26 Fla. L. Weekly Supp. 466b

Online Reference: FLWSUPP 2606LOUIInsurance — Personal injury protection — Coverage — Medical benefits — Statutory fee schedules — Both 2013 version of statute and unambiguous Form 9810A PIP policy allow insurer to use Medicare coding policies and payment methodologies of Federal Centers for Medicare and Medicaid Services — Insurer satisfied 2013 statutory notice requirement by having policy approved by Office of Insurance Regulation — Policy permitted insurer to limit reimbursements utilizing 2007 Medicare Part B physician’s fee schedule and Medicare’s Multiple Procedure Payment Reduction

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Appellant, v. PAN AM DIAGNOSTIC SERVICES INC., d/b/a WIDE OPEN MRI a/a/o Maxime Jean Louis, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 16-121 AP. L.T. Case No. 14-003283 SP 23 (3). September 5, 2018. An Appeal from the County Court for Miami-Dade County. Stein, Judge. Counsel: DeeAnn J. McLemore, Mark D. Tinker, and Charles W. Hall, Banker Lopez Gassler P.A., and Omar A. Giraldo, Cole, Scott & Kissane for Appellant. Yigal D. Kahana, the Law Offices of Yigal D. Kahana, and Robert J. Hauser, Pankauski Hauser PLLC for Appellee.[Lower court order published at 23 Fla. L. Weekly Supp. 855a.]

(Before DEL PINO, MIRANDA, and RODRIGUEZ-FONTS, JJ.)

(DEL PINO, Judge.) This is an appeal of first impression involving the interpretation of the Form 9810A PIP policy and the 2013 version of the Florida Motor Vehicle No-Fault Law. On August 24, 2013, Maxime Jean Louis was involved in an automobile accident. Maxime Jean Louis was insured under an automobile policy with personal injury protection (PIP) benefits by Appellant State Farm Mutual Automobile Insurance Co. (State Farm). On October 1, 2013, she sought treatment in the form of two MRI’s from Appellee Pan Am Diagnostic Services Inc. (Pan Am) and assigned her PIP benefits to it.

On March 3, 2014, a statement of claim was filed by Pan Am for breach of the policy. On April 30, 2014, an answer with affirmative defenses was filed that the medical services were not medically necessary and related, and that the medical charges were not reasonable. We find that the issues of medical necessity and relatedness of the medical services were conceded by State Farm. The trial court entered a final summary judgment in favor of Pan Am; from this State Farm appeals.¹

When the language of a statute is clear and unambiguous, a court may not resort to the rules of statutory construction. Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984). Rather, the statute must be given its plain and obvious meaning. Id. It is axiomatic that all parts of a statute must be read together in order to achieve a consistent whole. Forsythe v. Longboat Key Beach Erosion Control Dist., 604 So. 2d 452, 455 (Fla. 1992).

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 Servs., Inc., 141 So. 3d 147, 157 (Fla. 2013) [38 Fla. L. Weekly S517a]. On July 1, 2012, the current version of the statute took effect, substantially amending section 627.736(5)(a), Florida Statutes. Particularly, section 627.736(5)(a)3, Florida Statutes (2013)² includes plain language that explicitly permits an insurer to use Medicare coding polices and payment methodologies when determining the reasonableness of a medical charge under section 627.736(5)(a)1, Florida Statutes (2013).³ We find the county court erred, because under section 627.736(5)(a)3, State Farm was not prohibited from using Medicare coding policies and payment methodologies of the Federal Centers for Medicare and Medicaid Services (CMS) and applicable modifiers, including application of Medicare’s Multiple Procedure Payment Reduction (MPPR).

The 2012 amendments to section 627.736(5)(a)3, Florida Statutes allow an insurer to use Medicare coding policies and payment methodologies in determining the appropriate fee schedule reimbursement. 7 Fla. Prac. Motor Vehicle No-Fault Law (PIP) § 5:4 (2017-2018 ed.). Under the prior 2008 version of the PIP statute, Florida courts did not permit the use of Medicare payment methodologies and/or coding policies in calculating reimbursement amounts. Nationwide Mut. Fire Ins. Co. v. AFO Imaging, Inc., 71 So. 3d 134, 135 (Fla. 2d DCA 2011) [36 Fla. L. Weekly D1463b].

