26 Fla. L. Weekly Supp. 908a
Online Reference: FLWSUPP 2611CHERInsurance — 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 use fee schedule amounts that reflect 2% reduction when reimbursing for chiropractic services under PIP policy that adopts statutory fee schedules, and is not required to calculate reimbursement using formula that would add 2% back into fee schedule payment amounts
DR. ROBERT SCHWARTZ, P.A. a/a/o Claudia Hernandez, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE17-007464 (49). September 12, 2018. Nina W. Di Pietro, Judge.
ORDER DENYING PLAINTIFF’S MOTIONFOR SUMMARY JUDGMENT
THIS CAUSE having come before the Court on July 23, 2018 for a hearing on Plaintiff’s Motion for Summary Judgment (hereinafter “Plaintiff’s Motion”), the Court having reviewed Plaintiff’s 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:
For purposes of this summary judgment proceeding, the following material facts are undisputed. The patient in this case, Claudia Hernandez, sustained injuries in an automobile accident on May 15, 2014. At that time, Ms. Hernandez was covered under a policy of insurance issued by Defendant, State Farm Mutual Automobile Insurance Company (hereinafter “Defendant”). Dr. Robert Schwartz, P.A. (hereinafter “Plaintiff”), as an assignee of Ms. Hernandez submitted bills to Defendant for medical services rendered to Ms. Hernandez on dates of service between May 19, 2014 and August 22, 2014. The payments issued by Defendant in this matter were all limited by the schedule of maximum charges set forth in section 627.736(5)(a)1., Florida Statutes (2014). Defendant’s specific reimbursement for CPT code 98940 was $56.98.
Prior to the hearing on Plaintiff’s Motion, Defendant filed several requests for the Court to take judicial notice. On January 17, 2018, the Court signed two Agreed Orders regarding Defendant’s requests. The First order granted judicial notice of the Federal Register and the United States Code. The second order granted judicial notice of the following: 1. The 2014 Medicare Physician Fee Schedule National Payment Amount File for CPT 98940 for locale “3” (Broward/Fort Lauderdale) for “09102” (Florida); 2. The “National Physician Fee Schedule Relative Value File Calendar Year 2014”; 3. The “2014 National Physician Fee Schedule Relative Value File January Release”; and 4. That $58.14 multiplied by 0.98 equals $56.98.
The issue before the Court is whether section 627.736(5)(a)1., Florida Statutes, permitted Defendant to apply a specific reduction to the payments issued in this matter for CPT code 98940. Plaintiff contends that Defendant improperly limited reimbursement of this code because Defendant’s payments of $56.98 for each 98940 code billed included a 2% reduction that the Centers for Medicare and Medicaid Services (hereinafter “CMS”) applied to payments for chiropractic manipulations from 2010 through a portion of 2014. This 2% reduction is described in the Federal Register, calculated into in the amount of reimbursement listed in the 2014 Medicare Physician Fee Schedule National Payment Amount File for CPT 98940 for locale “3” (Broward/Fort Lauderdale) for “09102” (Florida), noted as an adjustment in the National Physician Fee Schedule Relative Value File Calendar Year 2014, and listed as a calculation flag in the 2014 National Physician Fee Schedule Relative Value File January Release.
Section 627.736(5)(a)1., in pertinent part, states as follows:
(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, and the insurer providing such coverage may pay for such charges directly to such person or institution lawfully rendering such treatment if the insured receiving such treatment or his or her guardian has countersigned the properly completed invoice, bill, or claim form approved by the office upon which such charges are to be paid for as having actually been rendered, to the best knowledge of the insured or his or her guardian. 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:
(l) The participating physicians fee schedule of Medicare Part B. . .
Fla. Stat. § 627.736(5)(a)1. (2014).
