.

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 If the CPT code is no longer valid but the service remains reimbursable under Medicare, then the insurance carrier must make a reasonable analysis determination.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

Appellate Division Affirms Dismissal of Legal Malpractice Counterclaim Against Martin Law Firm

In Martin v. Loury, 2026 N.J. Super. Unpub. LEXIS 1617 (App. Div. July 15, 2026), Martin Law Firm represented Kirk Loury in an employment matter Mr. Loury filed against his former employer, Concord Equity Group Advisors LLC (“Concord”). The allegations included, among other things, that Loury was not fairly compensated for his employment with Concord. After a bench trial finding in Loury’s favor, the Appellate Division remanded this matter in February 2016 for a second trial. During the second trial, Concord CEO, Lee Argush, testified to lower compensation estimate than first trial. On remand, the second trial judge awarded Mr. Loury the same damages as the first judge, finding Mr. Argush not credible. After the findings during the second trial, Martin Law Firm filed an action against Mr. Loury to recover legal fees and costs of representing Mr. Loury in a second bench trial and Mr. Loury filed a counterclaim against Martin Law Firm for legal malpractice, alleging he should have received an even higher award in the second bench trial. In this allegation, Mr. Loury, through his expert, claimed that Martin Law Firm should have recalled Mr. Loury to the stand to rebut Mr. Argush’s testimony to allege an alternative theory of damages. Mr. Loury’s expert admitted that the second judge already rejected Mr. Argush's theory and accepted Loury's damages theory. The trial court barred Mr. Loury’s expert and dismissed Loury's counterclaim with prejudice before convening the collection trial, and the jury ruled in Martin Law Firm’s favor. Mr. Loury appealed the trial court's pretrial rulings barring his liability expert from testifying in support of his legal malpractice counterclaim, denying his motion for summary judgment on that counterclaim, and denying his motion to amend his counterclaim by adding attorney Joseph A. Martin as a codefendant. In affirming the trial court’s decision, the Appellate Division held that the trial court properly excluded Loury’s expert testimony in the counterclaim against Martin Law Firm because the expert could not explain how calling Loury as a rebuttal witness would have increased damages when the second judge already rejected Mr. Argush's testimony and accepted Loury's damages theory, making the expert’s causation opinion speculative. The Appellate Division also held that the trial court properly denied Mr. Loury's summary judgment motion on his malpractice counterclaim because reasonable minds could differ on whether Mr. Martin's alleged failures would have changed the second judge's damages award, given the judge already found Mr. Argush not credible, creating genuine factual disputes precluding summary judgment. Also, the Appellate Division held that the trial court properly denied Loury's May 2023 motion to add Joseph Martin individually because the statute of limitations expired in February 2022, six years after the 2016 appellate remand when Mr. Loury incurred new legal costs, and relation back did not apply because Mr. Loury knew Mr. Martin's identity throughout and strategically chose to sue only Martin Law Firm in his 2019 counterclaim.

Thought Leadership

Pennsylvania Supreme Court Takes Up the Gist of the Action Doctrine

The gist of the action doctrine has been a hot topic in legal malpractice cases in Pennsylvania over the last several years.  Beginning in 2014, the Pennsylvania courts applied the gist of the action doctrine to professional liability actions, following the Pennsylvania Supreme Court’s opinion in Bruno v. Erie Ins. Co., 106 A.3d 48 (Pa. 2014).  In Bruno, the court applied the gist of the action doctrine to a professional negligence claim, and found that a negligence claim was not barred simply because the parties were in a contractual relationship where the gist of the claim sounded in negligence. Thereafter, courts in Pennsylvania applied the gist of the action doctrine to breach of contract claims as well, finding that where the allegations sounded in negligence, a plaintiff could not recast a negligence claim as one for breach of contract. This was important because of the distinction between statutes of limitations: negligence claims must be brought within two (2) years, while breach of contract claims can be brought within four (4) years.  Then, last year, the Pennsylvania Superior Court held that the gist of the action doctrine does not apply to breach of contract claims as seen through two opinions. These opinions were Swatt v. Nottingham Village, 342 A.3d 23 (Pa. Super. 2025) and Poteat v. Asteak, et al., 350 A.3d 198 (Pa. Super. 2025). That is, the gist of the action doctrine can bar a negligence claim but it cannot bar a breach of contract claim.  This month, the Pennsylvania Supreme Court granted the petition for allowance of appeal in Poteat.  The Supreme Court phrased the issue for consideration as follows: Whether the Superior Court majority’s holding conflicts with this Court’s holding in Bruno v. Erie Insurance Co., 160 A.3d 48 (Pa. 2014), as well as Superior Court opinions that applied Bruno, and departs from almost 200 years of controlling precedent that distinguishes between causes of action in contract and tort based upon the nature of the duty that was allegedly breached? Attorneys on both sides of legal malpractice matters no doubt look forward to clarification on these issues from our Supreme Court.

Thought Leadership

Delaware Superior Court Clarifies Pleading Standard for Legal Malpractice Claims

In the matter of Edelstein v. Kirschner, No. N25C-09-018 FJJ, 2026 Del. Super. LEXIS 45, at *1 (Super. Ct. Jan. 29, 2026), the plaintiff law firm sued its former client for unpaid legal fees in the amount of $4,399.35. The former client asserted a counterclaim alleging legal malpractice. More, specifically, the former client claimed that his lawyer committed malpractice be recommending that he settle an underlying lawsuit by entering into a stipulated judgment for an excessive amount with interest that was accruing at “an outlandish” interest rate. The law firm moved to dismiss the counterclaim on the basis that its former client had not alleged facts reflecting that he could prove the case within the case. That is, facts reflecting that his attorneys caused him to lose the underlying case. The Superior Court held that while a legal malpractice plaintiff in cases arising from underlying litigation must prove the case within the case to survive a summary judgment motion, he does not need to plead facts reflecting as much in order to survive a motion to dismiss. While this case addresses the pleading requirements of a legal malpractice case in Delaware, it also serves as reminder that chasing unpaid legal fees from a former client can often give rise to a legal malpractice counterclaim. Attorneys seeking to collect unpaid legal fees should ensure that the fees they seek are for a significant amount, which would be recoverable if a judgment is obtained. Otherwise, the effort could backfire.

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.