27 Fla. L. Weekly Supp. 731a
Online Reference: FLWSUPP 2708BEAUInsurance — Personal injury protection — Coverage — Chiropractic services — Medicare fee schedule — Private insurers are not entitled to the 2% reduction in payment for chiropractic treatment implemented by Medicare — The 2% reduction is specifically reserved only for claims that Medicare is required to reimburse
TOP CARE CHIROPRACTIC & REHABILITATION CENTER, INC., a/s/o Ernest Beauplan, Plaintiff, v. GEICO GENERAL INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2018-CC-011671-O. September 16, 2019. Elizabeth J. Starr, Judge. Counsel: Dave T. Sooklal, Anthony-Smith Law, P.A., Orlando, for Plaintiff. Roger Johnson, Law Office of Kelly L. Wilson, Orlando, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FORFINAL SUMMARY JUDGMENT AS TODEFENDANT’S IMPROPER REIMBURSEMENT FORCPT CODES 98940 AND ENTRY OF FINAL JUDGMENT
This matter came before the Court on Plaintiff, TOP CARE CHIROPRACTIC & REHABILITATION CENTER, INC’s, Motion for Final Summary Judgment Regarding Defendant’s Improper Reimbursement of CPT Code 98940. After having reviewed the Plaintiff’s Motion and relevant summary judgment evidence, and after having reviewed the applicable legal authority and argument of counsel, this Court hereby GRANTS Plaintiff’s Motion for the reasons set forth below. Based on this Court’s Order and rationale below, the Court further hereby enters a Final Judgment in favor of the Plaintiff.
Factual Background
The sole issue in this case involves Plaintiff’s claim for payment of additional Personal Injury Protection (“PIP”) benefits for CPT Code 98940 for dates of service August 5, 2014, through December 5, 2014, wherein Plaintiff alleges that $56.08 is the allowable amount under Medicare for CPT code 98940. Defendant claims that $54.96 is the allowable amount under Medicare for CPT code 98940. There is no dispute in this case that the treatment rendered by the Plaintiff was causally related and medically necessary. Plaintiff is not seeking any benefits above 200% of the Medicare Part B fee schedule. Thus, the sole issue to be determined by this Court is the allowable amount under Medicare for CPT code 98940.ARGUMENT BY THE PARTIES
The parties disagree as to the correct Medicare Part B Fee Schedule allowable amount for CPT code 98940. Plaintiff contends that “fee schedule formula” issued by the Center for Medicare and Medicaid Services (“CMS”) sets the allowable amount for reimbursement for CPT code 98940. Defendant contends that it is entitled to a 2% reduction that the CMS expressly stated is a carved out reduction only for claims that are to be paid by Medicare.
Plaintiff contends that the correct allowable amount under the fee schedule formula issued by the CMS is $56.08. Defendant contends that $54.96 was the proper allowable amount, which was calculated by taking the 2% reduction from $56.08.
ANALYSIS
When properly invoked, the PIP statute allows an insurer like the Defendant to limit reimbursement of PIP claims according to a schedule of maximum benefits. That schedule is based on the type of provider and/or the type of services provided. As it relates to the Plaintiff, the appropriate fee schedule is 200% of Medicare Part B. Medicare reimbursements are determined via a mathematical calculation involving relative value units (“RVUs”), conversion factors and geographic adjustments. According to §42 U.S.C. 1395w-4(b)(1):
(B) ESTABLISHMENT OF FEE SCHEDULES
(1) IN GENERAL
Before November 1 of the preceding year, for each year beginning with 1998, subject to subsection (p), the Secretary shall establish, by regulation, fee schedules that establish payment amounts for all physicians’ services furnished in all fee schedule areas (as defined in subsection (j)(2)) for the year. Except as provided in paragraph (2), each such payment amount for a service shall be equal to the product of —
(A) the relative value for the service (as determined in subsection (c)(2)),
(B) the conversion factor (established under subsection (d)) for the year, and
(C) the geographic adjustment factor (established under subsection (e)(2)) for the service for the fee schedule area.
Based on the foregoing, the reimbursement value for any covered Medicare service in the United States can easily be calculated by multiplying the relative value for the service, the conversion factor for the year that the service was performed and the geographic adjustment factor applicable to the locality in which the service is provided.
