For the second time in recent months, a Florida appeals court has ruled in favor of providers seeking to collect payments under the state’s Personal Injury Protection (PIP) law. While these decisions are beneficial for recovering unpaid and underpaid PIP payments statewide, conditions may well change in the months ahead. Other PIP cases are moving through the appellate court system, and vigorous debate on changing Florida’s No-Fault Statute is likely in the 2012 Legislative Session.Therefore, it is important for Florida medical providers to take advantage of recent legal precedent and review their PIP-related EOB files this fall. For many providers, identifying and pursuing unpaid and underpaid PIP claims for patients treated since January 1, 2008 may result in the recovery of significant revenue.
July Ruling Has Bearing on MRI Payments
This summer, Florida’s Second District Court of Appeal issued a decision in favor of MRI providers. That ruling in Nationwide et al., v. AFO Imaging upheld an earlier court’s decision that insurers may not apply the Outpatient Prospective Payment System (OPPS) cap to reduce PIP payments for MRIs below the Medicare Part B Participating Fee Schedule rates.
Many insurers have routinely used the OPPS cap to reduce payments by $200 to $300 per MRI scan, saving them millions of dollars. The court held that Florida’s No-Fault Statute required the insurer to pay 80 percent of 200 percent of the Medicare Part B Participating Fee Schedule for the year treatment was rendered, or for 2007, whichever is higher.
Through its ruling, the court clarified that insurers must follow the language of the PIP statute – not create additional obstacles for providers seeking to collect payment for services.
Earlier Decision Strengthened Providers’ Rights
In May, Florida’s Fourth District Court of Appeal also upheld providers’ rights with a ruling in Kingsway Amigo Insurance Company v. Ocean Health, Inc. In its decision, the court said that the terms of an individual insurance policy dictate the size of the payment – even when that payment is higher than the minimum required by Florida’s PIP law.
The Kingsway Amigo ruling enhanced opportunities for hospitals and other medical providers throughout Florida to collect the balance of PIP benefits owed to them for auto accident-related medical treatment dating back to January 1, 2008, when Florida’s PIP law was re-enacted. The 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 court said that since the PIP statute gives insurers choices for payment methods, it is important for the insurer to “clearly and unambiguously choose and identify its selected payment methodology.” In our firm’s experience, many insurers have routinely used the lower fee schedule — paying 80% of 75% of reasonable and necessary charges — but few have included the required language in policies.
The difference in payment levels is considerable. For a billing of $1000, for example:
Payment at 80% of 75% of reasonable and necessary charges = $600
Payment at 80% of those charges, as PIP law specifies = $800
Benefit Limitations Make Timing Critical
Under Florida’s No Fault Insurance law, motorists must carry PIP coverage that will pay up to $10,000 in benefits per person injured in an automobile-related accident. The law provides for payment at a higher level than Medicare or third-party insurance’s contracted rates. However, PIP benefits are subject to a five-year statute of limitations and are limited to $10,000 per person. Claims are paid on a “first in time, first in right” basis. That means it’s essential for providers to move quickly.
After this year’s two favorable court rulings, our firm has found that some insurers are more amenable to paying PIP claims quickly and more equitably than in the past. But if the insurer contests a claim, providers can engage legal counsel to assist in collecting. Under Florida law, when a lawsuit is necessary for a PIP claim, all attorney costs and fees for recovering benefits are paid by the auto insurer – not the medical provider.
In light of the current legal and legislative climate, South Florida providers should consider a timely audit of all PIP-related EOBs for the past five years, and move forward to collect their unpaid and underpaid claims.
