STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
MACY’S CLAIMS SERVICES AND | ) | |
QMEDTRIX SYSTEMS, INC., | ) ) | |
Petitioners, | ) | |
) | ||
vs. | ) | Case Nos. 09-6871 |
DEPARTMENT OF FINANCIAL | ) ) | 09-6872 |
SERVICES, DIVISION OF | ) | |
WORKERS’ COMPENSATION, | ) | |
) | ||
Respondent, | ) | |
) | ||
and | ) ) | |
FLORIDA HOSPITAL ORLANDO, | ) ) | |
Intervenor. | ) | |
) |
RECOMMENDED ORDER
An administrative hearing was conducted in this case on February 22, 2010, in Tallahassee, Florida, before
James H. Peterson, III, Administrative Law Judge with the Division of Administrative Hearings.
APPEARANCES
For Petitioners: Cindy R. Galen, Esquire
Eraclides, Johns, Hall, Gelman, Eikner & Johannessen, L.L.P.
2030 Bee Ridge Road Sarasota, Florida 34239
For Respondent: Mari H. McCully, Esquire
Department of Financial Services Division of Workers’ Compensation
200 East Gaines Street Tallahassee, Florida 32399-4229
For Intervenor: John D. Buchanan, Esquire
Henry, Buchanan, Hudson, Suber & Carter, P.A. Post Office Box 14079
Tallahassee, Florida 32317 STATEMENT OF THE ISSUES
Whether Florida Hospital Medical Center is entitled to reimbursement in the amount preliminarily determined by the Department of Financial Services, Division of Workers’ Compensation, in a reimbursement dispute regarding bills submitted by Florida Hospital Medical Center to Macy’s Claims Services and Amerisure Mutual Insurance Company for medical services provided to two individuals involved in work-related accidents; and
Whether Macy’s Claims Services and Amerisure Mutual Insurance Company properly adjusted those bills of Florida Hospital Medical Center in accordance with the requirements of Florida’s Workers’ Compensation law and applicable rules.
PRELIMINARY STATEMENT
These consolidated cases involve challenges by Macy’s Claims Services (Macy’s) and Amerisure Mutual Insurance Company (Amerisure) to Workers’ Compensation Medical Services Reimbursement Dispute Determinations (Dispute Determinations)
issued by Respondent (the Department), pursuant to Section 440.123(7), Florida Statutes (2009)1/. The Dispute Determinations were rendered by the Department after Florida Hospital Medical Center (Florida Hospital), which has facilities located in Orlando (Florida Hospital Orlando) and in Winter Park (Florida Hospital Winter Park) challenged adjustments made to its medical bills by Macy’s and Amerisure. The medical bills were for un-scheduled (emergency) treatment, care and attendance at Florida Hospital rendered in May, 2009, to two employees/claimants — one for Macy’s (patient “R. P.”) and one for Amerisure (patient “J. L.”) — injured in work-related accidents.
Qmedtrix Systems, Inc. (Qmedtrix), reviewed the medical bills on behalf of Macy’s and Amerisure and made recommendations for a reduction in payment based upon its determination that Florida Hospital had made billing errors. Thereafter, Macy’s and Amerisure paid Florida Hospital a reduced amount and issued Explanations of Bill Review (EOBRs) pursuant to Florida Administrative Code Rule 69L-7.602(5)(q) (2007),2/ setting forth their reasons for adjustments to the bills. Dissatisfied with the adjustments, Florida Hospital timely petitioned the Department (Reimbursement Dispute Petitions) to resolve the reimbursement dispute pursuant to Section 440.13(7)(a), Florida Statutes.
The Dispute Determinations rendered by the Department found that the bill adjustments were improper and directed Macy’s and Amerisure to reimburse Florida Hospital an additional amount as to each bill, in accordance with the medical fee schedules (or maximum reimbursement allowances) established pursuant to Section 440.13(12), Florida Statutes, and Florida Administrative Code Rule 69L-7.501. Both Macy’s and Amerisure timely filed petitions for administrative hearings on the Dispute Determinations pursuant to Sections 120.569 and 120.57(1), Florida Statutes, and the petitions were forwarded to the Division of Administrative Hearings (DOAH), where they were assigned DOAH Case numbers 09-6871 and 09-6872, respectively, and then consolidated for the purposes of determining the rights and duties of the substantially affected parties.
After the Notice of Hearing was entered scheduling the final hearing in this matter, Florida Hospital filed a Motion to Intervene as a substantially affected party who, because of communication errors, received late notice of the proceeding.
The Motion was granted by Order dated February 16, 2010, allowing Florida Hospital to intervene as a party.
At the final hearing held on February 22, 2010, six joint exhibits were received into evidence as Exhibits “J-1” through “J-6.” Macy’s and Amerisure (collectively, Petitioners) presented the testimony of one witness, R. W. von Sydow, who is
employed by Qmedtrix, and offered twelve exhibits, eleven of which were received into evidence as Exhibits “P-1” through “P- 8,” and “P-10” through “P-12.” Although offered, Petitioner’s proposed Exhibit “P-9” was not received into evidence. The Department presented the testimony of one witness, Arlene Cotton, R.N., an employee of the Department who drafted the Dispute Determinations. The Department offered five exhibits, four of which were received into evidence as “R-1” through
“R-3” and “R-5.” Respondent’s proposed Exhibit “R-4” was not received into evidence. Florida Hospital offered one exhibit which was received into evidence as “I-1.”
The live portion of the hearing ended on February 22, 2010.
The evidentiary portion of the hearing, however, was held open until March 22, 2010, for the taking of depositions and filing of deposition transcripts of three witnesses for Florida Hospital, including: Ross Edmunson, M.D., who is vice-president and director of hospital management at Florida Hospital; James English, the director of revenue management at Florida Hospital; and Steve Dudley, an outside CPA for Florida Hospital. The deposition transcripts for Dr. Edmunson and Mr. English were filed on March 19, 2010. The deposition transcript for Steve Dudley was filed on March 23, 2010. Although one day late, as there was no objection and there is no evidence of prejudice, the deposition testimony of Mr. Dudley was considered as
testimonial evidence in this proceeding, as were the deposition testimonies of Dr. Edmunson and Mr. English.
The proceedings were recorded and a transcript was ordered. The two-volume Transcript was filed March 23, 2010. The parties were given until April 22, 2010, to file their respective Proposed Recommended Orders. The parties timely filed their respective Proposed Recommended Orders, which were considered during the preparation of this Recommended Order.
FINDINGS OF FACT
Florida Hospital is a full-service, not-for-profit hospital system located in Orlando, Florida, that operates a smaller satellite hospital in Winter Park, Florida. Florida Hospital is a “health care provider” within the meaning of Section 440.13(1)(h), Florida Statutes.
Macy’s and Amerisure are “carriers” within the meaning of Sections 440.02(4) and 440.02(38), Florida Statutes.
The Department has exclusive jurisdiction to resolve disputes between carriers and health care providers regarding payments for services rendered to injured workers, pursuant to Sections 440.13(7) and 440.13(11)(c), Florida Statutes.
