25 Fla. L. Weekly Supp. 837b
Online Reference: FLWSUPP 2509ROBIInsurance — Personal injury protection — Coverage — Medical expenses — Statutory fee schedules — Because 2% reduction applied by Centers for Medicaid and Medicare Services to physician fee schedule payment amounts for CPT codes for chiropractic manipulation is explicit part of formula for calculating fee schedule payment amounts for those CPT codes, PIP insurer is entitled to apply 2% reduction in reimbursing for chiropractic services under PIP policy adopting statutory fee schedules — July 1, 2014, removal of 2% reduction represents subsequent unforeseeable change in fee schedule and is not applicable to charges at issue
WASSERMAN CHIROPRACTIC, INC., a/a/o Gerald Robins, Plaintiff, v. AUTO CLUB SOUTH INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. CONO 15-008352 (70). November 6, 2017. John D. Fry, Judge. Counsel: W. Michael Skirvin, Ged Lawyers, LLP, Boca Raton, and Mac S. Phillips, Phillips | Tadros, Fort Lauderdale, for Plaintiff. Melissa G. McDavitt, Conroy Simberg, West Palm Beach, for Defendant.
FINAL JUDGMENT AND ORDER GRANTINGDEFENDANT’S MOTION FOR FINAL SUMMARYJUDGMENT AND DENYING PLAINTIFF’S MOTION FORPARTIAL SUMMARY JUDGMENT
THIS CAUSE having come on to be heard on September 26, 2017 on Defendant’s Motion for Final Summary Judgment and Plaintiff’s Motion for Partial Summary Judgment, the Court having reviewed the motions, heard extensive argument of counsel, and after being otherwise fully advised in the premises, it is hereby
ORDERED and ADJUDGED, as follows:
1. Defendant’s Motion for Final Summary Judgment is GRANTED.
2. Plaintiff’s Motion for Partial Summary Judgment is DENIED.
INTRODUCTION
1. The subject action involves a claim for personal injury protection insurance benefits filed by the Plaintiff, Wasserman Chiropractic, Inc. (hereinafter “Plaintiff”) as assignee of Gerald Robins against the Defendant, Auto Club South Insurance Company (hereinafter “Auto Club” or “Defendant”), arising out of a motor-vehicle accident occurring on September 7, 2014.
2. Defendant has filed two separate Motions for Summary Judgment. However, the Court need not address Defendant’s motion as to Defective Demand Letter and De Minimus due to the Court’s ruling on Defendant’s Motion for Final Summary Judgment filed June 8, 2016.
3. The issue at the crux of the parties’ competing Motions for Summary Judgment is whether Defendant properly reimbursed CPT code 98940 for 2014 dates of service.
FACTS
4. Auto Club issued a policy of insurance to Gerald Robins (policy number FHP0034370) which provided $10,000 in PIP benefits subject to the terms and conditions of the insurance policy and Florida law. The subject policy did not provide medical payments coverage.
5. At the time of the hearing, Plaintiff’s counsel conceded that Defendant’s policy of insurance provided proper notice to its insured of its intent to limit reimbursement pursuant to the “Schedule of Maximum Charges”. The subject policy states in pertinent part that the payments Auto Club makes will not exceed “200 percent of the allowable amount under . . . [t]he participating physicians fee schedule of Medicare Part B” (emphasis added).
6. Plaintiff argues that Auto Club paid less than the amount required under the subject policy of insurance for chiropractic manipulation (CPT code 98940).
7. For dates of service from November 14, 2014 through and including December 26, 2014, Plaintiff charged $65.00 for CPT code 98940. Auto Club allowed $56.98 for CPT code 98940 and paid $45.58 (80% of $56.98). Plaintiff contends that Auto Club was contractually and statutorily obligated to pay $46.52 (80% of $58.14) for 2014 dates of service.
LEGAL ANALYSIS
Florida has adopted a “no-fault” statutory system for automobile insurance. The relevant statute has been subject to several versions and amendments. See Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a].
