DWFII Corp. v. State Farm Mutual Automobile Insurance

271 F.R.D. 676, 2010 U.S. Dist. LEXIS 133676, 2010 WL 5094242
CourtDistrict Court, S.D. Florida
DecidedDecember 10, 2010
DocketNo. 10-20116-CIV
StatusPublished
Cited by7 cases

This text of 271 F.R.D. 676 (DWFII Corp. v. State Farm Mutual Automobile Insurance) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DWFII Corp. v. State Farm Mutual Automobile Insurance, 271 F.R.D. 676, 2010 U.S. Dist. LEXIS 133676, 2010 WL 5094242 (S.D. Fla. 2010).

Opinion

ORDER ON MOTION FOR CLASS CERTIFICATION

URSULA UNGARO, District Judge.

THIS CAUSE is before the Court upon Plaintiffs Motion for Class Certification, filed July 2, 2010 (the “Motion”) (D.E. 42.) Defendant responded on August 13, 2010 (the “Response”) (D.E. 62), and Plaintiff replied on August 30, 2010 (“Reply”) (D.E. 75.) Also before the Court is Plaintiffs Motion to Strike Defendant’s Opposition to Plaintiffs Motion for Class Certification, filed August 18, 2010 (D.E. 68), and Defendant’s Motion to Strike Plaintiffs Notice of Other Filing (D.E. 147.)

THE COURT has considered the Motions and the pertinent portions of the record and is otherwise fully advised in the premises.

I. Background

The issue in this ease is whether State Farm Mutual Automobile Insurance Company’s (State Farm) use of National Correcting Coding Initiative edits to limit providers’ reimbursements violates Florida’s No-Fault Law, Fla. Stat. § 627.736 (the “No-Fault Statute.”)

A. Parties

State Farm is an insurance carrier that sells No-Fault or Personal Injury Protection (“PIP”) coverage (Am.Compl. ¶¶ 6-7.) DWFII Corporation (“DWFII”) provides healthcare services to individuals covered under State Farm’s No-Fault policies and bills State Farm pursuant to assignments of benefits (Am.Compl. ¶¶ 10-11.)

B. Statutory Framework

Florida’s No-Fault Statute is designed to provide insurance without regard to fault. Fla. Stat. § 627.731 (2006). Every policy under the No-Fault Statute must provide up to $10,000 for loss sustained as a result of “bodily injury, sickness, disease, or death arising out of ownership, maintenance, or use of a motor vehicle____” Fla. Stat. § 627.736(1).

1. Type of Reimbursements Permitted

Subsection (l)(a) provides that insurers must reimburse eighty percent of all “reasonable expenses for medically necessary” healthcare services (emphasis added). Subsection (5) (a) states that a provider may reimburse “only reasonable amount[s]” and only those amounts that appear on an invoice, bill or claim form that has been “properly completed” (emphasis added). Subsection 5(d) provides guidelines an insured or her provider must follow in order to submit a properly completed bill.

Pursuant to subsection 4(b), “[pjersonal injury protection insurance benefits____

shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same____This paragraph does not preclude or limit the ability of the insurer to assert that the claim was unrelated, was not medically necessary, or was unreasonable or that the amount of the charge was in excess of that permitted under, or in violation of, subsection (5). Such assertion by the insurer may be made anytime, including after payment of the claim or after the 30-day time period for payment set forth in this paragraph.

Fla. Stat. § 627.736(4)(b) (emphasis added).

2. Permitted Limitations on Reimbursement Amounts

Pursuant to subsection (5)(a)(2), an insurer may limit reimbursement to 80% of “200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.” Subsection (5)(a)(3) adds that, for purposes of subparagraph (2), “the applicable fee schedule ... under Medicare is the fee schedule

in effect at the time the services, supplies, or care was rendered and for the area in [680]*680which such services were rendered, except that it may not be less than the allowable amount under the participating physicians schedule of Medicare Part B for 2007 for medical services, supplies, and care subject to Medicare Part B.

Fla. Stat. § 627.736(5)(a)(3). This means that the applicable fee schedule for maximum charges for the current year must be compared with the applicable schedule for 2007, and the insurer must pay the higher of the two.

Pursuant to subsection (5)(a)(4), a provider may not apply the following three limits on reimbursements:

limitation on the number of treatments ... [2] utilization limits that apply under Medicare or workers’ compensation. An insurer ... must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provider would be entitled to reimbursement under Medicare due to restrictions or [3] limitations on the types or discipline of health care providers who may be reimbursed for particular procedures or procedure codes.

Fla. Stat. § 627.736(5)(a)(4) (emphasis added).

Section 627.736(5)(b)(l)(e) further provides that “an insurer is not required to pay a claim or charge ... for any treatment that is upcoded, or that is unbundled when such treatment or services should be bundled ...” Unbundling is defined as “an action that submits a billing code that is properly billed under one billing code, but that has been separated into two or more billing codes, and would result in payment greater in amount than would be paid using one billing code.” Fla. Stat. § 627.732(15). However, under section 627.736(5)(b)(l)(e) when an insurer “change[s] codes that it determines to have been improperly or incorrectly upcoded or unbundled” and “make[s] payment based on the changed codes,” it must contact or make a “reasonable good faith effort” to “contact the provider and discuss the reasons for the insurer’s change and the health care provider’s reason for the coding.” See Fla. Stat. § 627.736(5)(b)(l)(e)

3. Actions Brought Under Florida’s No-Fault Statute

Pursuant to subsection 10(a), a condition precedent for filing any action for benefits under the No-Fault Statute is that “the insurer must be provided with written notice of an intent to initiate litigation.” See Fla. Stat. § 627.736(10)(a).

C. National Correct Coding Initiative Edits

The Centers for Medicare and Medicaid Services developed the National Correct Coding Initiative (NCCI).1 The NCCI’s goal is to “promote national correct coding methodologies and to control improper coding [of healthcare services] leading to inappropriate payment in [Medicare] Part B claims.”2 The purpose of NCCI edits is “to prevent improper payment when incorrect code combinations are reported.”3

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271 F.R.D. 676, 2010 U.S. Dist. LEXIS 133676, 2010 WL 5094242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dwfii-corp-v-state-farm-mutual-automobile-insurance-flsd-2010.