Initially, the Court agrees with Plaintiff that the term “physicians fee schedule” in section 627.736(5)(a)1.f.1. refers to a formula published in the United States Code. 42 U.S. Code § 1395w-4, entitled Payment for Physicians’ Services, states in pertinent part:
(b) Establishment of fee schedules
(1) In general. . . the Secretary shall establish, by regulation, fee schedules that establish payment amounts for all physicians’ services furnished in all fee schedule areas… for the year…. [E]ach such payment amount for a service shall be equal to the product of —
(A) the relative value for the service…
(B) the conversion factor…. and
(C) the geographical adjustment factor… for the service for the fee schedule area.
42 U.S. Code § 1395w-4(b)(1). However, unlike Plaintiff’s assertions, section 627.736(5)(a)1. does not state that the amount of reimbursement for a medical service is the product of the physicians fee schedule equation for that service. Instead, the statute states that an insurer may limit reimbursement to 80% of 200% of “the allowable amount under the participating physicians fee schedule of Medicare Part B.” Fla. Stat. § 627.736(5)(a)1. (emphasis added). Therefore, while plugging numbers into the above formula for “the physician fee schedule” is the first step that must be taken when determining the allowable amount under the participating physicians fee schedule of Medicare Part B, it is not necessarily the only step. An insurer may also take into account any other applicable adjustments CMS has established for payment of the service at issue, unless that adjustment is specifically exempted by the statute. See Fla. Stat. §627.736(5)(a)3. In other words, an insurer is permitted to reimburse medical providers seeking PIP benefits, 80% of 200% of the amount that Medicare would pay a physician under like circumstances for CPT code 989401. Id.
Further, despite the plain language of the statute, Plaintiff argues that Defendant was not entitled to incorporate CMS’ 2% reduction into its payment. Plaintiff relies on a discussion in the Federal Register which states as follows:
CMS plans to recoup the remaining funds…and will reduce chiropractic CPT codes (CPT codes 98940, 98941, and 98942) by the appropriate percentage. We will reflect this reduction only in the payment files used by the Medicare contractors to process Medicare claims rather than through adjusting the RVUs2. Avoiding an adjustment to the RVUs preserves the integrity of the PFS, particularly since many private payers also base payment on the RVUs.
78 Fed. Reg. 74790-74791. Plaintiff argues that Defendant, as a private payer, was not permitted to rely on payment files used by Medicare contractors to process Medicare claims. Instead, Plaintiff insists that section 627.736(5)(a)1. requires Defendant to calculate reimbursement solely through the physicians fee schedule equation. The Court finds Plaintiff’s arguments to be inconsistent with the plain language of the statute, as was discussed more fully above.
Finally, as the Honorable Judge Martha C. Adams succinctly stated in Ocoee Chiropractic and Injury Clinic a/a/o Kimberly Williams v. Progressive Select Insurance Company:
Plaintiff contends that Defendant, as a private payer, should have calculated the formula without a 2% reduction because the 2% reduction was not reflected in the RVU amounts published by CMS. Plaintiff’s argument fails because Defendant is not a private payer basing payment on the RVUs. Rather, Defendant is basing payment on the amount the legislature has permitted for reimbursement of PIP claims, which is the amount that is allowed for participating providers under Medicare Part B. Further, there is no indication that the legislature intended to require an insurer to calculate formulas or reimburse amounts higher than those allowed for a participating provider under Medicare Part B.
Order Granting Defendant’s Amended Motion for Partial Summary Judgment and Denying Plaintiff’s Motion for Summary Judgment. No. 2016-SC-002801-O (Fla. Orange County Ct. January 7, 2018). The Court agrees with Judge Adam’s analysis of Plaintiff’s arguments. Therefore, since a similarly situated participating physician’s payment from Medicare would have included the 2% additional reduction, Defendant was also allowed to include this reduction when calculating reimbursement to Plaintiff pursuant to section 627.736(5)(a)1.
ORDERED AND ADJUDGED that Plaintiff’s Motion for Summary Judgment is hereby Denied.
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1The only enumerated statutory exception is that an insurer may not apply any limitation on the number of treatments or other utilization limits that apply under Medicare. That exception is not applicable here.
2RVU is short for Relative Value Unit