Qmedtrix is a medical bill review company.3/ Case No. 09-6871
R. P., an employee of Macy’s, slipped and fell at work on May 20, 2009, and presented to Florida Hospital Winter Park
for evaluation and treatment where medical personnel documented vomiting, brain attack, and brain trauma. After evaluation and treatment, patient R. P. was diagnosed with a bruise to the head and released the same day.
On September 16, 2009, Florida Hospital submitted its bill for services provided to R. P. totaling $5,547.20 to Macy’s for payment, utilizing Form DFS-F5-DWC-90, also known as UB-04 CMS-1450, identifying the charges billed for each line item by revenue code and HCPS or CPT codes.
Macy’s forwarded the bill to its workers’ compensation medical bill review agent, Qmedtrix.
Qmedtrix reviewed the bill by comparing the procedure codes and diagnosis codes reported by Florida Hospital with examples in the CPT book for billing of emergency department services.
Florida Hospital reported ICD diagnosis code 920, which reads “contusion of face, scalp, or neck.” Use of this code means R. P. presented with a bruise or hematoma, but not a concussion. Florida Hospital also reported ICD diagnosis code
959.01 (“head injury, unspecified”) which also means that R. P. did not present with a concussion, loss of consciousness, or intracranial injuries.
Florida Hospital’s bill included a charge of $2,417 with CPT code 99285 for emergency department services. The bill also included separate charges for a head CT, and various lab tests, drugs, and IV solutions.
According to Mr. von Sydow, the bill was sent through Qmedtrix’s computer program for review, and was flagged for review by a physician. Mr. von Sydow further testified that one of Qmedtrix’s medical director’s suggested that the CPT code of 99285 be reduced. The medical director, who Mr. von Sydow said reviewed the bill, however, did not testify and no documentation of his recommendation was submitted at the final hearing. Qmedtrix determined that Florida Hospital should have used CPT code 99284 when billing for the emergency services rendered instead of CPT code 99285. Qmedtrix found that, while the hospital billed $2,417 with CPT code 99285, its usual charge for an emergency department visit billed with CPT code 99284 is
$1,354.
Macy’s paid Florida Hospital a total of $2,683.55, which amount included $1,010.24 for the emergency department visit based on [approximately] 75 percent of Florida Hospital’s usual charge for CPT code 99284. The payment was accompanied by an EOBR.
The EOBR Macy’s (or its designated entity)4/ issued to Florida Hospital for services rendered to R. P. identifies the amount billed by Florida Hospital as to each line item in a column designated “Billed,” and has columns designated as “BR Red,” “PPO Red,” “Other Red,” and “Allowance,” each containing an amount for each line item in the “Billed” column. There is also a column entitled “Reason Code” which sets forth codes, as required by Florida Administrative Code Rule 69L-7.602(5)(o)3., that are supposed to explain the reason for adjustment of any line item.5/ The “reason code” set forth adjacent to the
$2,417.00 billed by Florida Hospital for emergency department services is “82,” which means “Payment adjusted: payment modified pursuant to carrier charge analysis.” There is also another code, “P506” listed in the “Reason Code” column adjacent to the same line item, which, according to the key provided on the EOBR, means “[a]ny questions regarding this Qmedtrix review, please call (800)-833-1993.” “P506,” however, is not a “reason code” listed in Florida Administrative Code Rule 68L- 7.602(5)(o)3.
The EOBR does not advise that the bill was adjusted because of a determination that Florida Hospital should have used CPT code 99284 when billing for the emergency services rendered instead of CPT code 99285 as originally billed.
Upon receipt of the payment and the EOBR, Florida Hospital timely filed a Petition for Resolution of Reimbursement Dispute with the Department pursuant to Section 440.13(7)(a), Florida Statutes, and Florida Administrative Rule 69L-31, contending that payment should be at 75 percent of its total charges, and citing the Florida Workers’ Compensation Reimbursement Manual for Hospitals, 2006 Edition (Hospital Manual).
Qmedtrix timely filed a response to Florida Hospital’s petition on behalf of Macy’s pursuant to Section 440.13(7)(b), Florida Statutes, and Florida Administrative Code Rule 69L-31, asserting that correct payment should be determined based on, first, whether the hospital in fact billed its usual charge for the services and, second, whether the hospital’s charges are in line with the charges of other hospitals in the same community, citing One Beacon Insurance v. Agency for Health Care Administration, 958 So. 2d 1127 (Fla. 1st DCA 2007) for the proposition that “SB-50 amended section 440.13 . . . [revealing] legislative intent to eliminate calculation of a “usual and customary charge” based on the fees of any one provider in favor of a calculation based on average fees of all providers in a given geographic area.”
Qmedtrix’s response on behalf of Macy’s also contended that “upcoding” and “unbundling” were additional grounds for
adjustment or disallowance that were not identified on the EOBR. The response explained that “upcoding” refers to billing with a procedure code that exaggerates the complexity of the service actually provided; that CPT codes 99281 through 99285 describe emergency department services; that the CPT book includes examples of proper billing with these codes; that the hospital billed $2,417 with CPT code 99285; and that the CPT book describes an “emergency department visit for a healthy, young adult patient who sustained a blunt head injury with local swelling and bruising without subsequent confusion, loss of consciousness or memory deficit” as an example of proper billing with CPT code 99283. The response requested a determination by the Department that Macy’s payment equaled or exceeded the amount usual and customary for CPT code 99283.
On November 13, 2009, the Department, through its Office of Medical Services (OMS) issued a determination (Determination in 09-6871) which found, in pertinent part:
The petitioner asserts that services provided by Florida Hospital Medical Center to the above-referenced injured employee on May 20, 2009, were incorrectly reimbursed. Florida Hospital Medical Center billed
$5,547.20 and the carrier reimbursed
$2,683.55. The petition does not address a contract and does not reflect a contract discount in the calculation of requested reimbursement.
The Carrier Response to Petition for Resolution of Reimbursement Dispute disputes
the reasonableness of the hospital’s “usual and customary charges”, maintains the petitioners’ charges should be based on the average fee of other hospitals in the same geographic area, references a manual not incorporated by rule, and provides CPT codes that the respondent alleges are correct.
There are no rules or regulations within Florida’s Workers’ Compensation program prohibiting a provider from separately billing for individual revenue codes. The carrier did not dispute that the charges listed on the Form DFS-F5-DWC-90 (UB-92) or the charges listed on the itemized statement did not conform to the hospital’s Charge Master. Nor did the carrier submit the hospital’s Charge Master in the response or assert that the carrier performed an audit of the Charge Master to verify the accuracy of the billed charges. Therefore, since no evidence was presented to dispute the accuracy of the Form DFS-F5-DWC-90 or the itemized statement as not being representative of the Charge Master, the OMS finds that the charges billed by the hospital are the hospital’s usual and customary charges.
Rule 69L-7.602, F.A.C., stipulates the appropriate EOBR codes that must be utilized when explaining to the provider the carrier’s reasons for disallowance or adjustment. The EOBR submitted with the petition conforms to the EOBR code requirements of Rule 69L-7.602(5)(q), F.A.C. Only through an EOBR is the carrier to communicate to the health care provider the carrier’s reasons for disallowance or adjustment of the provider’s bill.
