SUNRISE CHIROPRACTIC AND REHABILITATION CENTER a/a/o BICHENET LOUIS v. SECURITY NATIONAL INSURANCE COMPANY

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

SUNRISE CHIROPRACTIC AND REHABILITATION CENTER, INC.
a/a/o Bichenet Louis,
Appellant,

v.

SECURITY NATIONAL INSURANCE COMPANY,
Appellee.

No. 4D21-188

[May 19, 2021]

Appeal from the County Court for the Seventeenth Judicial Circuit,
Broward County; Nina W. Di Pietro, Judge; L.T. Case Nos. COCE-17-
000830 (49) and CACE-19-001560 (AP).

Christina M. Kalin and John C. Daly of Daly & Barber, P.A., Plantation,
for appellant.

No appearance for appellee.

PER CURIAM

This appeal arises out of a county court claim for Personal Injury
Protection (“PIP”) benefits. Appellant Sunrise, through an assignment of
benefits, sought reimbursement for chiropractic care rendered to an
individual (“insured”) who was covered by an insurance policy with
appellee Security National Insurance Company (“insurer”). Insurer used
the Centers for Medicare & Medicaid Services’ (“CMS”) payment files to
determine the reimbursement amount. The payment files included a two
percent reduction for each unit of chiropractic adjustment based upon the
government’s recoupment of costs. The trial court granted summary
judgment for insurer, holding that insurer’s payment to Sunrise, which
included the two percent reduction, was proper. We reverse, as we hold
insurer is not entitled to the two percent reduction.

Insured was injured in a car accident and sought related and medically
necessary treatment for his injuries from Sunrise. The treatment included
chiropractic adjustments to the spine, billed under chiropractic treatment
code 98941. Insured executed an assignment of benefits to Sunrise, and
Sunrise filed suit for breach of contract alleging that insurer failed to pay
all sums due. Insurer answered and alleged in its affirmative defense that
Sunrise’s bill “was properly reduced per the Medicare and/or Worker’s
Compensation fee schedule(s), and then paid at 80%, pursuant to the . . .
policy . . . and Section 627.736, Florida Statutes.” Insurer did not dispute
the reasonableness of Sunrise’s fees, and Sunrise did not dispute the
policy terms. What Sunrise did object to was insurer’s reduction of the
reimbursement amount for chiropractic adjustments billed under CPT
code 98941 by what has become known as “the 2% issue.” Under
Medicare, for the years 2010 through 2014, chiropractic fees were to be
reduced for Medicare claims by two percent to recoup the cost of a study
conducted regarding chiropractic fees.

Insurer sought a summary disposition, and Sunrise objected. The
central issue before the court was the application of the two percent
reduction of the Medicare fee amount. Insurer sought to use the Medicare
CMS payment files, which included the two percent reduction, rather than
a calculation of the rate based upon the Medicare formula. The trial court
ruled in favor of insurer, prompting this appeal.

This issue has been addressed in federal district court. In a well-
reasoned opinion, Judge William P. Dimitrouleas held that under section
627.736 the insurer could not reduce payments by the two percent fee.
Coastal Wellness Ctrs., Inc. v. Progressive Am. Ins. Co., 309 F. Supp. 3d
1216, 1221 (S.D. Fla. 2018). We adopt his analysis as our own, which we
set forth herein:

This case presents a question of interpretation of the Florida
No–Fault (“PIP”) Statute, Fla. Stat. § 627.736 (2012 to date).

Fla. Stat. § 627.736 sets forth a basic coverage mandate which
requires every PIP insurer to reimburse 80% of reasonable
expenses for medical services. See Geico General Insurance
Co. v. Virtual Imaging Services, Inc., 141 So. 3d 147, 150 (Fla.
2013). There are two different methodologies permitted under
the statute for calculating reimbursements to satisfy the PIP
mandate: (1) the “reasonableness is a fact dependent inquiry”
methodology prescribed under Florida Statutes subsection §
[sic] 627.726(5)(a); and (2) the “schedule of maximum charges”
provided under Florida Statutes subsection 627.736(5)(a)1.

Plaintiff does not contest whether Defendant’s automobile
insurance policy properly elected the “schedule of maximum
charges.” The parties agree that Progressive is entitled to limit

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reimbursement for medical expenses based on the “schedule
of maximum charges” contained in Section (5)(a) of the PIP
Statute. See [sic] Fla. Stat. § 627.736(5)(a). Accordingly, this
case is about Defendant’s application of the “schedule of
maximum charges” to its reimbursements of claims submitted
by Plaintiff for chiropractic manipulative treatment services
billed under CPT code 98940.

The “schedule of maximum charges” limits payment for the
chiropractic services rendered by Plaintiff to “200 percent of
the allowable amount under” the “participating physicians fee
schedule of Medicare Part B.” See Fla. Stat. §
627.736(5)(a)1.f.(I). In turn, the Medicare Part B Physicians
Fee Schedule (the “Medicare Part B Physicians Fee Schedule”
or “PPFS–MPB”) prescribes the reimbursement rate for over
7,000 services performed by medical professionals, including
the chiropractic medical services that are the subject of this
case.

The reimbursement value for services under the PPFS–MPB
are calculated by multiplying (1) the relative value of a service;
(2) the conversion factor for the particular year; and (3) the
geographic adjustment factor applicable to the locality in
which the service was provided. See 42 U.S.C. § 1395w–
4(b)(1). Therefore, using simple arithmetic (addition and
multiplication), the reimbursement value for any service, in
any part of the United States, for any given year can be easily
ascertained by the Defendant using the Medicare Part B
Physicians Fee Schedule. The tables of values for the cost
factors are published each year in the annual Medicare
Physicians Fee Schedule Final Rule and are readily available
and easily accessible on the Centers for Medicare and
Medicaid (“CMS”) website.

The instant dispute arises from Progressive’s application of
the PPFS–MPB in effect in 2012–2014. During that timeframe,
a 2% reduction was imposed on chiropractic services paid for
by Medicare in order to recoup costs for a
study/demonstration conducted by Brandeis University to
evaluate the feasibility of expanding Medicare coverage for
certain chiropractic services. See 74 Federal Register 61926–
61928. The Medicare Prescription Drug, Improvement and
Modernization Act of 2003 (hereinafter “MMA”) required that
the study be “budget neutral;” therefore, the CMS Office of the

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Actuary (“OACT”) established a plan to recoup the outstanding
$50 million apportioned to CMS to fund the study by reducing
the payment by Medicare for chiropractic fee codes 98940,
98941 and 98942 by two percent (2%) commencing in
calendar year 2010 through calendar year 2014. Id. OACT
estimated that CMS would recoup $10 million per year from
2010 through 2014 by reducing CMS’ payment of Medicare
claims. Id.

The Department of Health and Human Services (“HHS”) made
it clear that the 2% reduction was only to be applied to
Medicare claims:

Consistent with the proposed rule, for this final rule
with comment period, we are reflecting this reduction
only in the payment files used by the Medicare
contractors to process Medicare claims rather than
through adjusting the RVUs. Avoiding an adjustment
to the RVUs would preserve the integrity of the PFS,
particularly since many private payers also base
payment on the RVUs.

74 Fed. Reg. 61927 (emphasis added); see also 78 Fed. Reg.
74790 (same). The Medicare Physician Fee Schedule (“PFS”)
Final Rule authored by HHS for each calendar year from 2010
through 2014 reflected in the Federal Register explicitly
reasserts the calendar year 2010 PFS policy establishing the
reductions for Medicare claims only. See 78 Fed. Reg. 74790–
74791.

Plaintiff asserts that the Defendant misinterpreted what is the
Medicare Part B Physicians Schedule and misapplied the CMS
Payment Files instead, which resulted in improper,
unauthorized reductions by 2% for each unit of a chiropractic
manipulation. The Court agrees. Notwithstanding that no
provisions of Fla. Stat. § 627.736(5)(a) 1 nor of the relevant
portions of the federal regulations permit private payers, such
as Defendant Progressive, to reduce payment to chiropractors
treating under chiropractic fee codes 98940, 98941 and
98942 by two percent (2%), Defendant did so during calendar
years 2012–2014, resulting in systematic underpayment of its
insured’s PIP chiropractic claims.

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 The Court rejects Defendant’s argument that it was permitted
to use the 2% fee reduction because those values were
calculated into the CMS payment files. Regardless of whether
it was easier for a private payer to use those values rather
than calculate the formula once a year, such reduction is
contradicted by the plain language of § 627.736(5)(a) 1, which
clearly allows an insurer to limit reimbursement to medical
care to the treating chiropractor to “200 percent of the
allowable amount under” the “participating physicians fee
schedule of Medicare Part B.” See Fla. Stat. §
627.736(5)(a)1.f.(I). “[W]hen the language of the statute is
clear and unambiguous and conveys a clear and definite
meaning, there is no occasion for resorting to the rules of
statutory interpretation and construction; the statute must be
given its plain and obvious meaning.” Holly v. Auld, 450 So.
2d 217, 219 (Fla. 1984). The Medicare Physician Fee
Schedule (“PFS”) does not include the two percent (2%)
reduction for CPT codes 98940, 98941 or 98942. To the
extent that Defendant relied upon the CMS Payment Files to
underpay chiropractic claims by 2%, such practice was
improper. Additionally, it runs contrary to the stated point of
applying the reduction to the payment files rather than the
RVU’s, so as to preserve the integrity of the RVU’s as they are
relied upon by many private payers, such as Defendant.

Based upon the foregoing, Defendant could not take
advantage of the 2% reduction which was incorporated into
the CMS Payment Files to allow Medicare to recoup the cost
of a study in order to reduce its payments to Plaintiff.

Id. at 1219–21 (footnotes omitted).

For the foregoing reasons, we reverse the judgment and remand for
further proceedings.

Reversed and remanded for further proceedings.

WARNER, DAMOORGIAN and FORST, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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