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Why are Insurance Companies Adjusting PIP Reimbursements to the Medicare Fee Schedule?

Every Florida driver is required to carry at least $10,000 in Personal Injury Protection (“PIP”) benefits. In the event of an auto accident, the injured driver, regardless of whether they were at fault or not, can be reimbursed for their medical treatment up to the $10,000 policy limit. In most instances, the injured party will assign their policy benefits to their medical provider. In exchange for the rights to be reimbursed under the insured’s PIP policy, the medical provider will treat and care for the injuries of the insured.

Many times, providers are confused as to exactly how much of the billed amounts the insurers are required to reimburse. Under a Florida’s No-Fault law, insurers are required to reimburse 80 percent of “reasonable expenses” for “medically necessary” treatment. Accordingly, Florida amended the PIP statute in 2007 to provide guidance as to what is “reasonable” when assessing submitted claims. This amendment spells out that insurers may limit reimbursement to 80 percent of the following charges:

Emergency transport and treatment by providers licensed under chapter 401, 200 percent of Medicare.

For emergency services and care provided by a hospital licensed under chapter 395, 75 percent of the hospital’s usual and customary charges.

For emergency services and care as defined by s. 395.002 provided in a facility licensed under chapter 395 rendered by a physician or dentist, and related hospital inpatient services rendered by a physician or dentist, the usual and customary charges in the community.

For hospital inpatient services, other than emergency services and care, 200 percent of the Medicare Part A prospective payment applicable to the specified hospital providing the inpatient services.

For hospital outpatient services, other than emergency services and care, 200 percent of Medicare Part A Ambulatory Payment Classification for the specific hospital providing the outpatient services.

For all other medical services, supplies, and care, 200 percent of the allowable amount under the participating physicians schedule of Medicare Part B. However, if such services, supplies, or care is not reimbursable under Medicare Part B, the insurer may limit reimbursement to 80 percent of the maximum reimbursable allowance under workers’ compensation, as determined under s. 440.13 and rules adopted thereunder which are in effect at the time such services, supplies, or care is provided. Services, supplies, or care that is not reimbursable under Medicare or workers’ compensation is not required to be reimbursed by the insurer.

Thus, based on the statutory language in the section above, it allows insurers to adjust their reimbursements to the Medicare Fee Schedules, depending on what type of charge they are billed. A good example of a typical charge that most insurers receive on a regular basis would be an MRI scan (CPT code 72141). For purposes of providing a clear example, let’s say an MRI company bills the insurance company $2,000 for an MRI scan. Once the insurer receives this charge, they will apply it to the appropriate Medicare Fee Schedule year, which ranges from 2007 to present. For CPT code 72141, 200% of the 2007 Medicare Fee Schedule is $1,006.02. However, as stated under the statute above, the insurer is only required to reimburse 80% of that, which would be $804.82. It is quite clear why providers are confused when they receive a reimbursement that is less than half of what they billed.

Litigation has spurred regarding whether it was proper for insurers to apply the Medicare Fee Schedule despite having no language in their policy of such. In a landmark decision that settled this dispute, the Florida Supreme Court held that under the 2008 amendments to the PIP statute, a PIP insurer cannot take advantage of Medicare Fee Schedules to limit reimbursements without notifying its insured by electing those fee schedules in its policy. See Geico General Insurance Company vs. Virtual Imaging Services, Inc., 2013 WL 3332385, (July 3, 2013). This decision essentially provides a pre-requisite for insurers before they can adjust their bills with the Medicare Fee Schedules; in order to adjust their bills to the fee schedule, they must first elect to do so in the insured’s policy.

When you have been injured in an auto accident or you have provided medical treatment to someone who has, the last thing you want to do is fight an insurance company over compensation that you are owed. At Sibley Dolman Gipe Accident Injury Lawyers, PA, we have a team of experienced PIP attorneys who are well versed with the statutory guidelines of Florida’s no-fault law. We have a rich understanding of how Florida’s no-fault statute works, as well as the practices that the insurance companies can and cannot do. If you have had your bills denied or suspiciously reduced, contact the PIP team at Sibley Dolman Gipe Accident Injury Lawyers, PA for a free evaluation of your case.

Sibley Dolman Gipe Accident Injury Lawyers, PA
800 N. Belcher Road
Clearwater, FL 33765
(727) 451-6900

https://www.dolmanlaw.com/pip-personal-injury-protection-attorney/