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

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

PROGRESSIVE SELECT INSURANCE COMPANY,
Appellant,

v.

DR. RAHAT FADERANI, DO, MPH, P.A.,
a/a/o ROBERSON PIERRE,
Appellee.

No. 4D21-232

[November 10, 2021]

Appeal from the County Court for the Seventeenth Judicial Circuit,
Broward County; Kathleen McCarthy, Judge; L.T. Case Nos. COCE 19-
1076 (51) and CACE 20-17509 (AP).

Michael C. Clarke of Kubicki Draper, P.A., Tampa, for appellant.

Kevin R. Jackson of the Law Offices of Kevin Jackson, P.A., Fort
Lauderdale, for appellee.

WARNER, J.

Progressive Insurance Company appeals a final summary judgment
finding that it had adjusted bills for PIP 1 claims improperly, resulting in
the underpayment of appellee, Dr. Faderani. The trial court also denied
Progressive’s motion for summary judgment. Progressive had reduced
appellee’s bills by using the National Correct Coding Initiative edits (NCCI),
a national initiative to promote correct coding of health care services
implemented by the Center for Medicaid and Medicare. Appellee
contended that such reduction was in bad faith based upon SOCC, P.L. v.
State Farm Mutual Automobile Insurance Co., 95 So. 3d 903 (Fla. 5th DCA
2012), which held that the edits were not permitted under a prior version
of section 627.736(5)(a)3., Florida Statutes. The statute was amended
after SOCC to allow insurance companies to use “Medicare coding policies
and payment methodologies” in its reimbursement decisions, so long as
those policies and modifications “do[] not constitute a utilization limit.”

1 PIP stands for personal injury protection benefits contained in automobile
insurance policies. See § 627.736, Fla. Stat.
Because the use of Medicare coding policies was authorized by the
amended statute, and Progressive had exhausted the PIP benefits prior to
the filing of this suit, the trial court erred in granting summary judgment
to appellee and denying Progressive’s motion for summary judgment. We
reverse.

Progressive’s insured was injured in an auto accident. Insured’s policy
included $10,000 in PIP benefits subject to a $1,000 deductible. Insured
was treated and seen by multiple providers. Prior to seeking treatment
from appellee, insured obtained treatment from United Health and Rehab
Center, which submitted two claims to Progressive. Progressive adjusted
those claims, reducing payment based upon NCCI edits, explaining that
according to “the National Correct Coding Edits [NCCI], this procedure
code is not separately reimbursable with this chiropractic manipulative
treatment code (98940-98942) with modifier exceptions.” This resulted in
a reduced calculation of the amount owed to United Health, and that
reduced amount was then applied to meet the deductible. Progressive
applied appellee’s bill to the deductible, resulting in no payment to
appellee until appellee sent a pre-suit demand letter. Progressive paid an
additional amount in response to the demand letter, and then Progressive
exhausted its PIP coverage through payment to other providers.

After benefits were exhausted, appellee sued Progressive for breach of
contract based on an assignment of benefits and provider’s lien from
Progressive’s insured. Appellee alleged that Progressive “improperly
reduced some of [insured’s] bills before applying them to the subject
policy’s deductible, resulting in a reduced payment being made to
[appellee].” It did not allege that Progressive acted in bad faith. Progressive
answered and alleged affirmative defenses including that the PIP benefits
were exhausted, estopping appellee from seeking further payment.

Appellee moved for summary judgment, claiming that Progressive had
improperly exhausted PIP benefits, and had acted in bad faith by using
the NCCI edits to calculate the reimbursable amount on United Health’s
bill. Progressive had failed to follow SOCC, which appellee claimed held
that NCCI edits could not be used to adjust a PIP claim, because the edits
were utilization limits. If the NCCI edits had not been used, the deductible
would have been applied differently, resulting in PIP coverage to reimburse
appellee when its bill was presented.

Progressive also filed a motion for summary judgment, claiming it was
entitled to judgment based on its exhaustion of the claimant’s PIP benefits
pre-suit. Progressive had paid out the statutory policy limits of the
claimant’s PIP benefits. It could not be required to pay in excess of the

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claimant’s PIP benefits in the absence of bad faith, and there was no basis
for a bad faith allegation.

At the hearing on the motions, appellee relied on SOCC to claim that
Progressive improperly used the NCCI edits. Progressive argued that
SOCC was not binding, because the statute was amended to allow the use
of Medicare coding methodologies. Thus, it could not be liable for bad
faith. The court granted appellee’s motion and denied Progressive’s
motion. It then entered final summary judgment for benefits to appellee
in the amount of $116.55 plus interest and entitlement to reasonable
attorney’s fees and costs. After a motion for rehearing was denied,
Progressive filed this appeal.

The standard of review of an order granting summary judgment is de
novo. Restoration Constr., LLC v. SafePoint Ins. Co., 308 So. 3d 649, 651
(Fla. 4th DCA 2020). The standard of review of interpretation of the Florida
No-Fault (PIP) Statute, section 627.736, Florida Statutes, is also de novo.
Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So. 3d 147, 152 (Fla.
2013).

Progressive argues that PIP benefits under the policy were exhausted
before appellee filed suit, and it could not be compelled to pay benefits to
appellee. In Northwoods Sports Medicine & Physical Rehabilitation, Inc. v.
State Farm Mutual Automobile Insurance Co., 137 So. 3d 1049 (Fla. 4th
DCA 2014), we held “[o]nce the PIP benefits are exhausted through the
payment of valid claims, an insurer has no further liability on unresolved,
pending claims, absent bad faith in the handling of the claim by the
insurance company.” Id. at 1057 (emphasis added); see also GEICO Indem.
Co. v. Gables Ins. Recovery, Inc., 159 So. 3d 151 (Fla. 3d DCA 2014).

As Progressive notes, appellee did not make a claim of “bad faith” in his
Statement of Claim. Progressive alleged as an affirmative defense that the
PIP benefits had been exhausted by payments to other providers. Bad
faith would be considered an avoidance of Progressive’s affirmative defense
of exhaustion, but appellee did not file a reply. Instead, appellee points to
his allegation that Progressive made “improper payments” in his claim as
satisfying the exception to the exhaustion of benefits defense.

Some cases support the appellee’s contention that when payments have
been improperly made and PIP benefits exhausted prior to payment to the
unpaid provider, the unpaid provider may be entitled to relief. In Coral
Imaging Services v. Geico Indemnity Insurance Co., 955 So. 2d 11 (Fla. 3d
DCA 2006), on second tier certiorari review, the Third District found
summary judgment for the plaintiff provider was correct where Geico had

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improperly paid two other untimely claims submitted by a different
provider and exhausted benefits before addressing the plaintiff provider’s
timely claim. However, the Third District later limited Coral Imaging to
apply only to the payment of untimely claims. Gables Ins. Recovery, 159
So. 3d at 155. And in Allstate Fire & Casualty Insurance Co. v. Jeffrey L.
Katzell, M.D., P.A., 323 So. 3d 191 (Fla 4th DCA 2021), we considered a
case in a similar posture, albeit on a concession of error by the provider,
where the provider sued Allstate for benefits alleging that it had made
statutorily improper payments to other providers which exhausted the PIP
benefits before the provider’s claim. In that case, we ultimately determined
that the payments had been properly made. We did not address directly
whether improper payments by the insurer, absent an allegation of bad
faith in a reply, were sufficient to overcome the exhaustion of benefits
defense.

Were we to write on a clean slate, and except for untimely payments,2
we would hold that an insurance company’s “improper” payments to
another provider do not constitute bad faith sufficient to overcome the
insurance company’s exhaustion of benefits defense to a provider who
sues for payment after the policy limits have been exhausted. In
Northwoods, we allowed bad faith “in the handling of the claim by the
insurance company” to overcome the defense. 137 So. 3d at 1057. We
construe that to mean bad faith in the handling of the claim at issue, not
a claim by a third party, particularly where there is no evidence that the
third party contested how the insurance company handled that party’s
claim. In other words, the conduct of the insurance company must be
directed at the provider attempting to avoid the exhaustion of benefits
claim. Nevertheless, because of the foregoing cases, we conclude that we
must address whether Progressive overcame the bad faith or improper
payments claim of appellee.

We conclude that the court erred in granting summary judgment on
the basis that Progressive’s use of the NCCI edits were improper and in
bad faith. Appellee argued that they were improper based upon SOCC.
We reject the application of SOCC to this case, as it was decided under an

2 Where a provider makes an untimely submission of a bill to the insurer, the
insured is not liable for any payment to the provider. See § 627.736(5)(c), Fla.
Stat. The insured’s lack of liability for untimely bills was the reason that the
Coral Imaging court held that untimely payments to other providers which
exhausted benefits would result in an exception to the exhaustion of benefits rule
where a timely submitted payment was then not reimbursed. The insured would
be liable for any portion of a timely submitted bill.

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earlier version of section 627.736(5)((a)3., Florida Statutes (2018). 3 In that
case, the court answered a certified question from the county court: “Are
the National Correct Coding Initiative comprehensive edits database (NCCI
edits) incorporated into the Florida No–Fault (PIP) statutes[?]” 95 So. 3d
at 905 (emphases omitted). In SOCC, a provider contested the insurance
company’s bundling of services on its bill using NCCI edits. State Farm
contended it could bundle the services based upon the Center for Medicare
methodologies. After reviewing the statute, the court held that the statute
did not incorporate the NCCI edits in its terms, concluding that the
statutory language prohibited the insurance company from treating a PIP
claim the same as a Medicare claim. Id. at 910. The case did not hold
that NCCI edits were an improper utilization limit.

Subsequent to SOCC, the Legislature amended section 627.736(5)(a)4.
in 2012 to include the use of Medicare coding methodologies. The
renumbered statute, section 627.736(5)(a)3., applicable here provides:

Subparagraph 1. does not allow the insurer to apply any
limitation on the number of treatments or other utilization
limits that apply under Medicare or workers’ compensation.
An insurer that applies the allowable payment limitations of
subparagraph 1. must reimburse a provider who lawfully
provided care or treatment under the scope of his or her
license, regardless of whether such provider is entitled to
reimbursement under Medicare due to restrictions or
limitations on the types or discipline of health care providers
who may be reimbursed for particular procedures or
procedure codes. However, subparagraph 1. does not prohibit
an insurer from using the Medicare coding policies and
payment methodologies of the federal Centers for Medicare and
Medicaid Services, including applicable modifiers, to determine
the appropriate amount of reimbursement for medical services,
supplies, or care if the coding policy or payment methodology
does not constitute a utilization limit.

§ 627.736(5)(a)3., Fla. Stat. (2018) (emphasis added). Thus, the statute
now allows the use of Medicare coding in reimbursement decisions.

We recently considered this statutory language and determined that an
insurance company could use the Medicare Multiple Procedure Payment
Reduction (“MPPR”) coding to limit PIP provider reimbursements as it was

3SOCC was decided based on section 627.736(5)(a)4., Florida Statutes (2008).
95 So. 3d at 905 n.2.

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an authorized payment methodology, not an improper utilization limit.
State Farm Mut. Auto. Ins. Co. v. Pan Am Diagnostic Servs., Inc., 321 So. 3d
807 (Fla. 4th DCA 2021). We concluded that the MPPR did not limit the
number of services a patient may access. It simply limited the
reimbursement for them. Quoting from a county court analysis, we noted:

A determination of a reasonable charge for provider services,
however, does not mean, a fortiori, that such limitation on
reimbursement deprives a patient of necessary treatment or
precludes a health care provider from utilizing necessary and
reasonable care. If that were the Legislature’s purpose in its
latest iteration of the PIP Statute, then no coding policies or
payment methodology would be permissible.

Id. at 810. A utilization limit is patient-oriented, preventing the patient
from treatment. It is not provider-directed to expand what codes can be
billed for services to the patient.

Other provisions of the PIP statute also allow for coding policies
regarding bundling of services. The statute requires that providers use
Centers for Medicare and Medicaid Services forms for submitting claims.
See § 627.736(5)(d), Fla. Stat. (2018). An insurer is not required to pay a
claim or charge “[f]or any treatment or service that is upcoded, or that is
unbundled when such treatment or services should be bundled, in
accordance with paragraph (d).” § 627.736(5)(b)1.e., Fla. Stat. (2018).
Thus, the Legislature clearly contemplated that the insurer could consider
coding policies involving bundling of services. A review of the NCCI policy
manual for Medicare reveals the purpose of the NCCI policies. “The CMS
developed the National Correct Coding Initiative (NCCI) program to prevent
inappropriate payment of services that should not be reported together.”
Centers for Medicare & Medicaid Services, U.S. Dep’t of Health & Human
Services: NCCI Policy Manual for Medicare, Ch. I-4 General Correct Coding
Policies, (October 2021) (“NCCI Policy Manual”), https://www.cms.gov/
files/document/chapter1generalcorrectcodingpoliciesfinal112021.pdf.

The purpose of the NCCI PTP (Procedure to Procedure) edits is to
prevent improper payment when incorrect code combinations are reported.
The NCCI contains one table of edits for physicians/practitioners and one
table of edits for outpatient hospital services. The purpose of the NCCI
MUE (Medically Unlikely Edits) program is to prevent improper payments
when services are reported with incorrect units of service. Centers for
Medicare & Medicaid Services, National Correct Coding Initiative,
https://www.cms.gov/Medicare/Coding/PTP-Coding-Edits?redirect. In
other words, the NCCI is a coding policy and payment methodology, not a

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utilization limit. The edits do not prohibit services to the patient; they
simply require that those services be bundled together for payment, where
appropriate, when the service is comprehensive involving multiple coded
procedures. For example:

A physician shall not report multiple HCPCS/CPT codes when
a single comprehensive HCPCS/CPT code describes these
services . . . .

A physician shall not fragment a procedure into component
parts . . . .

A physician shall not unbundle a bilateral procedure code into
2 unilateral procedure codes . . . .

A physician shall not unbundle services that are integral to a
more comprehensive procedure[.]

NCCI Policy Manual, Chapter I-6–7, https://www.cms.gov/files/
document/chapter1generalcorrectcodingpoliciesfinal112021.pdf.

Similarly, section 627.736(5)(b)1.e., Florida Statutes, specifically
authorizes an insurance company not to pay for unbundled services.
These coding policies are also similar to the MPPR, which we held were not
utilization limits in State Farm Mut. Auto. Ins. Co. v. Stand Up MRI of Boca
Raton, P.A., 322 So. 3d 87, 89 (Fla. 4th DCA 2021); accord Progressive Am.
Ins. Co. v. Head To Toe Posture Rehab, LLC, --- So. 3d ----, 2021 WL
4561377 (Fla. 4th DCA October 6, 2021).

Thus, we agree with Progressive that the NCCI edits are not utilization
limits. Rather, the edits are Medicare coding policies and payment
methodologies allowed by section 627.736(5)(a)3. in the reimbursement of
PIP claims. Progressive properly used the edits in determining
reimbursement.

Because the use of NCCI edits comports with the statute, Progressive
did not make improper payments or act in bad faith in using the edits to
reduce the bill of the third-party provider. As it is undisputed that
Progressive exhausted insured’s PIP benefits by the proper payment of
claims prior to this lawsuit, Progressive is not liable for payment in excess
of the policy limits. The trial court erred in granting summary judgment
for appellee and denying Progressive’s motion for summary judgment. We
thus reverse and remand for entry of a judgment in favor of Progressive.

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 Reversed.

LEVINE and KLINGENSMITH, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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