The MPPR deals with the “valuing” of services for payment and was not designed to limit patients’ access to medically reasonable and necessary imaging services. 77 Fed. Reg. 73,079 (Nov. 28, 2011). The MPPR is a payment process encapsulated within the calculation of the allowable amount under the Medicare fee schedule.⁴

We find that the MPPR is a coding policy/payment methodology of the CMS and not an improper utilization limit, therefore the statute permits the use of a payment methodology once the fee schedule is properly elected. As stated by the well-reasoned county court decision in Millennium Radiology, LLC a/a/o Angela Renteria v. State Farm Fire & Cas. Co., 23 Fla. L. Weekly Supp. 360a (Fla. Miami-Dade Cty. Ct. Aug. 11, 2015) the MPPR is a methodological modifier as adopted by the CMS under section 627.736(5)(a)3 when multiple services for diagnostic imaging are furnished by the same physician to the same patient in the same session on the same day. The variant is a reduction in the reimbursement for the second diagnostic procedure for what CMS deems an appropriate reimbursement. Id. It is noted that there was no evidence presented below to the county court that the application of the MPPR resulted in any limitation of the services provided to the insured.

In calculating the reimbursement in this PIP case, we find that State Farm could use the MPPR under section 627.736(5)(a)3, Florida Statutes (2013), since it is not an improper utilization limitation. If the Legislature intended to prohibit the use of the MPPR, it would have been done. Pan Am had countered, without any legal authority, that State Farm was not permitted to use the MPPR and claimed that it was an improper utilization limit, because, in Medicare, a payment limitation was the same as a utilization limitation.

Section 627.736(5)(a)2, Florida Statutes (2013) provides that the reimbursement amount may not be less than the “allowable amount under the applicable schedule of Medicare Part B for 2007.” Based on section 627.736(5)(a)2, Florida Statutes (2013)⁵ Pan Am argues (assuming the MPPR is permissible) that State Farm misapplied the MPPR when calculating reimbursement in violation of section 627.736(5)(a)2, Florida Statutes (2013), by applying the 2013 version of the MPPR to the 2007 Medicare physician’s fee schedule and not the 2007 version of the MPPR. Without any evidence below, the county court (in one line) determined that State Farm violated section 627.736(5)(a)2, Florida Statutes (2013). We find the county court erred because no merit exists for Pan Am’s argument under section 627.736(5)(a)2, Florida Statutes (2013) because the county court did not apply section 627.736(5)(a)3, Florida Statutes (2013).

We point out that sections 627.736(5)(a)2, and 3, Florida Statutes (2013) do not modify each other but instead each separately modify section 627.736(5)(a)1, Florida Statutes (2013). As stated in Health Diagnostics of Orlando, LLC a/a/o Vita Diaz v. State Farm Mutual Automobile Insurance Co., 25 Fla. L. Weekly Supp. 364b (Fla. Orange Cty. Ct. Apr. 28, 2017), pursuant to (5)(a)2, if the MPPR amount for the secondary procedure code is less than 200% of the 2007 participating level of Medicare Part B fee schedule, the MPPR secondary code is allowed at the higher 2007 participating level of Medicare Part B fee schedule amount. Id. “Unlike subparagraph (2), subparagraph (3) does not include any language requiring the “substitution” of 2007 Medicare coding policies or payment methodologies in the event those would result in higher amounts than the use of 2013 methodologies.” Id. Statutory construction requires that all subparagraphs must be given meaning, and if the Legislature had wanted the 2007 schedule of Medicare Part B to always be the floor for reimbursement, they could have added the same sentence from subparagraph 2 in all of the remaining subparagraphs (where it is absent). Id.

While section 627.736(5)(a)2, Florida Statutes (2013) establishes that the allowable amount in the 2007 Medicare Part B fee schedule must be used when it is higher than the applicable year’s Medicare Part B fee schedule’s allowable amount, section 627.736(5)(a)3, Florida Statutes (2013) permits that allowable amount to then be reduced by the applicable and permissible Medicare coding policies and CMS payment methodologies when determining the amount of reimbursement for the claim.

As noted, in 2012, the Legislature substantially amended section 627.736(5)(a)5, Florida Statutes⁶ setting forth the schedule of maximum charges limitation as a subsection of the reasonable charge calculation methodology. State Farm Mut. Auto. Ins. Co. v. MRI Assocs. of Tampa, Inc., 43 Fla. L. Weekly D1149 (Fla. 2d DCA May 18, 2018) (factually distinguishable involving a hybrid policy). As a result of this amendment, the Second District Court of Appeal stated that the reasonable charge and schedule of maximum charges methodologies are no longer co-equal subsections of section 627.736(5)(a). Rather, the reasonable charge method is set forth in subsection (5)(a) and the schedule of maximum charges limitation is provided in subsection (5)(a)1. Id. There are no longer two mutually exclusive methodologies for calculating the reimbursement payment owed by the insurer. Id. The 2013 PIP statute includes the fact-dependent calculation of reasonable charges as part of the definition of “[c]harges for treatment of injured persons” under subsection (5)(a). Id. An insurer may not disclaim the fact-dependent calculation of reasonable charges, however, it may elect to limit its payment in accordance with the schedule of maximum charges under subsection (5)(a)(1)(a)-(f). Id.

