26 Fla. L. Weekly Supp. 913a
Online Reference: FLWSUPP 2611SZABInsurance — Personal injury protection — Coverage — Medical expenses — Insurer properly based its payment for CPT 98940 on participating physician fee schedule of Medicare Part B, as mandated by policy and controlling statute
BERMAN CHIROPRACTIC a/a/o Szabo, Kristina, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. CONO-16-001800, Division 71. September 24, 2018. Louis Howard Schiff, Judge.
ORDER DENYING PLAINTIFF’S AMENDED MOTIONFOR FINAL SUMMARY JUDGMENT
THIS CAUSE having come before the Court on July 23, 2018 for a hearing on the Plaintiff’s Amended Motion for Final Summary Judgment, and the Court, having reviewed the Motion, the entire Court file, the relevant legal authorities, having heard the arguments of the parties’ respective counsels, reviewed the entirety of the record, and having been sufficiently advised in the premises, it is hereby ORDERED and ADJUDGED, as follows:
1.The Plaintiff’s Amended Motion for Final Summary Judgment is DENIED.FACTS
1. This claim for Florida No-Fault (“PIP”) benefits arises out of a May 29, 2014 motor vehicle accident involving the claimant, Kristina Szabo. The Insured’s policy of automobile insurance with State Farm provided $10,000 in PIP benefits subject to the terms and conditions of the insurance policy and Fla. Stat. 627.736.
2. At the time of the hearing, Plaintiff’s counsel (for the purposes of this case only) did not contest that the insured’s Policy with State Farm (form 9810A) provided proper notice to its insured of its intent to limit reimbursement pursuant to the “schedule of maximum Charges” as outlined in F.S. 627.736 (5)(a)1. . The policy states in pertinent part states “. . .in no event will we pay more than 80% of the following No-Fault Act ‘schedule of maximum charges’ including the use of Medicare coding policy and payment methodologies of the federal Centers for Medicare and Medicaid. . .”
3. The Plaintiff contends that State Farm paid less than the amount required under the subject policy and F.S. 627.736 (5)(a)1.f. as to CPT code 98940. For each instance of CPT code 98940, the Plaintiff billed $75.00, State Farm approved $57.62 and paid $46.10 (80% of $57.62). The Plaintiff contends that State Farm was contractually and statutorily obligated to pay $47.04 (80% of $58.80), a difference of $0.94.
LEGAL ANALYSIS
A. The PIP Statute and the Policy Language
In assessing payment for CPT Code 98940, State Farm consulted the PIP Statute, Fla. Stat. 627.736(5), which provides in pertinent. part (emphasis added):
(5) CHARGES FOR TREATMENT OF INJURED PERSONS.
(a) A physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge the insurer and injured party only a reasonable amount pursuant to this section for the services and supplies rendered [. . . .] However, such a charge may not exceed the amount the person or institution customarily charges for like services or supplies. In determining whether a charge for a particular service, treatment, or otherwise is reasonable, consideration may be given to evidence of usual and customary charges and payments accepted by the provider involved in the dispute, reimbursement levels in the community and various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages, and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply.
1. The insurer may limit reimbursement to 80 percent of the following schedule of maximum charges:
* * *
f. For all other medical services, supplies, and care, 200 percent of the allowable amount under:
(I) The participating physicians fee schedule of Medicare Part B, except as provided in sub-sub-subparagraphs (II) and (III).
Accordingly, State Farm based its payment on 80% of 200% of the allowable amount under the participating physicians fee schedule (“PPFS”) of Medicare Part B for CPT Code 98940. The Plaintiff contends that State Farm improperly applied a 2% reduction to CPT code 98940.
B. The Medicare Chiropractic Services Demonstration (2% Reduction)
During January 1, 2010 through July 1, 2014, Medicare implemented a 2% reduction in payment for certain chiropractic manipulative codes (CPT Codes 98940-98942) — which included CPT Code 98940. This reduction derived from Section 651 of Medicare Prescription Drug, Improvement and Modernization Act (“MMA”) of 2003. Pub. L. 108-173 (2003), which authorized a demonstration to evaluate the feasibility and advisability of expanding Medicare coverage for chiropractic services. For the period of the demonstration, the 2% reduction for CPT Code 98940 (and the other chiropractic codes) was incorporated into the applicable PPFS National Payment Amount File for Medicare Part B:
To implement the required BN1 adjustment . . . we are reducing the payment amount under the PFS for the chiropractic CPT Codes (that is, CPT codes 98940, 98941, and 98942). As explained previously, we are finalizing our plans to recoup $10 million each year through adjustments to chiropractic CPT codes for calendar years 2010 through 2014. In order to achieve the $10 million recoupment during such years, payment under the PFS for these codes will be reduced by approximately 2 percent. As stated in prior PFS rules, application of the BN adjustment would be specific to these three codes which represent the “chiropractic fee schedule” because they are, the only chiropractic codes recognized under the PFS. This methodology also appropriately impacts the chiropractic profession that is directly affected by the demonstration.