In 2012, the Florida Legislature amended the PIP statute to include express directives as to how a carrier can adopt the Schedule of Maximum Charges. The parties agree that this case is governed by Florida Statute § 627.736(5)(a)5., which provides in pertinent part:
“Effective July 1, 2012, an insurer may limit payment as authorized by this paragraph only if the insurance policy includes a notice at the time of issuance or renewal that the insurer may limit payment pursuant to the schedule of charges specified in this paragraph. . .”
Florida Statute § 627.736(5)(a)1.f. requires an insurer limiting payment to the Schedule of Maximum Charges to utilize “the participating physicians fee schedule of Medicare Part B.”
Pursuant to Florida Statute § 627.736(5)(a)2.,
. . .the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect on March 1 of the service year in which the services, supplies, or care is rendered and for the area in which such services, supplies, or care is rendered, and the applicable fee schedule or payment limitation applies throughout the remainder of that year, notwithstanding any subsequent change made to the fee schedule or payment limitation, except that it may not be less than the allowable amount under the applicable schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B.
(Emphasis added).
The applicable policy of insurance for Auto Club states as follows:
For purposes of the above, the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation in effect on March 1 of the year in which the services, supplies, or care is rendered and for the area in which such services, supplies, or care is rendered, and the applicable fee schedule or payment limitation applies throughout the remainder of that year, notwithstanding any subsequent change made to the fee schedule or payment limitation, except that it will not be less than the allowable amount under the applicable schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B.
As such, for the disputed dates of service, the applicable fee schedule would be the Schedule of Maximum Charges in place on March 1, 2014, notwithstanding any subsequent changes.
In this case, the services rendered by the Plaintiff fall under the “all other medical services” category of Florida Statute § 627.736(5)(a)1.f (I). As a private, non-emergency provider whose services are furnished in a private office (non-hospital), Plaintiff is considered a participating non-facility for purposes of selecting the appropriate fee schedule. Since Defendant properly elected the Schedule of Maximum Charges, Defendant was required to pay “80 percent of . . .200 percent of the allowable amount under . . . [t]he participating physician fee schedule of Medicare Part B” under Florida Statute Section 627.736(5)(a)1.f(I).
Both Plaintiff and Defendant agree that the Defendant has to pay 80% of the allowable amount under the participating physician fee schedule. Where the parties disagree is the determination of the allowable amount for CPT code 98940 for 2014 dates of service. More specifically, the issue presented is whether the 2% reduction applied by the Centers for Medicaid and Medicare Services (CMS) to chiropractic manipulations from 2010 to July 1, 2014 may be applied by insurers in the context of PIP reimbursement.
WITH RESPECT TO CHIROPRACTIC MANIPULATIONCODES, IS THE 2% REDUCTION APPLIED BY CMS TOMEDICARE INCLUDED AS A PART OF THE ALLOWABLEAMOUNT UNDER THE PARTICIPATING PHYSICIANSCHEDULE FOR MEDICARE PART B FOR PURPOSES OFTHE FLORIDA PIP STATUTE FOR THE2014 SERVICE YEAR?
As an initial matter, the Court addresses the origin of the 2 percent reduction applied by the Centers for Medicaid and Medicare Services (CMS) to chiropractic manipulations from 2010 to July 1, 2014 (“The 2 percent issue”). Pursuant to the requirements set forth in Section 651 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173), CMS conducted a two-year demonstration to evaluate the feasibility and advisability of expanding coverage for chiropractic services under Medicare. Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2010, 74 FR 61738-01 (November 26, 2009). “The demonstration expanded current Medicare coverage to include ‘care for neuromusculoskeletal conditions typical among eligible beneficiaries and diagnostic and other services that a chiropractor is legally authorized to perform by the State or jurisdiction in which such treatment is provided’ ”. Id. The demonstration, which ended on March 31, 2007, was required to be budget neutral. Id. The demonstration was not budget neutral. Id. The total effect of the demonstration in the “Chiropractic User Analysis” to Medicare was $50 million. Id.
Because the “Chiropractic User Analysis” focused on users of chiropractic services, Medicare adjusted the Medicare PFS [Physicians Fee Schedule] for all chiropractic services using the estimate provided in the “Chiropractic User Analysis”. Id. To recoup this $50 million expenditure, CMS implemented an approximately 2 percent reduction of the fee schedule for CPT codes 98940, 98941, and 98942 from 2010 through 2014. Id. CMS notes that “we are refining the language in this final rule to include that the chiropractic fee codes will be reduced by approximately 2 percent for CYs 2010 through 2014.” Id.
