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SIU Spotlight

Understanding Reimbursements for CPT Code 97039

SIU Spotlight, Issue 1, Vol. 1, July 2024

July 1, 2024

CPT code 97039 has been in a state of constant flux in Florida and recent rulings have created greater change. First, one must understand what 97039 is and its history. According to the American Medical Association (AMA), CPT code 97039 is a medical procedure that falls under “Constant Attendance Physical Medicine and Rehabilitation Modalities.” This requires direct one-on-one contact with the patient by the provider. This means the provider performs the treatment directly and said treatment should not be performed contemporaneously with another procedure. Only the actual time of the skilled therapist’s direct contact with the patient is covered. CPT code 97039 is used when a therapy modality does not have a specific code that is reimbursable under Medicare. 

Typically, this code was reimbursed at $15.00 under the Florida Workers’ Compensation fee schedule. However, things changed after United Automobile Insurance Company v. Lauderhill Medical Center LLC a/a/o Robert White, 350 So.3d 754 (Fla. 4th DCA 2022). The Fourth District Court of Appeals (DCA) held that the actual treatment and the services control, not the billed CPT code. If a CPT code is no longer recognized but reimbursable, then the insurer cannot simply default to the Workers’ Compensation Fee Schedule. If the CPT code is no longer valid but the service remains reimbursable under Medicare, then the insurance carrier must make a reasonable analysis determination. That is, if the carrier determines the charge to be reasonable, it should reimburse 80% of the usual and customary charges. 

When a carrier sees CPT code 97039 on a CMS 1500 form, it must look beyond the code and review the medical records in order to make a determination of what modality or treatment service was truly rendered. The carrier must then analyze whether “this service [is] reimbursable under Medicare.” Id. This begs the question, “When can a carrier default to the Florida Workers’ Compensation Fee Schedule rate of $15.00?” The court seemed to allow reimbursement under the Workers’ Compensation Fee Schedule when the service is not reimbursable under Medicare. See Id. An example of this would be if a provider submits a bill using CPT 97039, and the modality of treatment provided was “dry hydrotherapy.” Dry hydrotherapy is not a reimbursable code under the Medicare Coding and Policy guidelines. Specifically, Medicare has made a decision that dry hydrotherapy is an investigatory procedure and considered not reasonable or medically necessary. See CMS.gov Memorandum L35036 re: Therapy and Rehabilitation Services (PT, OT). As such, the proper reimbursement rate would be under the Workers’ Compensation Guidelines. See, United Automobile Insurance Company v. Lauderhill Medical Center LLC a/a/o Robert White, (Fla. 4th DCA 2022).

Another example would be if the provider submits CPT code 97039 for reimbursement, and the treatment render was for Whirlpool therapy. Whirlpool therapy under Medicare Coding and Policy guidelines is billable under CPT code 97022. See, CMS.gov Memorandum A53058 re: Billing and Coding: Home Health Physical Therapy. CPT code 97022 is still an active CPT code under Medicare and still shows reimbursement amounts under the Centers for Medicare and Medicaid Services. However, Medicare’s coding policy does require separate documentation reflecting medical necessity for the procedure. See Id. If the medical records are unquestionable and explicit that treatment was rendered for Whirlpool therapy and the CPT code billed was 97039, a carrier may “crosswalk” CPT code 97039 to 97022 and reimburse under CPT code 97022.

While the Fourth District Court of Appeal in Lauderhill Medical Center LLC gave further clarification on CPT code reimbursement methodology, it is key for carriers to remain vigilant in the constantly changing landscape of Florida PIP litigation. If a carrier wishes to avoid litigation, then it seems the most practical reimbursement would be 80% of billed amount for CPT code 97039.

Alex is a member of the firm’s Fraud and Special Investigation Unit (SIU) Practice Group and is located in Fort Lauderdale, Florida. In this arena, he works in tandem with insurance carriers evaluating cases and taking Examinations Under Oath on SIU-related issues, resolving PIP disputes within the state of Florida. 


 

SIU Spotlight, Issue 1, Vol. 1, July 2024 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2024 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

Firm Highlights

Thought Leadership

U.S. Supreme Court Decides Key Issue Regarding Interstate Freight Broker Liability