Pursuant to s. 440.13(12), F.S., a three member panel was established to determine statewide reimbursement allowances for treatment and care of injured workers. Rule 69L-7.501, F.A.C., incorporates, by reference, the applicable reimbursement schedule created by the panel. Section
440.13(7)(c), F.S., requires the OMS to utilize this schedule in rendering its determination for this reimbursement dispute. No established authority exists to permit alternative schedules or other methodologies to be utilized for hospital reimbursement other than those adopted by Rule 69L-7.501, F.A.C., unless the provider and the carrier have entered into a mutually agreeable contract.
Rule 69L-7.501, F.A.C., incorporates, by reference, the Florida Workers’ Compensation Reimbursement Manual for Hospitals, 2006 Edition (Hospital Manual).
Since the carrier failed to indicate any of the services are not medically necessary, the OMS determined proper reimbursement applying the above referenced reimbursement guidelines. Therefore, the OMS has determined that the carrier improperly adjusted reimbursement to Florida Medical Center for services rendered to the above- referenced injured employee on May 20, 2009. Based on the above analysis, the OMS has determined that correct reimbursement equals
$4,160.40 ($5,547.20 x 75% [Hospital Manual]=$4,160.40).
The carrier shall reimburse Florida Hospital Medical Center $4,160.40 for services rendered to the above-referenced employee; and submit proof of reimbursement of the amount determined by the OMS within thirty
days of the date the Determination is received. . . .
The difference between what Petitioner Macy’s paid Florida Hospital for services rendered to R. P., and the amount the Department determined that Petitioner Macy’s is required to pay for such services, equals $1,476.85.
The Determination in 09-6871 did not directly address Macy’s allegation of the alleged billing error of “upcoding.”
The Determination in 09-6871 provided a 21-day notice for request of an administrative hearing and, as noted in the Preliminary Statement above, Macy’s timely requested a hearing. Case No. 09-6872
J. L., an employee of Major League Aluminum, was injured in a work-related accident on the evening of May 3, 2009, and visited the emergency department of Florida Hospital Orlando. After evaluation and treatment, J. L. was diagnosed with a bruise to the knee and released the next morning.
On September 23, 2009, Florida Hospital submitted its bill for services provided to J. L. totaling $2,851 to Amerisure, Major League Aluminum’s workers’ compensation insurer, for payment, utilizing Form DFS-F5-DWC-90, also known as UB-04 CMS-1450, identifying the charges billed for each line item by revenue code and HCPS or CPT codes.
Amerisure forwarded the hospital bill to its medical bill review agent, Qmedtrix for review. Qmedtrix’s medical bill review in this case, as in the companion case, entailed comparing the procedure codes and diagnosis codes reported by the hospital with examples in the CPT book.
The hospital reported ICD diagnosis code 924.11, which reads “contusion of . . . knee.” The hospital also reported ICD diagnosis codes 724.2 (“lumbago”), E888.1 (“fall on or from ladders or scaffolding”) and 959.7 (“injury, other and unspecified . . . knee, leg, ankle, and foot.”).
Florida Hospital billed $1,354 with CPT code 9924 for emergency department services and also billed for X-rays and various drugs and IV solutions. Comparing procedure codes and diagnosis codes reported by the hospital with examples in the CPT book, Qmedtrix concluded that billing with CPT code 99284 was not appropriate, but that billing with CPT code 99282 was.
Qmedtrix also found that, while the hospital billed
$1,354 with CPT code 99284, the average charge in the community for a visit to the emergency department billed with CPT code 99282 is $721.
Qmedtrix determined the “usual and customary charge” in the community from its own database compiled by entering all of particular hospital bills into Qmedtrix’s database, along with data from the American Hospital Directory. Qmedtrix derives the average charge in the community based upon zip codes of the hospitals.
Amerisure paid Florida Hospital a total of $1,257.15, which amount included $524.70 for the emergency department visit codes based on 75 percent of what Qmedtrix determined to be the
average charge in the community for CPT code 99282. The payment was accompanied by an EOBR.
The EOBR Petitioner Amerisure (or its designated entity)6/ issued to Florida Hospital for services rendered to
J. L. identifies the amount billed by Florida Hospital as to each line item in a column designated “Billed Charges,” and has columns designated as “FS/UCR Reductions,” “Audit Reductions,” “Network Reductions,” and “Allowance,” each containing an amount for each line item in the “Billed Charges” column. There is also a column entitled “Qualify Code” which sets forth reason codes that are supposed to explain the reason for adjustment of any line item.7/ The code set forth adjacent to the $1,354.00 billed by Florida Hospital for emergency department services is “82,” which means “Payment adjusted: payment modified pursuant to carrier charge analysis.”
The EOBR does not advise that the bill was adjusted because of a determination that Florida Hospital should have used CPT code 99282 when billing for the emergency services rendered instead of CPT code 99284 as originally billed.
Upon receipt of the payment and the EOBR, Florida Hospital timely filed a Petition for Resolution of Reimbursement Dispute with the Department pursuant to Section 440.13(7)(a), Florida Statutes, and Florida Administrative Code Rule 69L-31,
contending that payment should be at 75 percent of its total charges, and citing the Hospital Manual.
Qmedtrix timely filed a response to Florida Hospital’s petition on behalf of Amerisure pursuant to Section 440.13(7)(b), Florida Statutes, and Florida Administrative Code Rule 69L-31, asserting that correct payment should be determined based on, first, whether the hospital, in fact, billed its usual charge for the services and, second, whether the hospital’s charges are in line with the charges of other hospitals in the same community, citing One Beacon, supra.
Qmedtrix’s response on behalf of Amerisure contended “upcoding” as an additional ground for adjustment or disallowance that was not identified on the EOBR. As in the companion case, the response explained “upcoding,” that CPT codes 99281 through 99285 describe emergency department services, and that the CPT book includes examples of proper billing with these codes. The response further stated that the hospital billed $1,354 with CPT code 99284, and that the CPT book describes an “emergency department visit for a patient with a minor traumatic injury of an extremity with localized pain, swelling, and bruising” as an example of proper billing with CPT code 99282. The response requested a determination by the Department that Amerisure’s payment equaled or exceeded the usual and customary charge for CPT code 99282.
On October 20, 2009, the Department’s OMS issued a determination (Determination in 09-6872) which found, in pertinent part:
The petitioner asserts that services provided by Florida Hospital Medical Center to the above-referenced injured employee on May 3, 2009, and May 4, 2009, were incorrectly reimbursed. Florida Hospital Medical Center billed $2,851.00 and the carrier reimbursed $1,257.15. The petition does not address a contract and does not reflect a contract discount in the calculation of requested reimbursement.
The Carrier Response to Petition for Resolution of Reimbursement Dispute disputes the reasonableness of the hospital’s “usual and customary charges”, maintains the petitioners’ charges should be based on the average fee of other hospitals in the same geographic area, and references a manual not incorporated by rule. There are no rules or regulations within Florida’s Workers’ Compensation program prohibiting a provider from separately billing for individual revenue codes. Therefore, the charges, as billed by the hospital, did not constitute billing errors. The carrier did not dispute that the charges listed on the Form DFS-F5- DWC-90 (UB-92) or the charges listed on the itemized statement did not conform to the hospital’s Charge Master. Nor did the carrier submit the hospital’s Charge Master in the response or assert that the carrier performed an audit of the Charge Master to verify the accuracy of the billed charges.