CMS additionally notes that the 2 percent reduction is only reflected in the payment files used rather than through adjusting the Relevant Value Units (RVUs). Id. Avoiding an adjustment to the RVUs served to preserve the integrity of the PFS [Physicians Fee Schedule], particularly since many private payers also base payment on the RVUs. Id.
This same language appears in each subsequent Federal Register for each calendar year through 2014 as Final Regulations and Final Rules. See also Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule & Other Revisions to Part B for CY 2014, 78 FR 74230-01 (December 10, 2013). Plaintiff contends that because the 2 percent reduction was not made through an adjustment to the RVUs, the 2 percent reduction is not to be included in the allowable amount. This Court disagrees.
Interestingly, in support of their respective positions, both Plaintiff and Defendant rely on “The National Physician Fee Schedule Relative Value File Calendar Year 2014”. As requested by the parties, the Court takes Judicial Notice of “The National Physician Fee Schedule Relative Value File Calendar Year 2014,” an official document prepared by the Centers for Medicaid and Medicare Services (CMS), the federal agency which is the branch of the U.S. Department of Health & Human Services which administers Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) in partnership with state governments.
The National Physician Fee Schedule Relative Value File Calendar Year 2014 states the following:
“The formula for 2014 physician fee schedule payment amount is as follows:
2014 Non-Facility Pricing Amount =
[(Work RVU * Work GPCI) +
(Non-Facility PE RVU * PE GPCI) +
(MP RVU * MP GPCI)] * Conversion Factor (CF)
2014 Facility Pricing Amount =
[(Work RVU * Work GPCI) +
(Facility PE RVU * PE GPCI) +
(MP RVU * MP GPCI)] * Conversion Factor
Note: If the Calculation Flag has a value of “3”, then an adjustment of .98 should be applied to the fee schedule amount for the following codes: 98940, 98941, and 98942.”
CMS instructs that an adjustment of .98 should be applied to the fee schedule for chiropractic manipulation codes. The 2 percent reduction is not a separate fee schedule, or a Medicare coding guideline or principle. The 2 percent reduction is an explicit part of the formula set by CMS to determine the “fee schedule payment amount”. The Defendant is entitled to rely on the formula provided by CMS and the published pricing amount when it sets its prices. The Defendant could not have predicted that CMS would make a subsequent change to the fee schedule on July 1, 2014, nor were they required to.
Plaintiff takes the position that the allowable amount is derived solely from the formula published in the Federal Register (Medicare Non-Facility Pricing = [(Work RVU x Work GPCI) + (Non-Facility PE RVU x PE GPCI) + (MP RVU x MP GPCI)] x Conversion Factor). The Plaintiff further asserts that the Defendant may not rely upon the amount that is actually paid by Medicare under the Physician Fee Schedule or the amounts as published at http://www.cms.gov/. However, effective January 1, 2012, the Department of Health and Human Services, through CMS, stopped publishing the fee schedules in the Federal Register and began providing the information through the Internet on the CMS Website at http://www.cms.gov/. See Medicare Program; Payment Policies Under the Physician Fee Schedule, Five-Year Review of Work Relative Value Units, Clinical Laboratory Fee Schedule: Signature on Requisition, and Other Revisions to Part B for CY 2012, 76 FR 73026-01 (November 28, 2011).
This Court concludes that the 2 percent reduction, which was applicable on March 1, 2014, is part of the allowable amount under the Defendant’s policy and the PIP statute. Further, the July 1, 2014 removal of the 2 percent reduction represents a subsequent change to the fee schedule and, therefore, is not applicable to the charges at issue.
For these reasons, it is ORDERED AND ADJUDGED that Defendant’s Motion for Final Summary Judgment is hereby GRANTED and Plaintiff’s Motion for Partial Summary Judgment is hereby DENIED
Final Judgment is hereby entered in favor of Defendant, AUTO CLUB SOUTH INSURANCE COMPANY, and the Plaintiff shall take nothing by this action.
The Court retains jurisdiction to consider and rule on any motions for attorney’s fees and costs.
