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Florida Fourth DCA rules in PIP case that State Farm was entitled to discount payments to MRI provider for three MRIs performed on same day based on Medicare’s Multiple Procedure Payment Reduction

On May 26, 2021, in State Farm v. Stand Up MRI of Boca Raton, P.A., No. 4D21-310, the Florida Fourth DCA reversed a county court’s summary judgment for the plaintiff medical provider in a Personal Injury Protection (PIP) insurance case, after concluding that the PIP statute did not preclude State Farm’s method of calculating reimbursement. The dispute arose because of State Farm’s use of the Medicare Part B fee schedule and application of the Medicare Multiple Procedure Payment Reduction (“MPPR”), which resulted in substantial discounts from the billed amounts for two of three MRIs performed by the plaintiff on the same day. MPPR is a payment methodology used by the Medicare program to reduce payment for medical services when two or more services have been rendered on the same day, to the same patient, by the same physician, in the same session. The MPPR provides that the service with the highest practice expense will be reimbursed at 100% and then any other services will be reimbursed at 50%. The Fourth DCA concluded that neither the PIP statute, nor State Farm’s policy, prohibited State Farm from applying the MPPR to reduce the reimbursement to an amount less than the allowable amount of the 2007 Medicare Part B fee schedule. The Court approvingly quoted from the opinion of County Judge Di Pietro in Plantation Open MRI, LLC v. State Farm Mutual Automobile Insurance Co., 25 Fla. L. Weekly Supp. 831a (Broward Cty. Ct. Nov. 3, 2017): “[State Farm]’s policy states that it will not pay more than 80% of the schedule of maximum charges including the use of Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services. While [State Farm]’s policy contains a directive for which fee schedule must be used, the directive does not override [State Farm]’s ability to then reduce that fee schedule’s allowable amount through the use of Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services.” Note: On May 26, 2021, in State Farm v. Pan Am Diagnostic Services, Inc., et al., No. 4D21-487, the Florida Fourth DCA reached the same conclusion in another State Farm PIP case, additionally concluding that the MPPR is not an improper utilization limit. Fla. Stat. § 627.736(5)(a)3 (2013) specifically provides that insurers can apply payment methodologies under Medicare Part B when issuing reimbursements to providers under PIP, so long as the payment methodology is not a utilization limit. The Fourth DCA approvingly cited several circuit court decisions which had determined that the State Farm methodology did not constitute a utilization limit. See State Farm Mut. Auto. Ins. Co. v. Millennium Radiology, LLC, 27 Fla. L. Weekly Supp. 998a, 2019 WL 8301181, at *3 (Fla. 11th Cir. Ct. Feb. 8, 2019); AFO Imaging, Inc. v. State Farm Mut. Auto. Ins. Co., 24 Fla. L. Weekly Supp. 165b (Fla. 13th Cir. Ct. Mar. 15, 2016); and Multicare Rehab., LLC v. Progressive Select Ins. Co., 24 Fla. L. Weekly Supp. 171a (Fla. 17th Cir. Ct. Jan. 14, 2016).