Thought Leadership

This suit involved the legal issue of whether or not the insurer was required to reimburse the plaintiff pursuant to the 2007 non-facility limiting charge and, if so, whether this reimbursement would require the insurer to remove a budget neutrality adjustment when determining the amount to be paid. 

The defendant maintained that it correctly reimbursed the plaintiff pursuant to its policy and Fla. Stat. 627.736. In response to the defendant’s argument, the plaintiff argued that, in reimbursing CPT code 97012, the defendant should have paid at the higher 2007 Medicare Part B limiting charge rate as opposed to the 2020 Medicare Part B participating physicians rate, and that this reimbursement should also have the “budget neutrality adjustment” removed from the calculation of the physician’s fee schedule formula. 

In a supplemental memorandum of law, the defendant argued that it was not required to reimburse 97012 under the 2007 Medicare Part B limiting charge rate and that, even if it was required to reimburse under the 2007 Medicare Part B limiting charge rate, it would be incorrect to remove the “budget neutrality adjustment” from the published 2007 Medicare physician fee schedule formula. 

The court also noted that removing the budget neutrality adjustment from the published 2007 Medicare physicians fee schedule formula would be the only way that the 2007 Medicare Part B limiting charge rate would be higher than the 2020 Medicare Part B participating physicians fee schedule rate for CPT code 97012. 

The plaintiff’s argument—that the defendant improperly reimbursed it for CPT code 97012 by not issuing payment pursuant to the 2007 Medicare Part B limiting charge—relied on Priority Med. Centers, LLC v. Allstate Ins. Co., 319 So. 2d 724 (Fla. 3d DCA 2021), in which the Third District held that the highest reimbursement allowable under the Medicare Part B fee schedule is the non-facility limiting charge for 2007. 

However, the defendant’s argument pointed to Progressive Select Ins. Co. v. In-House Diagnostic Services, 359 So. 3d 817 (Fla. 4th DCA 2023), in which the Fourth District Court of Appeals reversed its previous position of aligning with the Third District in a unanimous, en banc decision and concluded that Fla. Stat. 627.736(5)(a)(2) requires an insurer to limit reimbursement to the fee schedules applicable to a given medical service and not the 2007 limiting charge rate. The defendant also pointed to a recent Sixth District decision in Progressive Express Ins. Co. v. SimonMed Imaging, 48 Fla. L. Weekly D990a (Fla. 6th DCA May 12, 2023), in which the Sixth District certified conflict with the Third District and ruled that, “[b]ased on the plain language of the statute, when read as a whole, the relevant benchmark for the floor amount under section 627.736(5)(a)2 is the Medicare Part B participating fee schedule, not the higher Medicare Part B limiting charge.” 

Citing these two decisions, the court agreed with the defendant in that there is nothing in Fla. Stat. 627.736 which requires an insurer to look beyond the three delineated fee schedules in section 627.736(5)(a)1, or that the limiting charge is somehow “silently” incorporated into the statute, and that section 627.736(5)(a)2 is not inclusive of the higher 2007 Medicare limiting charge and that the defendant correctly reimbursed Next Medical at the 2020 Medicare Part B non-facility participating physicians fee schedule amount for CPT code 97012. As the court ruled that the 2007 limiting charge is not the correct method for reimbursement, the court ruled that the issue of whether the budget neutrality adjustment was required to be removed from the 2007 Medicare physicians fee schedule formula when determining the 2007 Medicare Part B limiting charge rate was rendered moot. 

This ruling is significant as it reinforces the implications of the decisions made in Progressive Select Ins. Co. v. In House Diagnostic Services, 359 So. 3d 817 (Fla. 4th DCA 2023) and Progressive Express Ins. Co. v. SimonMed Imaging, 48 Fla. L. Weekly D990a (Fla, 6th DCA May 12, 2023), in ruling that the 2007 limiting charge is not an applicable fee schedule pursuant to Fla. Stat. 627.736(5)(a)1. As most carriers have been paying the limiting charge rate on certain CPT codes for the past few years, it is important to note that such payments now constitute an overpayment outside of the Third District and, as such, carriers now have a potential claim for unjust enrichment against providers who were reimbursed the 2007 limiting charge rate.
 

_{Case Law Alerts, 4th Quarter, October 2023 is prepared by Marshall Dennehey to provide information on recent 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. Copyright © 2023 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.}