Therefore, since no evidence was presented to dispute the accuracy of the Form DFS-F5- DWC-90 or the itemized statement as not being representative of the Charge Master, the OMS finds that the charges billed by the hospital are the hospital’s usual and customary charges.
Rule 69L-7.602, F.A.C., stipulates the appropriate EOBR codes that must be utilized when explaining to the provider the carrier’s reasons for disallowance or adjustment. The EOBR submitted with the petition conforms to the EOBR code requirements of Rule 69L-7.602(5)(q), F.A.C. Only through an EOBR is the carrier to communicate to the health care provider the carrier’s reasons for disallowance or adjustment of the provider’s bill.
Pursuant to s. 440.13(12), F.S., a three member panel was established to determine statewide reimbursement allowances for treatment and care of injured workers. Rule 69L-7.501, F.A.C., incorporates, by reference, the applicable reimbursement schedule created by the panel. Section 440.13(7)(c), F.S., requires the OMS to utilize this schedule in rendering its determination for this reimbursement dispute. No established authority exists to permit alternative schedules or other methodologies to be utilized for hospital reimbursement other than those adopted by Rule 69L-7.501, F.A.C., unless the provider and the carrier have entered into a mutually agreeable contract.
Rule 69L-7.501, F.A.C., incorporates, by reference, the Florida Workers’ Compensation Reimbursement Manual for Hospitals, 2006 Edition (Hospital Manual).
Since the carrier failed to indicate any of the services are not medically necessary, the OMS determined proper reimbursement applying the above referenced reimbursement guidelines. Therefore, the OMS has determined that the carrier improperly adjusted reimbursement to Florida Medical Center for services rendered to the above- referenced injured employee on May 3, 2009, and May 4, 2009. Based on the above analysis, the OMS has determined that correct reimbursement equals $2,138.25
($2,851.00 x 75% [Hospital Manual]=$2,138.25).
The carrier shall reimburse Florida Hospital Medical Center $2,138.25 for services rendered to the above-referenced employee; and submit proof of reimbursement of the amount determined by the OMS within thirty
days of the date the Determination is received. . . .
The difference between what Petitioner Amerisure paid Florida Hospital for services rendered to J. L. and the amount the Department determined that Petitioner Amerisure is required to pay for such services equals $881.10.
The Determination in 09-6872 did not directly address Amerisure’s allegation of the alleged billing error of “upcoding.”
The Determination in 09-6872 provided a 21-day notice for request of an administrative hearing and, as noted in the Preliminary Statement above, Amerisure timely requested a hearing.
Alleged “Upcoding” for Emergency Department Services
The Petitioners’ responses in both cases allege that Florida Hospital “upcoded” its bill for emergency department evaluation and management services. Neither EOBR submitted to Florida Hospital, however, reported alleged “upcoding” as an explanation for the Petitioners’ adjustment or disallowance of reimbursement.
While the Dispute Determinations by the Department do not directly address the carrier’s allegation of the alleged billing error of “upcoding” raised in the Petitioners’ responses, they found that “Rule 69L-7.602, F.A.C., stipulates the appropriate EOBR codes that must be utilized when explaining to the provider the carrier’s reasons for disallowance or adjustment[, and that] [o]nly through an EOBR is the carrier to communicate to the health care provider the carrier’s reasons for disallowance or adjustment of the provider’s bill.”
According to Mr. von Sydow, who was offered by Petitioners as an expert in billing, coding, reimbursement, and payment issues,8/ the “reason codes” that workers’ compensation carriers are to use pursuant to Florida Administrative Code Rule 69L-7.602, do not mention “upcoding,” and therefore an EOBR could not be generated with a reason code explaining reduction or disallowance based on “upcoding.”
The following reason codes, however, are included in Florida Administrative Code Rule 69L-7.602:
23 – Payment disallowed: medical necessity: diagnosis does not support the services rendered.
– Payment disallowed: insufficient documentation: documentation does not substantiate the service billed was rendered.
– Payment disallowed: insufficient documentation: level of evaluation and
management service not supported by documentation.
Neither EOBR submitted to Florida Hospital includes reason code 23, 40, or 41. And neither EOBR explains or otherwise suggests that that Florida Hospital’s level of billing was not supported by medical necessity, services rendered, or sufficient documentation.
In fact, Petitioners did not disallow reimbursement and do not contend that reimbursement should be denied for any services rendered by Florida Hospital to R. P. and J. L. on the grounds that the billed services were not medically necessary for the injured employees’ compensable injuries.
In addition, Petitioners did not adjust or disallow payment for any of the billed procedures on the grounds that the procedures were not provided.
In sum, the EOBR’s did not give Florida Hospital notice that alleged “upcoding” was an issue.
Even if Petitioner’s EOBR’s gave Florida Hospital notice that it was asserting “upcoding” as a reason to reduce or adjust the hospital’s bill, the evidence does not support a finding that Florida Hospital utilized the wrong code in its billing for emergency department evaluation and management services.
The CPT® 2009 Current Procedural Terminology Professional Edition, (Copyright 2008), (CPT book), is adopted by reference in Florida Administrative Code Rule 69L-7.602(3)(d) and Florida Administrative Code Rule 60L-7.020(2). The CPT book sets forth the procedure codes for billing and reporting by hospitals and physicians.
The CPT book sets forth CPT codes ranging from 99281 through 99285 used to report evaluation and management services provided in a hospital’s emergency department, described as follows:
A problem focused history;
A problem focused examination; and
Straightforward medical decision making.
Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs.
Usually, the presenting problem(s) are self limited or minor.
An expanded problem focused history;
An expanded problem focused examination; and
Medical decision making of low complexity.
Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the
problem(s) and the patient’s and/or family’s needs.
Usually, the presenting problem(s) are of low to moderate severity.
An expanded problem focused history;
An expanded problem focused examination; and
Medical decision making of moderate complexity.
Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs.
Usually, the presenting problem(s) are of moderate severity.
A detailed history;
A detailed examination; and
Medical decision making of moderate complexity.
Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs.
Usually, the presenting problem(s) are of high severity, and require urgent evaluation by the physician but do not pose an immediate significant threat to life or physiologic function.
A comprehensive history;
A comprehensive examination; and
Medical decision making of high complexity.
Counseling and/or coordination of care with other providers or agencies and provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs.
Usually, the presenting problem(s) are of high severity and pose an immediate significant threat to life or physiologic function.
Mr. von Sydow testified that a Qmedtrix “medical director,” reviewed Florida Hospital’s bill for services rendered to R. P., but not the medical records, and recommended that the hospital’s charge for emergency department services under CPT 99285 be “re-priced” to Qmedtrix’s determination of the “usual and customary charge” for CPT 99284. Mr. von Sydow acknowledged the need for physician review for some cases (as opposed to review by non-physician coders) by testifying, “The more complicated the medicine, the more likely it is that he [a medical director at Qmedtrix] wants to see it.”
Despite Qmedtrix’s original determination to “reprice” the bill from CPT code 99285 to CPT code 99284 (reflected in the reduced payment but not explained in the EOBR), Mr. von Sydow opined that the correct CPT code for emergency department services provided to patient R. P. was 99283, as opposed to 99285 billed by the hospital. Mr. von Sydow testified that his
opinion was based upon his own review of the medical records, without the assistance of a medical director or medical expert, and review of examples for the CPT codes for emergency department services from the CPT book, and various provisions of ICD-9 and CPT book coding resources.
Aside from the fact that Mr. von Sydow’s opinion differed from the purported recommendation of a Qmedtrix “medical director,” Mr. von Sydow is not a physician. Moreover, Qmedtrix failed to provide the testimony of the medical director, or anyone else with medical expertise to evaluate the medical records and services provided or to validate either the opinion of Mr. von Sydow or the original recommendation to “re- price” Florida Hospital’s use of CPT Code 99285 in its bill for emergency department services rendered to patient R. P.
Mr. von Sydow offered similar testimony and examples to explain Qmedtrix’s “re-pricing” of Florida Hospital’s bill from CPT code 99284 to CPT code 99282 for emergency services rendered to patient J. L. on behalf of Amerisure. According to Mr. von Sydow, an internal Qmedtrix coder (not a medical director) reviewed the bill for emergency services rendered to
J. L. and determined it should be re-priced to the usual and customary charge, as determined by Qmedtrix, using that CPT code 99282.
While knowledgeable of the various codes and their uses, given the manner in which preliminary diagnostics under emergency circumstances drives Florida Hospital’s determination of the appropriate CPT code for billing emergency department services, without the testimony of a medical expert familiar with the medical records generated in these cases in light of the facts and circumstances surrounding the emergency care rendered to patients R. P. and J. L., Mr. von Sydow’s testimony was unpersuasive.
Ross Edmundson, M.D., an employee, vice-president, and medical manager for Florida Hospital, explained that, unlike other settings, hospitals generally do not have the medical histories of patients presenting for emergency hospital services. When a patient comes to Florida Hospital for emergency services, they are triaged by a nurse to determine the level of urgency, then a doctor sees the patient, conducts a differential diagnosis to rule out possible causes, obtains the patient’s history, and then performs a physical examination.
While emergency room physicians at Florida Hospital do not decide which CPT code is utilized for the evaluation and management services provided by its emergency department, the various tests and procedures they undertake to evaluate and treat emergency department patients do.
James English, the director of revenue management for Florida Hospital explained the process through his deposition testimony.
Florida Hospital, like over 400 other hospitals, uses the “Lynx System” – a proprietary system for creating and maintaining medical records electronically. The program captures each medical service, supply, and physician order that is inputted into the electronic medical record. The hospital’s emergency evaluation and management CPT code is generated from the electronic record. A “point collection system” in the Lynx System translates physician-ordered services, supplies it to a point system, and then assigns the CPT code that is billed based upon the total number of “points” that are in the system at the time the patient is discharged from the emergency department. The level of the evaluation and management CPT code (99281 to 99285) that is reported on Florida Hospital’s bill is a direct reflection of the number and types of medical services that a patient receives from his or her arrival through discharge.
In light of evidence showing the manner in which emergency services are provided and the importance of medical records in generating the appropriate billing code for emergency evaluation and management services, it is found that Petitioners failed to provide an adequate analysis of the medical records of either R. P. or J. L. to show that the appropriate CPT codes
were not utilized by Florida Hospital in billing for those services.
On the other hand, both Petitions for Resolution of Reimbursement Dispute filed by Florida Hospital with the Department attached appropriately itemized bills utilizing Form DFS-F5-DWC-90, also known as UB-04 CMS-1450, identifying the charges billed for each line item by revenue code and HCPS or CPT codes. In addition, medical records for the evaluation and treatment provided by Florida Hospital for both patients R. B. and J. L. supporting the itemized bills were submitted to the Department. These documents were also received into evidence at the final hearing.
Florida Hospital’s bills at issue correctly identified the hospital’s usual charges for each individual and separately chargeable item, service or supply, with the corresponding code assigned to such billable items as maintained in Florida Hospital’s “charge master.”
In addition, Petitioners concede the compensability of both patients’ work-related injuries and do not dispute whether any service or supply rendered and billed by Florida Hospital for these two cases were “medically necessary.”9/
Unbundling
As noted above, in Case No. 09-6871, Qmedtrix’s response to Florida Hospital’s petition for resolution of
reimbursement dispute contended “unbundling” as a ground for adjustment or disallowance of reimbursement.
At the final hearing, Arlene Cotton, the nurse who issued the Dispute Determinations, explained that reason code 63 regarding “unbundling” is inapplicable to hospital billing, as there is no rule that requires hospitals to bundle bill for its services. Mr. von Sydow agreed that reason code 63 was inapplicable.
In addition, footnote 2 of Petitioners’ Proposed Recommended Order states, “they did not pursue the allegations of unbundling.”
Therefore, it is found that Petitioners did not prove and otherwise abandoned their claim of “unbundling” as a ground to adjust or disallow reimbursement to Florida Hospital.
Usual and Customary Charges
The Dispute Determinations issued by the Department found that correct payment in both cases equaled 75% of billed charges, citing “Rule 69L-7.501, F.A.C., [which] incorporates, by reference, the Florida Workers’ Compensation Reimbursement Manual for Hospitals, 2006 Edition (Hospital Manual).
Both Section 440.13(12)(a), Florida Statutes, and the Hospital Manual provide that hospital services provided to patients under the workers’ compensation law “shall be reimbursed at 75 percent of usual and customary charges.”
The Department interprets the term “usual and customary charges” as set forth in the Hospital Manual and Section 440.13(12)(a), Florida Statutes, quoted above, to mean a hospital’s usual charges of the hospital, whereas Petitioners contend that “usual and customary charges” means the average fee of all providers in a given geographical area.
While apparently not contending that Petitioners failed to raise the issue of “usual and customary” charges in their EOBR’s,10/ at the final hearing, the Department argued that “nowhere in [either Macy’s or Amerisure’s] response is the issue of customary charges raised.” A review of the responses filed by Qmedtrix to Florida Hospital’s reimbursement dispute petitions filed with the Department reveal that both raise the issue of “usual and customary charges.” Paragraphs 3 and 4 of Mr. von Sydow’s letter attached to both responses state:
As you may know, the proposed adoption of Medicare’s Outpatient Prospective Payment System as a methodology for reimbursing hospitals 60% and 75% of “usual and customary charges” follows from the decision of the First District Court of Appeals in One Beacon Insurance v. Agency for Health Care Administration, No. 1D05-5459 (Fla. 1st DCA 2007) (SB-50 amended section 440.13 to remove all reference to the charges of any individual service provider; this amendment reveals the legislative intent to eliminate calculation of a “usual and customary charge” based on the fees of any one provider in favor of a calculation based on average fees of all providers in a given geographical area).
This court decision requires DFS to define payment rates for out patient service that are uniformly applicable to all hospitals in a given geographic area.
In addition, at the final hearing, the Department argued that the petitions for administrative hearing did “not raise as a disputed issue of fact or law whether or not usual and customary charges should apply in this case.”