Freight brokers are intermediaries.  They connect shippers of goods with trucking companies that transport those goods.  Freight brokers match a load of freight with a trucking company and oversee the logistics of the transportation. For a number of years there has been a division among the Federal Circuits regarding the potential liability of freight brokers when the trucking companies that they retain for interstate loads are involved in accidents.  At the center of this division was the Federal Aviation Administration Authorization Act of 1994 (FAAAA).  Some Federal Circuit Courts have held that state law negligent hiring claims against freight brokers were preempted by the FAAAA .  Other Federal Circuits Courts have held that even if preemption applied, the “safety exception” in the FAAAA saved state law negligent hiring claims from federal preemption.  On May 14, 2026, the U.S. Supreme Court addressed the conflict in Montgomery v. Caribe Transport II, LLC, et al, No24-1238. In that case freight broker C.H. Robinson selected Caribe Transport to haul an interstate load. The commercial truck driver employed by Caribe Transport allegedly caused an accident and the plaintiff, Montgomery, was seriously injured. Montgomery brought an action against the driver, Caribe Transport and C.H. Robinson. The allegation against C.H. Robinson was that it negligently retained Caribe Transport when it knew, or should have known, that it was an unsafe company. The Seventh Circuit Court of Appeals held that Montgomery’s claims against C.H. Robinson were preempted by the FAAAA. The plaintiff appealed to the U.S. Supreme Court.  The U.S. Supreme Court’s decision focused primarily on the safety exception in the FAAAA.  That provision provides that the FAAAA preemption “…shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” C.H. Robinson argued, as freight brokers historically have, that their function was not “with respect to motor vehicles” because they do not own trucks or employ drivers. They are merely intermediaries, connecting entities who need freight moved with entities who can do that job. Therefore, C.H. Robinson argued that preemption applied, not the safety exception. The U.S. Supreme Court did not accept that argument. The Court focused on the meaning of the phrase “with respect to” in the safety exception. The Court held that it means “referring to”, “concerning” or “regarding”. Therefore, writing for a unanimous Court, Justice Barrett concluded that “[r]equiring C.H. Robinson to exercise ordinary care in selecting a carrier therefore “concerns” motor vehicles—most obviously, the trucks that will transport the goods. So, Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception, which saves it from preemption.” Justice Kavanaugh, in his concurring opinion, noted the effect this ruling may have on freight brokers and their insurers throughout the country: Importantly, the Court's decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents. As even plaintiff's counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies. Tr. of Oral Arg. 27-29. In plaintiff's counsel's words, the brokers "just have to hire carriers that actually have a reasonable policy," and "the broker is not going to have a problem if it's asking the hard questions of the carrier." Id., at 42, 45. In addition, the proximate-cause requirement in typical state tort law should help protect brokers from excessive liability. Id., at 25. That said, the brokers rightly caution against naivete. In the real world, as the brokers forcefully respond, state tort law can be unpredictable, and the costs to brokers of litigation and insurance may be significant even when brokers prevail in lawsuits. Moreover, the costs of litigation and insurance, as well as the costs of brokers' conducting more substantial inquiries into trucking companies, will cascade through the economy and be paid in part by American consumers in the form of higher prices. The concerns expressed by the brokers are legitimate and weighty. The key point here is that freight brokers can no longer claim they are protected from negligent retention claims by the FAAAA (in cases involving interstate transportation). The challenge will be to determine what is considered ”reasonable efforts” used by brokers when retaining transportation companies. 

Thought Leadership

PA Middle District Dismisses Claims Against School District and its Superintendent, Principal, Special Education Director, and Classroom Teacher

A five-year-old special education student was enrolled in the Wyoming Valley West School District and attended the State Street Elementary School during the 2024-2025 school year. The student refused to clean up classroom toys at dismissal. When his teacher allegedly grabbed him by the wrist to walk him back to his seat, the student dropped to the floor and began crying. The teacher then allegedly grabbed the student by the ankle and dragged him across the floor. Following an investigation, criminal charges were not advanced by the county DA, and the school permitted the teacher to return to the classroom. The student’s parents sued, lodging thirteen legal counts under both state and federal law, which sought monetary damages from the teacher, the school district, the superintendent, the principal, and the director of special education. The plaintiff’s 42 USC 1983 claims were dismissed as to the school district for failure to allege a policy or custom violation, and the failure to alleged deliberate indifference in the failure-to-train context. As to the superintendent, building principal, and special education director, the Section 1983 claims were also dismissed for failure to allege personal involvement on the part of the individuals. Regarding an equal protection claim asserted against all defendants, the motion to dismiss was also granted for a failure to advance a plausible equal protection claim, holding that “plaintiffs' single-act allegations do not include a factual basis to even infer that the act was motivated by discriminatory animus rather than some other non-discriminatory impulse.” The court further dismissed the plaintiff’s negligence-based claims including negligence against the teacher and district administrators, NIED, and vicarious liability under the Political Subdivision Tort Claims Act (PSTCA). The federal claims under the IDEA, Section 504, and the ADA were also dismissed in various respects. The IDEA claim was dismissed against all defendants with prejudice for failure to exhaust administrative remedies. The Section 504 claims against the individual defendants were also dismissed with prejudice, as districts, not individuals, are the recipients of federal funds under Section 504. However, the Section 504 and ADA claims were dismissed without prejudice as to defendant Wyoming Valley West, and the plaintiff was permitted leave to amend.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict.