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Ongoing OPPS Obstacles?

July 6, 2013, will mark two years since the Second District Court of Appeals decided Nationwide Mutual. Fire Ins. Co. v. AFO Imaging, Inc., 71 So. 3d 134 (Fla. 2d DCA 2011) and held that the PIP statute did not authorize Florida insurance carriers to use Medicare’s OPPS schedule in reducing MRI bills. However, in light of the new PIP statute that went into effect January 1, 2013, insurers feel emboldened to continue using OPPS despite Nationwide. However, any reliance on the current PIP statute is misplaced.

First, please allow a brief recap. What is OPPS? OPPS in simplest terms is Medicare’s Outpatient Prospective Payment System, adopted by the federal government as part of budget deficit reduction measure and establishes additional, percentage, reductions for outpatient MRIs and diagnostic tests. So, you have the initial Medicare reduction fee schedule, then OPPS which allows for further reductions. Prior to Nationwide, County and Circuit Courts, were split on whether the PIP statute permitted the use of OPPS, by insurers, as an additional fee schedule to reduce MRI bills.

Insurers point to the phrase “the allowable amount”, contained within Fla. Stat. 627.736(5)(a)(2)(f) [2008], which authorized insurers to limit reimbursement to 200% of the participating physicians schedule to Medicare Part B. Some insurers prevailed in their argument that allowable amount includes OPPS. See Bravo v. Altamonte Spgs Diagnostic Imaging, Inc., 17 Fla. L. Weekly Supp. 194b (Fla. Orange Cty. Jan 14, 2010); and V&T Invest. Partners v. State Farm Mut. Automobile Ins. Co., 18 Fla. L. Weekly Supp. 490a (Fla. Seminole Cty. Feb. 16, 2011) (Holding that the “allowable amount” under the participating physician fee schedule of Medicare Part B includes all applicable Medicare guidelines including OPPS).

The Second District Court of Appeals finally cleared the field, in a massive lawsuit comprised of at least 10 major PIP insurers, wherein the Court rejected the argument that insurers were entitled to use OPPS because it is part of the Medicare Part B physician’s schedule as an “allowable amount.” The Court noted that OPPS is an entirely separate component of Medicare Part B and that the statute, as written, unambiguously referred to the participating physicians schedule as the schedule upon which to rely.

As recently as May 11, 2012, a Court found that an MRI provider had a right to receive benefits under the reimbursement rate for the physicians schedule of Medicare Part B, which is not  subject to or to include OPPS; and these benefits were to be paid despite the exhaustion of benefits. Tampa Bay Imaging, LLC v. Amica Mut. Ins. Co., 19 Fla. L. Weekly Supp. 749a (Fla. Hillsborough Cty. May 11, 2012).

So what has changed? The new PIP statute, at Fla. Stat. 627.736(5)(a)(1)(f), still retains the permissive language of “allowable amount” in reference to 200% of the participating physicians fee schedule, BUT now with exceptions. The new exceptions apply to Medicare Part B in the case of services, supplies, and care provided by ambulatory surgery centers and clinical labs; and the specific adoption of the Durable Medical Equipment Prosthetics/Orthotics and Supplies fee schedule of Medicare Part B, in the case of durable medical equipment. Note however, that OPPS is still NOT provided in the current bill.

Despite Nationwide and the misguided reliance on the new PIP statute, insurers still try and reduce MRI bills by applying OPPS; this remains inappropriate and runs afoul of binding case-law. The minimum reimbursement a PIP insurer must pay an MRI provider is 200% of the participating physicians fee schedule for 2007 and is prohibited by Fla. Stat. 627.736(5)(a)(3) from applying any other Medicare limitations “regardless of whether such provider is entitled to reimbursement under Medicare.” See Tomoka Diagnostics v. State Farm Mut. Automobile Ins. Co., 19 Fla. L. Weekly Supp. 60a (Fla. Volusa Cty. Oct. 5, 2011).

No doubt, we can expect to see further improper OPPS reductions to MRI bills. We continue to support our MRI providers in seeking resolutions for inappropriate OPPS application and reduction.