Pan Am argues and the county court determined below that the Form 9810A PIP policy was unclear and ambiguous⁷ because it did not specify that State Farm intended to utilize the MPPR method (because the MPPR is a distinct and separate component of Medicare from the Participating Physician’s Fee Schedule) and it clearly elects to pay other services at 200% of the Medicare Part B physician’s fee schedule. We disagree.

The construction of an insurance policy is a question of law. Thomas v. Fusilier, 966 So. 2d 1001, 1002 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D2457a]. In construing an insurance policy, the policy is read as a whole, endeavoring to give every provision its full meaning and operative effect. Auto-Owners Inc. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000) [25 Fla. L. Weekly S211a]. When the policy language is clear and unambiguous, it must be construed in accordance with the plain language of the policy as bargained for by the parties. Prudential Prop. & Cas. Ins. Co. v. Swindal, 622 So. 2d 467, 470 (Fla. 1993); Gen. Star Indem. Co. v. West Florida Village Inn, Inc., 874 So. 2d 26, 30 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D1070b]. The statute in effect at the time an insurance contract is executed governs substantial issues arising in connection with the contract. Lumbermens Mut. Cas. Co. v. Ceballos, 440 So. 2d 612, 613 (Fla. 3d DCA 1983).

Form 9810A PIP policy defines reasonable charge “as an amount determined by us to be reasonable in accordance with the No-Fault Act, considering one or more of the following . . . Medicare coding policies and payment methodologies. . . .” State Farm’s Form 9810A PIP policy properly tracks the method of reimbursement calculation outlined in section 627.736(5)(a), Florida Statutes and the limitation set forth in section 627.736(5)(a)1, Florida Statutes. State Farm Mut. Auto. Ins. Co. v. MRI Assocs. of Tampa, Inc., 43 Fla. L. Weekly D1149 (Fla. 2d DCA May 18, 2018) .⁸ Neither Virtual Imaging or Orthopedic Specialists v. Allstate Ins. Co., 117 So. 3d 19 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1918a] directly applied to policies created after the 2012 amendment to the PIP statute (State Farm’s policy in this case). Id.

We find the plain language of Form 9810A PIP policy permits State Farm to limit reimbursement based on the schedule of maximum charges as allowed in the fee schedule. Because Form 9810A PIP policy makes such an election of the fee schedule, the holding in Orthopedic Specialists is inapplicable and does not create an ambiguity in the policy. The policy goes into detail about the manner in which State Farm determines what qualifies as reasonable. In doing so, the unambiguous language of Form 9810A PIP policy states that State Farm will be using the fee schedule of maximum charges and CMS coding polices and payment methodologies including applicable modifiers [MPPR] to determine reimbursement. We find that State Farm’s Form 9810A PIP policy properly complies with the notice provision of section 627.736(5)(a)5, Florida Statutes (2013).

We agree with the analysis of the county court in Millennium Radiology, LLC a/a/o Angela Renteria v. State Farm Fire & Casualty Co., 23 Fla. L. Weekly Supp. 360a (Fla. Miami-Dade Cty. Ct. Aug. 11, 2015) (in opposite to the county court below) which held that State Farm’s Form 9810A PIP policy clearly and unambiguously elected the use of the Medicare coding policies and payment methodologies. Since there was only one reasonable interpretation of the policy at issue, the policy was not ambiguous as a matter of law and State Farm was permitted to limit payment utilizing the statutory fee schedule and payment methodology of MPPR. Id.

Pan Am raises an additional argument that section 627.736(5)(a)5, Florida Statutes did not delegate authority to the Office of Insurance Regulation (OIR) to interpret insurance policies. State Farm satisfied the 2013 statutory notice requirement of section 627.736(5)(a)5, Florida Statutes by having its Form 9810A PIP policy approved by the OIR. Thus, as a matter of law, State Farm’s Form 9810A PIP policy complied with section 627.736(5)(a)5, Florida Statutes.⁹

We may not diverge from the intent of the Legislature, since it is clear that both the 2013 version of the PIP statute and unambiguous Form 9810A PIP policy allow State Farm the use of Medicare coding polices and payment methodologies of the CMS, including applicable modifiers. Form 9810A PIP policy¹⁰ permitted State Farm to limit reimbursements utilizing the 2007 Medicare Part B physician’s fee schedule and Medicare’s MPPR that allows for reduced payments when multiple procedures are performed at the same time on the same patient by the same medical provider. We find State Farm properly reimbursed Pan Am in compliance with the participating physician fee schedule under Medicare Part B and was entitled to summary judgment as a matter of law.

