Nationwide Mut. Fire Ins. Co. v. AFO Imaging, Inc., 71 So. 3d 134 (Fla. 2d DCA July 6, 2011).
Florida’s Second District Court of Appeal interpreted the language of Section 627.736(5)(a)(2)(f), which allows PIP insurers to limit reimbursement for nonemergency, nonhospital health care to 80 percent of “200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.” The Second District held that the statute unambiguously referred to the participating physicians schedule of Medicare Part B as the only schedule upon which a PIP insurer may rely on limiting reimbursements to MRI facilities. The court rejected the argument that PIP insurers should be permitted to further limit the reimbursement, as Medicare would do, based on Medicare’s Hospital Outpatient Prospective Payment System (“OPPS”).
AFO Imaging, as assignee and on behalf of other similarly situated healthcare providers, filed a class action seeking higher PIP payments from Nationwide to reimburse them for MRI services rendered to Nationwide’s insureds in Florida.
When Nationwide received a claim for PIP benefits from AFO Imaging, it calculated the reimbursement and paid under subsections 627.736(5)(a)(2)(f) (which allows PIP insurers to limit reimbursement for nonemergency, nonhospital MRI services to 80 percent of “200 percent of the allowable amount under the participating physicians schedule of Medicare Part B”) and 627.736(5)(a)(3) (which states the applicable payment limitation under Medicare “may not be less than the allowable amount under the participating physicians schedule of Medicare Part B”).
The issue, in this case, centers around the interpretation of the phrase “the allowable amount under the participating physicians schedule of Medicare Part B,” which appears in subsection (5)(a)(2)(f). Nationwide interpreted “the allowable amount” to mean the amount Medicare would allow (i.e., pay) for the MRI services rendered. However, the amount Medicare would pay is not only based on the amount set forth in the participating physicians schedule.
A “special rule for imaging services” was added pursuant to Congress’s Deficit Reduction Act of 2005, which requires Medicare to cap reimbursements for the technical component of MRI services (i.e., the process of taking the image) if the billed charges for the technical component exceeds Medicare’s OPPS fee schedule amount. See 42 U.S.C. §1395w-4 (b)(4)(A). Stated differently, Medicare’s reimbursement of the technical component of MRI services is calculated both under the participating physicians schedule and under OPPS, and then Medicare pays the lesser amount.
Nationwide calculated its reimbursement rate by applying the same methodology that Medicare applies to MRI reimbursements. Nationwide asserted that OPPS was part of “the participating physicians schedule of Medicare Part B.” It argued that the statutory phrase “the allowable amount” which immediately preceded the phrase “participating physicians schedule of Medicare Part B,” should be interpreted to mean the amount that actually would have been allowed under the Medicare program. Nationwide paid the OPPS amount whenever it was lower than the participating physicians schedule amount.
The Second District rejected Nationwide’s reading of the statute because the only schedule referenced in section 627.736(5)(a)(2)(f) is the participating physicians schedule. The court found OPPS to be a distinct and separate component of Medicare Part B. AFO Imaging, citing All Family Clinic of Daytona Beach v. State Farm Mut. Auto. Ins. Co., 685 F. Supp. 2d 1297 (S.D. Fla. 2010). Thus, even though Medicare would pay less than the amount of the participating physicians schedule if the OPPS scheduled amount for the services was less, PIP insurers are still required to pay the participating physicians schedule amount. Essentially, the Second District held that the Legislature did not intend to cap reimbursement at 80 percent of 200 percent of what Medicare would pay, but rather specifically referenced the participating physicians fee schedule as the schedule to apply.
Finding that subsections 637.736(5)(a)(2)(f) and (5)(a)(3) unambiguously referred to, and only to, Medicare Part B’s participating physicians schedule, the Second District affirmed a final judgment against Nationwide in the class action asserting that it had underpaid health care providers for MRI services.