Indeed, a review of the request for relief set forth in the petitions for administrative hearings filed by Petitioners do not mention the issue of “usual and customary charges.” Rather, the relief requested by both petitions for administrative review of the Dispute Determinations, as summarized in the Joint Prehearing Stipulation, is:
Petitioner[s] seeks reversal of OMS’ Determination(s) and the matters remanded for the Department to:
direct payment based upon the actual treatment required/provided and pursuant to the correct CPT code;
find that the hospital upcoded and that Petitioner properly reimbursed (or exceeded amount due); and
determine that the hospital has the burden of proof to substantiate its billing and the use of the chosen CPT code.
Contrary to the Department’s argument, however, both petitions for administrative hearing raise the issue of “usual
and customary charges.” Page 9 of Macy’s petition, in pertinent part states:
Petitioner submits that in issuing the above findings OMS failed to consider the holding in One Beacon Insurance v. Agency for Health Care Administration (wherein the Court determined that reimbursement should not be based solely upon a mathematical equation [as found within the Reimbursement Manual] and applying it to the fee charged by a particular provider; and that by eliminating the reference to any one facility’s charges, the legislature intended that the charges be based on average fees of all providers in a geographical area as opposed to the fees of the particular provider in question).
Likewise, review of Amerisure’s petition for administrative hearing reveals that the issue of “usual and customary charges” was raised. Pages 7 and 8 of Amerisure’s petition state, in pertinent part:
Further, if the Hospital is permitted to utilize incorrect revenue codes it would be impossible to determine whether the charges are consistent with the Hospital’s own [usual and customary] charges for the service, procedure or supplies in question and, further, whether such charges are consistent with charges by other like facilities (in the same geographical area) for the same services, procedures, or supplies. See One Beacon Insurance, supra.
In addition, Amerisure’s petition on page 12 states with regard to the Department’s determination:
Such finding was issued without consideration of . . . the amounts charged for the same services in the Orlando area where this hospital is located.
Petitioners further preserved the issue of “usual and customary charges” in the first paragraph of their statement of position on page 3 of the Joint Prehearing Statement, as follows:
Petitioners, Macy’s and Amerisure, take the position that the Determinations must be reversed as the Department has the duty to scrutinize the bills in question in order to determine, first, whether the hospital, in fact, charged its usual charge for the services provided, and second, whether the billed charges are in line with the customary charges of other facilities in the same community (for the same or similar services) and that the Department failed to do so. As such, Petitioners contend that payment for services provided by Florida Hospital should have been based upon 75% of usual and customary charges, not 75% of billed charges.
Therefore, it is found that Petitioners have preserved the issue of “usual and customary charges” for consideration in this administrative proceeding.
Although preserved, Petitioners failed to demonstrate that their interpretation of “usual and customary charges” should prevail.
The Department has consistently interpreted the term “usual and customary charges” as used in the Hospital Manual, Section 440.13(12)(a), Florida Statutes, and rules related to hospital reimbursement under the workers’ compensation law as
the “usual and customary charges” of the hospital reflected on the hospital’s “charge master.”
The Hospital Manual requires each hospital to maintain a charge master and to produce it “when requested for the purpose of verifying its usual charges. . . .” (Emphasis added).
Petitioners did not conduct or request to conduct an audit to verify whether the charges billed by Florida Hospital corresponded with the Florida Hospital’s charge master. In fact, Mr. von Sydow conceded at the final hearing that Florida Hospital’s bills at issue were charged in accordance with Florida Hospital’s charge master.
Nor did Petitioners institute rule challenge proceedings against the Department regarding the Hospital Manual, incorporated by reference into Florida Administrative Code Rule 38F-7.501.
Instead, Petitioners assert that they should be able to reduce Florida Hospital bills based upon a different interpretation of the phrase “usual and customary charges” to mean the average charge in the community as determined by Qmedtrix.
Qmedtrix is not registered with the Florida Department of State, Division of Corporations, and does not employ any
Florida-licensed insurance adjuster, physician, or registered nurse.
Qmedtrix earns 12 to 15 percent of “savings” realized by carriers utilizing their bill review services. For example, if a bill is reduced by $100, Qmedtrix is paid $12.11/
Qmedtrix uses a proprietary bill review system called “BillChek.” According to Qmedtrix’s website:
BillChek reviews out-of-network medical charges for all bill types in all lines of coverage, including group health, auto, medical, and workers’ compensation.
BillChek is a unique specialty cost- containment service that determines an accurate and reasonable reimbursement amount for non-network facility and ancillary medical charges. BillChek incorporates historical data to help determine reasonable payment recommendations across all sectors of the health care industry. All BillCheck recommendations are backed by extensive medical and legal expertise, and supported by Qmedtrix’s experienced Provider Relations and Dispute Resolution teams.
According to the testimony of Mr. von Sydow, Qmedtrix collects and maintains data from various sources, including Florida’s Agency for Health Care Administration (AHCA), the American Hospital Directory (AHD.com), and HCFA 2552’s (data reported to the Centers of Medicare and Medicaid Services on HCFA 2522) in order to construct a database of health care providers’ usual charges. Mr. von Sydow advised that AHD.com data was a principle source for constructing the database. He
also advised that AHCA data was included in the database even though Qmedtrix found the AHCA data defective.
Examples of data downloaded from AHD.com for Florida Hospital showing a profile of the facility was received into evidence as P-5. The data did not, however, show usual charges for the CPT codes for emergency department services at issue in this case.
Petitioners also introduced into evidence Exhibits P-6 and P-7, which contained AHD.com data showing average charges for Florida Regional Medical Center and Florida Hospital, respectively, for Level 1 through Level 5 emergency room visits (corresponding to CPT codes 99281 through 99285). Mr. von Sydow explained that the data was part of the information Qmedtrix used to construct the average charge in the community. Petitioners failed to provide similar AHD.com data for other hospitals in the area Qmedtrix determined to be the “community.”
In addition, Petitioners introduced AHCA’s Florida Health Finder Web-site, as Exhibit P-8, which ostensibly included average charges for all hospitals in Florida for the subject emergency department CPT codes (99281 through 99285). Mr. von Sydow explained, however, “[w]e find that [the AHCA data] is not refreshed very often, unfortunately, and some other defects in the scrubbing of the data by the agency, which they know, I will say. But this is incorporated in our database to a
large extent.” The exhibit was received into evidence for the purpose of helping to explain how Qmedtrix constructed its database, with the recognition that it was largely composed of hearsay.
In sum, while Petitioners showed their methodology of constructing the database, other than the AHD.com data for Orlando Regional Medical Center and Florida Hospital, Petitioners failed to introduce reliable evidence sufficient to show the “usual and customary charge” of all providers in a given geographical area as determined by Qmedtrix. In addition, the AHCA data, though characterized by Mr. von Sydow as unreliable, indicates that there is a wide range of differences in emergency room charges between hospitals in Florida.
Petitioners’ interpretation of “usual and customary charge” to mean the average fee of all providers in a given geographical area does not take into account an individual hospital’s indigent care, cost of labor, overhead, number of beds, size, age, or various other differences between facilities that could affect amounts each hospital charges for emergency department and other services; the Department’s interpretation does.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and subject matter of this proceeding. See §§ 120.569 and 120.57(1), Fla. Stat.
The Department has jurisdiction over disputed workers’ compensation claims pursuant to Section 440.13(7), Florida Statutes, and Chapter 69L-31, Florida Administrative Code.
Section 440.13(7), Florida Statutes, provides in pertinent part:
Any health care provider, carrier, or employer who elects to contest the disallowance or adjustment of payment by a carrier under subsection (6) must, within 30 days after receipt of notice of disallowance or adjustment of payment, petition the Department to resolve the dispute. The petitioner must serve a copy of the petition on the carrier and on all affected parties by certified mail. The petition must be accompanied by all documents and records that support the allegations contained in the petition. Failure of a petitioner to submit such documentation to the Department results in dismissal of the petition.
The carrier must submit to the department within 10 days after receipt of the petition all documentation substantiating the carrier's disallowance or adjustment. Failure of the carrier to timely submit the requested documentation to the department within 10 days constitutes a waiver of all objections to the petition.
Within 60 days after receipt of all documentation, the department must provide to the petitioner, the carrier, and the affected parties a written determination of
whether the carrier properly adjusted or disallowed payment. The department must be guided by standards and policies set forth in this chapter, including all applicable reimbursement schedules, practice parameters, and protocols of treatment, in rendering its determination.
If the department finds an improper disallowance or improper adjustment of payment by an insurer, the insurer shall reimburse the health care provider, facility, insurer, or employer within 30 days, subject to the penalties provided in this subsection.
The department shall adopt rules to carry out this subsection. The rules may include provisions for consolidating petitioner filed by a petitioner and expanding the timetable for rendering a determination upon a consolidated petition.
Absent specific statutory authority, the burden of proof is on the party asserting the affirmative of an issue. Antel v. Department of Professional Regulation, 522 So. 2d 1056 (Fla. 5th DCA 1988); Department of Transportation v. J.W.C. Co.,
396 So. 2d 788 (Fla. 1st DCA 1981); Balino v. Department of
Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977).
In this case, it was Florida Hospital that, pursuant to Section 440.13(7), Florida Statutes, petitioned the Department for affirmative relief, i.e., a determination that the Petitioners improperly adjusted payment. The Department Dispute Determinations were favorable to Florida Hospital,
reflecting the Department’s preliminary determination granting Florida Hospital the relief it requested.
In this regard, Florida Hospital is similar to the permit applicant in J.W.C. Co., supra, and the Petitioners are akin to the third-party in J.W.C. Co. that was contesting the notice of intent issued by the agency in that case.12/
As noted in J.W.C. Co.:
[W]here a notice of intent has been issued, we can conceive of no more orderly way for a formal hearing to be conducted than to have the applicant (who has the ultimate burden of persuasion) first present a "prima facie case." The hearing officer is not required to commence hearing the petitioning objector's evidence in such a proceeding with a blank record. We think it is essential, both for the benefit of the hearing officer and the petitioning objectors (to say nothing of the agency, and the appellate court) to have on record a basic foundation of evidence pertaining to the application so that the issues can be understood, and so that evidence directed to these issues by the petitioning objectors can be properly evaluated. At the very minimum, this preliminary showing should include the application, and the accompanying documentation and information relied upon by the agency as a basis for the issuance of its notice of intent. To what extent it would be advisable or necessary for this preliminary presentation by the applicant to be further expanded would depend, to a large extent, on the nature of the objections raised by the petitioners requesting a hearing.
* * *
Being somewhat more specific, as a general proposition a party should be able to anticipate that when agency employees or officials having special knowledge or expertise in the field accept data and information supplied by the applicant, the same data and information, when properly identified and authenticated as accurate and reliable by agency or other witnesses, will be readily accepted by the hearing officer, in the absence of evidence showing its inaccuracy or unreliability. We emphasize again, however, that once a formal hearing is requested, there is no "presumption of correctness" in the mere fact that in preliminary proceedings the Department has issued its "notice of intent" to issue the permit that would relieve the applicant of carrying the "ultimate burden of persuasion."
* * *
Not every request for a formal Section 120.57(1) hearing may properly be granted, for it is clear that the petitioner must first demonstrate by appropriate pleading that there are disputed issues of fact requiring such a hearing. [Citations omitted]. . . . [N]o third party, "merely by filing a petition," should be permitted to require the applicant to "completely prove anew" all items in a permit application down to the last detail. The petitioner must identify the areas of controversy and allege a factual basis for the contention that the facts relied upon by the applicant fall short of carrying the "reasonable assurances" burden cast upon the applicant. The "burden of proof" is upon the petitioner to go forward with evidence to prove the truth of the facts asserted in his petition. If the petitioner fails to present evidence, or fails to carry the burden of proof as to the controverted facts
asserted assuming that the applicant's preliminary showing before the hearing officer warrants a finding of "reasonable assurances" then the permit must be approved. In making this preliminary showing of "reasonable assurances" before the hearing officer, the applicant is required to provide credible and credited evidence of his entitlement to the permit. This having been done, the hearing officer would not be authorized to deny the permit unless contrary evidence of equivalent quality is presented by the opponent of the permit.
J.W.C. Co., 396 So. 2d at 788-89.
Applying the reasoning of J.W.C. Co., supra, to this dispute, and considering the requirements of Section 440.13(7), set forth above, Petitioners must first, by way of pleading, “identify the areas of controversy and allege a factual basis for [their] contention that the facts relied upon by [Florida Hospital and the Department] fall short of carrying the ‘reasonable assurances’ burden cast upon [Florida Hospital as] the applicant.” J.W.C. Co., supra.
The petitions for administrative relief filed by Petitioners in these consolidated cases allege “upcoding,” “unbundling,” and challenge the Department and Florida Hospital’s interpretation of “usual and customary charges.” While the Petitioners were granted an administrative hearing, upon consideration of the actual matters raised in the pleadings in view of the stipulated facts and evidence presented at the
final hearing, it is concluded that Petitioners failed to maintain their contention that there are disputed issues of material fact because the issue of “upcoding” was not properly preserved, the issue of “unbundling” was not applicable and otherwise abandoned, and the issue of the “usual and customary charges” is actually a matter of law.
Alleged Upcoding
As noted in the Findings of Fact, above, while Petitioners alleged “upcoding,” they failed to raise it in their EOBRs. Section 440.13(7)(b), Florida Statutes, quoted above, requires carriers to “submit to the [D]epartment within 10 days after receipt of the petition [for resolution of reimbursement dispute] all documentation substantiating the carrier's disallowance or adjustment [and that] [f]ailure of the carrier to timely submit the requested documentation to the department within 10 days constitutes a waiver of all objections to the petition.”
Florida Administrative Code Rule 69L-31.008(1), adopted pursuant to Section 440.13(7)(e), Florida Statutes, provides that an EOBR constitutes “notice of disallowance or adjustment of payment” for purposes of Subsection 440.13(7)(a), Florida Statutes.
Florida Administrative Code Rule 69L-7.602(5)(q) provides that notice of disallowance or adjustment of payment,
which begins the 30-day time period in Section 440.13(7), Florida Statutes, shall only be through receipt of an EOBR issued by or on behalf of a carrier.
Florida Administrative Code Rule 69L-7.602(5)(q), in turn, sets forth the requirements for EOBRs, and requires carriers to select a code from the list in part (5)(o)3., which identifies the reason for disallowance or adjustment. This list contains approximately 50 reason codes, numbering (but not consecutively) from 10 to 95.