Plaintiff’s motion illustrates, and it is undisputed, that using the above referenced RVU formula results in a Medicare fee schedule amount of $28.04 for CPT code 98940:
Medicare Non-Facility Pricing =
[(Work RVU x Work GPCI) + (Non-Facility PE RVU x PE GPCI) + (MP RVU x MP GPCI)] x Conversion Factor
[(0.46 x 1) + (0.32 x 0.964) + (0.01 x 1.434)] x $35.8228 =
[(0.46 + 0.30848 + 0.01434)] x $35.8228 =
(.78282) x $35.8228 = $28.04.
200 percent of this amount equals $56.08.
In contrast, the Medicare payment files only reflect a reimbursement value of $27.48 for CPT code 98940, 200 percent of which equals $54.96 for CPT code 98940. Defendant maintains this is the maximum allowable amount. Plaintiff contends that the “payment” files do not reflect the allowable amount because the reimbursable amounts in the “payment files” were intentionally reduced by CMS by 2 percent with clear notice that the 2% reduction was specific to claims that Medicare would pay, and was for the specific purpose of reimbursing Medicare for the cost of a study relative to what services Medicare would cover.
This issue has been addressed in detail by numerous Federal Courts, which provide a detailed analysis of the history concerning the appropriate Medicare reimbursement for Chiropractic services. See, e.g., Plantation Spinal Care Center, Inc. a/a/o Joseph Laban v. Direct General Insurance Company, 2018 WL 3109631 (S.D. Fla. Apr. 2018). This Court finds that these Federal Court decisions are instructive. The Department of Health and Human Services commissioned a study to determine the feasibility of extending Medicare coverage to include Chiropractic treatment. The actual cost of performing the feasibility study exceeded the budgeted amount by 50 million dollars, which violated the requirement that Medicare remains “budget neutral.” To recoup this unanticipated expense, CMS, implemented a plan to reduce payment for Medicare Claims for specific Chiropractic treatment by 2 percent until it recouped the 50 million dollars.
Notice of this plan was published in the Federal Register on November 25, 2009. See 74 Federal Register No. 26, pp. 61926-61928. In this notice, Medicare advised that to preserve the integrity of its fee schedules, the reductions would only appear in the payment files used by Medicare contractors, and that private payers should utilize the relative values published by Medicare to arrive at the correct payment. It its notice, the Department of Health and Human Services made clear that the 2 percent reduction was only to be applied to claims that were submitted to Medicare.
Consistent with the proposed rule, for this final rule with comment period, we are reflecting this reduction only in the payment files used by the Medicare contractors to process Medicare claims rather than through adjusting the RVUs. Avoiding an adjustment to the RVUs would preserve the integrity of the PFS, particularly since many private payers also base payment on the RVUs.
74 Federal Register No. 26, pp. 61926-61928 (emph. added.)
Where language is clear and unambiguous, judicial interpretation of statutes, regulations and insurance contracts requires that Courts construe said language according to its plain meaning. Allstate Ins. Co. v. Holy Cross Hospital, 961 So.3d 328 (Fla. 2007) [32 Fla. L. Weekly S453a]. The plain language of §627.736 (5)(a) 2.f. Florida Statutes (2008) states that:
2. 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 the participating physicians schedule of Medicare Part B.
The plain language of the aforementioned statute contains no language that would entitle a private payor, such as Defendant, to the 2 percent reduction that was specifically reserved for Medicare to recoup its cost overruns by claims that only Medicare is required to reimburse. Instead, the plain language of the statute mandates that the allowable amount be determined pursuant to the participating physicians schedule of Medicare Part B, which is calculated through the above mentioned fee schedule formula — that did not change during the time period that Medicare implemented the 2 percent reductions. Simply put, $56.08 is the appropriate allowed amount for CPT 98940 as calculated pursuant to the RVU formula of Medicare Part B.CONCLUSION
Based on the foregoing analysis, this Court concludes that the appropriate allowable amount for CPT code 98940 is $56.08. Plaintiff is therefore entitled to an additional $.03 in underpaid benefits for CPT code 98940 for 18 separate dates of service ($0.03 x 18 codes), plus applicable prejudgment interest in the amount of $0.17 for a total due and owing to Plaintiff of $0.71.