74 Fed. Reg. 226 at 61927 (Nov. 25, 2009) (emphasis added).
The Plaintiff contends that State Farm is a “private payor” and this was required to calculate payment for CPT 98940 by using a formula (aka “the formula”) found in the National Physician Fee Schedule Relative Value File Calendar Year 2014, of which this Court took Judicial Notice, which states:
2014 Non Facility pricing amount = [(work RVU * Work GPCI) + (Non-Facility PE RVU * PE GPCI) + (MP RVU * MP GPCI)] * conversion factor (CPF)
2014 Facility pricing amount = [(work RVU * Work GPCI) + (Facility PE RVU* PE GPCI) + (MP RVU * MP (GPCI)] * conversion factor (CPF)
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
Pursuant to the 2014 National Physician Fee Schedule Relative Value file (January Release), CPT codes 98940-98942 have a “calculation flag” of 3. The Plaintiff maintains that the application of the formula to CPT 98940 results in a figure of $58.80. But the Plaintiff overlooks the .98 adjustment applicable to 98940 as it has a calculation flag value of “3”. With the .98 adjustment ($58.80 x .98), the resulting amount is $57.62. State Farm based its payment on this $57.62 figure.
RULING
“If the statutory wording is unambiguous, then judicial inquiry is complete.” Klonis v. State, 766 So. 2d 1186, 1189 (Fla. 1st DCA 2000) [25 Fla. L. Weekly D2230a]. “Courts are not to add, subtract, or distort the words the Legislature has written.” Anderson Columbia v. Brewer, 994 So.2d. 419, 420 (Fla. 1st DCA 2008) [33 Fla. L. Weekly D2473a]. Plaintiff’s theory is inconsistent with these principles, as it asks the Court to abandon the clear language of the Statute (and the intent of the Legislature) by adopting a reimbursement methodology not contemplated by the plain language of the Statute, the policy, and/or by the intent of the Legislature.
The applicable language of the section (5)(a)1.f. of the PIP Statute unambiguously provides that payment is limited to “200 percent of the allowable amount under . . . the participating physicians fee schedule of Medicare Part B.” The policy and Statute are clear that the insurer is to use 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 the year, notwithstanding any subsequent change made to the fee schedule or payment limitation. . .” Fla. Stat. 627.736 (5)(a)2 (emphasis added). Fla. Stat. 627.736 95)(a)1.f.
This language clearly requires State Farm to pay per the PPFS of Medicare in effect on March 1 “of the service year. . .” and not according to the formula identified by the Plaintiff. Plaintiff’s “private payer” argument is inapplicable because the PIP Statute itself requires State Farm to pay pursuant to the PPFS of Medicare Part B; and not as a “private payor.” Neither the PIP Statute or State Farm’s policy make any reference to the term “private payor” nor does either reference the “formula” argued by the Plaintiff.
Per Pub 100-04 Medicare Claims Processing (June 6, 2014), the July 2014 update to the Medicare Physician Fee Schedule “eliminates the 2% reduction for CPT 98940, 98941 and 98942 which was utilized for the first half of 2014, effective July 1, 2014.” As the 2% reduction was not removed from the schedule until July 1, 2014, it represents a “subsequent change” and thus State Farm properly based their payment on the PPFS of Medicare Part B in effect as of March 1, 2014 as required by the Statute and Policy at issue.
The Court relies upon evidence presented by the Defendant including “the physician fee schedule — January release” from CMS that was in effect January 1, 2014 through March 31, 2014. The Medicare physician fee schedule (January release) clearly shows that for 2014 as related to CPT 98940 for area “04” (which represents Miami where the treatment was conducted) there is a non-facility amount of $28.81, which at 200% equals $57.62, the exact amount that State Farm approved.
Based on the above, the Court finds that State Farm properly based its payment for CPT 98940 on the “participating physician fee schedule of Medicare Part B” as of March 1, 2014 as mandated by the State Farm policy (form 9810A) and the Fla. Stat. 627.736 (5)(a)1.f.
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1The demonstration was required to achieve budget neutrality (BN). 74 Fed. Reg. 226 at 61927 (Nov. 25, 2009).
