not come forward with any admissible evidence demonstrating that the Plaintiff’s charges were not “reasonable” in amount which would create a genuine issue of material fact. Rule 1.510(e), Fla. R. Civ. P. Accordingly, it is hereby

ORDERED AND ADJUDGED that the Plaintiff’s Motion for Final Summary Judgment on the issue of reasonableness of price is GRANTED. As this Order resolves the outstanding issue in the case, the Plaintiff is hereby directed to submit to chambers a proposed final judgment. Additionally, the pretrial conference scheduled for July 7, 2017 at 1:30 pm is hereby CANCELED.

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¹The Plaintiff has filed a timely Daubert challenge to Dr. Dauer’s proffered expert testimony. See Court’s Order Setting Pretrial Conference dated May 19, 2017; and Plaintiff’s Frye/Daubert Challenge to Admissibility and Expertise of Dr. Dauer, etc., filed April 19, 2017.

²In the Court’s view, the insurers determined efforts to claim that they have incorporated the Medicare fee schedules, which they have vigorously litigated in literally tens of thousands of cases in the State, demonstrates that the insurers must believe that they are better off in the great majority of cases paying the 200% of Medicare rate, rather than the “reasonable” charge. Notwithstanding these thousands of cases, Dr. Dauer’s analysis instead argues that insurers would be better off not seeking to avail themselves of the 200% of Medicare option and in turn asserting that the “reasonable” charge is less than that (Aff. ¶25).