Accordingly, we reverse the final summary judgment on this appeal. State Farm’s contingent motion for appellate attorney’s fees under Florida Rule of Appellate Procedure 9.400(b) and section 768.79(1), Florida Statutes (2013) is hereby granted. Pan Am’s motion for appellate attorney’s fees under Florida Rule of Appellate Procedure 9.400(b) and section 627.428, Florida Statutes (2013) is hereby denied.

REVERSED and REMANDED. (MIRANDA and RODRIGUEZ-FONTS, JJ. concur.)

__________________

¹The county court’s decision below is Pan Am Diagnostic Services, Inc. a/a/o Maxime Jean Louis v. State Farm Mutual Automobile Insurance Co., 23 Fla. L. Weekly Supp. 855a (Fla. Miami-Dade Cty. Ct. Jan. 15, 2016).

²This statute states, in relevant part:

3. Subparagraph [(5)(a)1]1 does not allow the insurer to apply any limitation on the number of treatments or other utilization limits that apply under Medicare or worker’s compensation. An insurer that applies the allowable payment limitations of subparagraph [(5)(a)]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 [(5)(a)]1, does not prohibit an insurer from using the Medicare coding polices and payment methodologies if the federal Centers for Medicare and Medicaid Services, and applicable modifiers to determine the appropriate amount of reimbursement for medical services, supplies, and care if the coding policy or payment methodology does not constitute a utilization limit.

(Emphasis added).

³The language of the statute provides a guideline for a determination of reasonable medical charges. This statute states in relevant part:

(5) 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.

(a) . . . 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).

⁴The MPPR is a payment methodology of CMS and of Medicare, and when a medical provider or independent diagnostic facility performs multiple services in one day to the same patient, Medicare has determined that there is a cost saving benefit of performing those multiple services. They break down a CPT code into a professional and a technical component. The MPPR does amount to less than 200% of the 2007 Medicare Part B fee schedule.

⁵This statute states in relevant part:

2. For purposes of subparagraph [(5)(a)]1., 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 was 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).

⁶In 2012, the new section 627.736(5)(a)5, Florida Statutes became effective which provides a notice requirement for an insurer who plans to limit payment based upon fee schedules and modifiers which stated:

5. 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. A policy form approved by the office satisfies this requirement. If a provider submits a charge for an amount less than the amount allowed under subparagraph [(5)(a)]1., the insurer may pay the amount of the charge submitted.

(Emphasis added).

⁷Any ambiguity in a policy is liberally construed in favor of an insured and strictly against the insurer as the drafter of the policy. Chandler v. Geico Indem. Co., 78 So. 2d 1293, 1300 (Fla. 2011) [36 Fla. L. Weekly S660a]. A policy is ambiguous where it is susceptible to two or more reasonable interpretations. Herring v. First S. Ins. Co., 522 So. 2d 1066, 1068 (Fla. 1st DCA 1988).

⁸It is undisputed by the parties that Form 9810A PIP Policy clearly elected and gives adequate notice of State Farm’s election of the 200% of Medicare Bart B Fee schedule reimbursement method for purposes of the above statute.

⁹The Florida Legislature has granted the OIR the authority to review and approve insurance policies. § 627.410(1), Fla. Stat. (2013); Land O’ Sun Mgmt. Corp. v. Commerce & Indus. Ins. Co., 961 So. 2d 1078, 1080 (Fla. 1st DCA 2007) [32 Fla. L. Weekly D1787a]. However, the approval by the OIR under section 627.736(5)(a)5 does not validate the policy. See Gonzalez v. Assocs. Life Ins. Co., 641 So. 2d 895 n.1 (Fla. 3d DCA 1994) (approval by the Department of Insurance (OIR’s predecessor agency) does not automatically validate the contents of an insurance policy); Bofshever Wellness Ctr., LLC a/a/o Hermana Polycarpe v. State Farm Mut. Auto. Ins. Co., 24 Fla. L. Weekly Supp. 969a (Fla. Broward Cty. Ct. Feb. 8, 2017); A-Plus Med. & Rehab. Ctr. a/a/o Cesar Acevedo v. State Farm Mut. Auto. Ins. Co., 24 Fla. L. Weekly Supp. 159b (Fla. Miami-Dade Cty. Ct. Jun. 8, 2016).

¹⁰Form 9810A PIP Policy states in pertinent part under No-Fault Coverage . . . Limits:

We will limit payment of Medical Expenses described in the Insuring Agreement of this policy’s No-Fault Coverage to 80% of a properly billed and documented reasonable charge, but 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 policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers. . . .

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).

(II) Medicare Part B, in the case of services, supplies, and care provided ambulatory surgical centers and clinical laboratories.

(III) The Durable Medical Equipment Prosthetics/Orthotics and supplies fee schedule of Medicare Part B, in the case of durable medical equipment.

For purposes of the above, the applicable fee schedule or payment limitation under Medicare is the fee schedule or payment limitation on 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.