South Florida Hospital News
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June 2011 - Volume 7 - Issue 12


Are Medical Providers Leaving PIP Money On The Table?

Court Decision Opens Opportunity to Recover Payments

In the face of declining reimbursements and rising costs, Personal Injury Protection (PIP) payments offer a predictable revenue source. Florida’s No Fault Insurance law provides reimbursement at a higher level than Medicare or third-party insurance’s contracted rates - and a Florida appellate court decision in May makes PIP revenue recovery an even more compelling opportunity.

Yet many hospitals and other medical providers don’t take advantage of their rights to recover payment for treating automobile accident victims. They too often accept and write off an insurer’s underpayment or denial of benefits, even though by law, the insurer is responsible for all attorney fees and costs in cases where PIP benefits have been denied or underpaid.
Insured motorists in Florida must carry PIP coverage that will pay up to $10,000 in benefits per person injured in an automobile-related accident. With PIP benefits limited and claims paid on a “first in time, first in right” basis, hospitals and other providers will benefit by quickly identifying and pursuing all underpaid claims through a PIP audit.
This Spring’s Crucial Court Decision
On May 18, Florida’s Fourth District Court of Appeal issued an important decision upholding providers’ rights. In Kingsway Amigo Insurance Company v. Ocean Health, Inc., the appeals court held that when an individual insurance policy provides for higher payment than the minimum required by Florida’s PIP law, the terms of the policy will dictate payment.
This case sets a precedent until there is a conflicting case by another district court, giving hospitals and other medical providers stronger legal footing to collect the balance of PIP benefits due them for treatment dating back to January 1, 2008, when Florida’s PIP law was re-enacted.
Florida’s PIP law includes a mandatory payment method of 80% of reasonable and necessary medical expenses, but lets insurers choose a Safe Harbor option that limits their payment obligation based on a fee schedule. In its May decision, the appellate court upheld a previous ruling in the medical provider’s favor. The court’s reason: since the PIP statute contains a choice of payment methods, it is important for the PIP insurer to “clearly and unambiguously choose and identify its selected payment methodology.”
In our firm’s experience, many PIP insurers use the lower fee schedule, but few have stated their choice of payment in their policies. The difference in PIP payment method can have meaningful impact and underpaid cases can add up.
Using a Cervical MRI billed at $1,600 as an example:
• Payment at 80% of Reasonable Charge due to provider $1,600 x $80% = $1280 owed by insurer
• Payment under 2008 Statute Fee Schedule due to provider $1,075.38 allowed per 2007 Medicare Part B schedule x 80% = $860.30 owed by insurer
Before the new law was passed, insurers were required to pay claims based on 80% of reasonable and necessary expenses. Some insurers have also unlawfully applied the new PIP law’s lower fee schedule method to pay claims on policies issued prior to 2008. If a policy was issued in 2007, payment is required under that policy’s terms – even if an accident happened after the 2008 law was enacted.
Significant Revenues at Stake
Overall, Hospitals and other medical providers have five years from the date an insurer denies or underpays a claim to seek an adjustment for overdue benefits. Many hospitals and other medical providers that rigorously pursue claims recovery with a five-year look-back PIP audit find the impact can be significant.
While PIP audits are a powerful tool to pinpoint aggregate revenues due, they do not burden hospitals’ and providers’ resources. A no-cost PIP audit of EOBs by an experienced legal team may reveal many cases in which insurers have shorted the provider. With aggressive legal representation – at no cost to the provider - revenue recovery payments may begin to flow within 60 days. Once an audit updates claim files, it’s prudent to have the legal team keep the provider current by reviewing all new PIP EOBs every month.
C. Glen Ged is founding partner in the law firm of Ellis, Ged & Bodden, P.A., whose dedicated PIP team represents hospitals and other medical providers statewide. He can be reached at, 1-888-EGB-FIRM (342-3476) or (561) 995-1966.
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