PROGRESSIVE SELECT INSURANCE COMPANY v. DR. RAHAT FADERANI, DO, MPH, PA

Citation: Not availableDocket: 21-0232

Court: District Court of Appeal of Florida; November 9, 2021; Florida; State Appellate Court

Original Court Document: View Document

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Progressive Select Insurance Company appeals a final summary judgment that determined it improperly adjusted bills for personal injury protection (PIP) claims, leading to an underpayment to Dr. Rahat Faderani. The trial court denied Progressive's motion for summary judgment, ruling that the use of National Correct Coding Initiative (NCCI) edits for bill adjustments constituted bad faith, citing SOCC, P.L. v. State Farm Mutual Automobile Insurance Co. However, following amendments to Florida Statutes section 627.736(5)(a)3, the use of Medicare coding policies and payment methodologies by insurance companies is permitted, provided these do not impose utilization limits. The appeal arose after Progressive's insured, involved in an auto accident, had $10,000 in PIP benefits subject to a $1,000 deductible. Treatment from prior providers was adjusted using NCCI edits, which impacted the deductible calculation before Faderani's bills were applied. After exhausting PIP benefits through payments to other providers, Faderani sued Progressive for breach of contract based on an assignment of benefits, alleging improper bill reductions. Progressive countered, asserting that the PIP benefits were exhausted and that Faderani’s claims were barred. The court found that Progressive's use of NCCI edits was authorized by statute, and due to the exhaustion of PIP benefits prior to the lawsuit, reversed the trial court's decision and ruled in favor of Progressive.

Progressive filed a motion for summary judgment, asserting it had exhausted the claimant’s PIP benefits prior to the lawsuit and had paid the statutory policy limits. It contended that it could not be held liable for payments exceeding those limits without a bad faith allegation, which was absent. The appellee argued that Progressive misapplied NCCI edits, relying on SOCC, which Progressive countered was not binding due to statutory amendments allowing Medicare coding methodologies. The court ultimately granted the appellee’s motion, denying Progressive’s, and awarded $116.55 plus interest, along with reasonable attorney’s fees and costs. Progressive's motion for rehearing was denied, leading to an appeal. The standard of review for summary judgment and the interpretation of the Florida No-Fault (PIP) Statute is de novo. Progressive maintained that the PIP benefits were exhausted before the suit, citing case law that an insurer has no liability for unresolved claims after exhausting benefits unless bad faith is proven. The appellee did not allege bad faith in his Statement of Claim. Instead, he claimed Progressive made improper payments, which he argued should negate the exhaustion defense. Some case law supports that improper payments could allow a provider relief, as seen in Coral Imaging Services, although later limited to untimely payments. In a similar case involving Allstate, proper payments were confirmed, leaving the question of whether improper payments could counter the exhaustion defense unaddressed. If considered anew, the prevailing view would be that improper payments do not constitute bad faith sufficient to overcome the exhaustion defense.

In Northwoods, bad faith in the handling of an insurance claim was defined as conduct directed at the provider attempting to avoid exhausting benefits, not related to claims from third parties without evidence of contestation by those parties. The court found that Progressive failed to adequately address the appellee's bad faith or improper payments claim. It determined that the lower court erred in granting summary judgment based on the improper application of National Correct Coding Initiative (NCCI) edits, which the appellee argued were inappropriate according to the SOCC case. However, the SOCC case involved an older version of Florida Statutes section 627.736(5)(a)3, which did not incorporate NCCI edits into the Florida No-Fault statutes. The court clarified that while the earlier ruling stated that NCCI edits could not be used to bundle services, it did not deem them as improper utilization limits.

Subsequent amendments to section 627.736(5)(a)4. in 2012 allowed for the use of Medicare coding methodologies in reimbursement decisions, stating that insurers must reimburse providers for lawful care regardless of Medicare eligibility, provided the coding policies do not impose utilization limits. Recent case law confirmed that insurers could employ Medicare coding policies, such as the Multiple Procedure Payment Reduction (MPPR), to adjust reimbursements, which do not limit the number of services a patient can access but rather the reimbursement amount. This interpretation emphasizes that limitations on reimbursement do not equate to restrictions on patient care or provider services.

A utilization limit is defined as patient-oriented and prevents a patient from receiving treatment, not as a means for providers to expand billable service codes. The PIP statute allows for coding policies related to service bundling, requiring providers to submit claims using CMS forms (Fla. Stat. 627.736(5)(d)). Insurers are not obligated to pay claims for upcoded or improperly unbundled services (Fla. Stat. 627.736(5)(b)1.e.). The legislature intended for insurers to consider coding policies, including bundling, as outlined in the NCCI policy manual. The NCCI, established by CMS, aims to prevent inappropriate payments for services that should not be billed together, with specific edits for both physicians/practitioners and outpatient hospital services. The NCCI PTP edits and MUE program are designed to avoid incorrect code combinations and improper payments related to service units. The NCCI serves as a coding policy rather than a utilization limit and mandates appropriate bundling of services. Florida Statute 627.736(5)(b)1.e. supports that insurers can deny payment for unbundled services. Citing relevant case law, it is established that NCCI edits are not utilization limits but coding policies permissible under section 627.736(5)(a)3. Progressive utilized these edits appropriately in determining reimbursement and did not act in bad faith, having exhausted the insured's PIP benefits prior to litigation. The trial court’s summary judgment in favor of the appellee was therefore incorrect, leading to a reversal and remand for judgment in favor of Progressive.