While the Dispute Determinations found that the codes within the EOBRs at issue complied with the codes contained in Rule Chapter 69L-7, they did not find that Petitioners used a reason code that identified “upcoding” to deny payment. And, in fact, as stipulated by the parties and specifically found above, Petitioners’ EOBRs failed to set forth “upcoding” as a reason for adjusting Florida Hospital’s bills. Therefore, Petitioners failed to provide proper notice under Section 440.13(7), Florida Statutes, and corresponding rules. It is therefore concluded that Petitioners failed to preserve the issue of “upcoding” as a disputed issue of material fact.
Even if Petitioners had preserved the issue of upcoding, considering the evidence submitted in this case, Florida Hospital met its initial burden of making out a prima facie case by documents entered into evidence as joint exhibits,
including Florida Hospital’s “applications” (Florida Hospital’s petitions for resolution of reimbursement disputes) submitted to the Department, together with accompanying documentation and information relied upon by the Department in making its Dispute Determinations.
Florida Administrative Code Rule 69L-31.011 provides:
The evidentiary record upon which the Department's determination will be made shall be the Petition for Resolution of Reimbursement Dispute Form and all supporting documents and records accompanying the petition and the Carrier's Response to Petition for Resolution of Reimbursement Dispute Form and all accompanying documents. However, if the petitioner and carrier enter into a joint stipulation of the parties pursuant to Rule 69L-31.012, F.A.C., the evidentiary record upon which the Department's determination will be made shall also include all additional supporting documentation submitted to the Department by the parties within the 10 calendar day period provided for in Rule 69L-31.012, F.A.C.
The supporting documents and records received into evidence in this proceeding supporting the petitions for resolution of reimbursement dispute forms include Florida Hospital’s bills for services provided to patients R. P. and
J. L. on forms DFS-F5-DWC-90, also known as forms UB-04 CMS- 1450, identifying the charges billed for each line item by revenue code and HCPS or CPT codes, and supporting medical records for each line item, as well as Petitioners’ EOBRs sent
to Florida Hospital in both cases. In addition, Petitioners’ responses to both petitions and all accompanying documents were received into evidence.
While the evidence established Florida Hospital’s prima facie case, Petitioners failed to prove the “truth of the facts asserted in their petition[s].” J.W.C. Co., supra. Petitioners did not prove that Florida Hospital’s bills at issue were “upcoded.” As found in the Findings of Fact, above,
Mr. von Sydow’s testimony on the issue of upcoding was unpersuasive, and Petitioners otherwise failed to provide evidence that Qmedtrix or Petitioners performed an adequate analysis of the medical records to show that the appropriate CPT codes were not utilized by Florida Hospital in billing for emergency department services provided to patients R. P. and
J. L.
Moreover, in addition to establishing Florida Hospital’s prima facie case, at the final hearing, evidence supporting Florida Hospital’s preliminary presentation to the Department was expanded by stipulated facts in the Joint Prehearing Stipulation submitted in this proceeding by the Department and Petitioners, in which the Petitioners concede compensability for the subject work-related injuries, that the billed services were provided and medically necessary, and that neither EOBR submitted by Petitioners alleged upcoding.
Florida Hospital’s claim for reimbursement in the sums set forth in the Dispute Determinations was further supported by evidence demonstrating how the appropriate billing codes were generated and establishing that the hospital bills at issue correctly identified the hospital’s usual charges for each individual and separately chargeable item, service or supply, with the corresponding codes assigned to such billable items as maintained in Florida Hospital’s charge master.
In sum, Petitioners failed to preserve or prove its allegations of alleged upcoding and the evidence submitted at the final hearing otherwise proved that Florida Hospital is entitled to be reimbursed for the emergency department services rendered to patients R. P. and J. L. at the rate determined in the Dispute Determinations.
Usual and Customary Charges
As to the issue of “usual and customary charges,” although preserved in the pleadings, the issue is a question of law, as opposed to a disputed issue of material fact.
Even if the issue were a disputed issue of fact, the evidence established Florida Hospital’s prima facie case by showing that Florida Hospital appropriately billed all services at rates established in its charge master, that Petitioners did not audit Florida Hospital’s charge master, and that Petitioners
otherwise conceded that all services billed were compensable and medically necessary.
Further, as a matter of fact, Petitioners failed to produce sufficient, reliable evidence to demonstrate the “usual and customary charges” in the community or the average fee of all providers in a given geographical area. Therefore, factually, Petitioners failed to establish the appropriate rate to be applied in this case for the bills at issue under Petitioners’ interpretation of the phrase “usual and customary charges.”
On the other hand, the Department and Florida Hospital’s interpretation of “usual and customary charges” to mean a hospital’s usual charges in accordance with the individual hospital’s charge master is consistent with the Department’s historical interpretation of the law and applicable rules.
Subsection 440.13(12)(a), Florida Statutes, provides that “[a]ll compensable charges for hospital outpatient care shall be reimbursed at 75 percent of usual and customary charges, except as otherwise provided by this subsection.”
Florida Administrative Code Rule 69L-7.501, effective October 1, 2007, incorporates by reference the Florida Workers’ Compensation Reimbursement Manual for Hospitals, 2006 Edition
(Hospital Manual). Section X.A. of the Hospital Manual provides:
Except as otherwise provided in this Section, hospital charges for services and supplies provided on an outpatient basis shall be reimbursed at seventy-five percent (75%) of usual and customary charges for medically necessary services and supplies, and shall be subject to verification and adjustment in accordance with Sections XI and XII of this Manual.
Hospital charges for scheduled outpatient surgery shall be reimbursed sixty percent (60%) of usual and customary charges and shall include all charges for radiology and clinical laboratory services when performed no more than three days prior to the date such surgery is performed.
Florida Administrative Code Rule 69L-7.602(4)(a)9., effective March 3, 2007, requires Florida Hospital to maintain a charge master and to produce relevant portions when requested for the purpose of verifying its usual charges.
Florida Administrative Code Rule 69L-7.602(1)(g), enacted pursuant to Section 440.13(12), Florida Statutes, defines “charges” as “the dollar amount billed.”
A “charge master,” as defined on page 27 of the Hospital Manual:
means a comprehensive listing of all the goods and services for which the hospital maintains a separate charge with the hospital’s charge for each of the goods and services, regardless of payer type. The charge master shall be maintained and produced when requested for the purpose of
verifying its usual charges pursuant to section 440.13(12)(d), F.S.
(Emphasis added). Accord, Fla. Admin. Code R. 69L-7.602(1)(h).
The above-recited rule provisions are consistent with Section 440.13(12)(a), Florida Statutes, and the Department’s historical interpretation of the term “usual and customary charges” found in that section, as well as in current and previous versions of the workers’ compensation law and rules, to mean charges of the hospital, as opposed to a charge in the community as urged by the Petitioners.
The Department’s current and historical interpretation of Section 440.13(12)(a), Florida Statutes, the Hospital Manual, and related rules has been in the context of reimbursement disputes between carriers and health care providers which the Department is charged to resolve. See
§ 440.13(7), Fla. Stat. (quoted, supra). “[A]n agency is afforded wide discretion in the interpretation of a statute which it has the been given the power and duty to administer.” Velez v. Comm’n on Ethics, 739 So. 2d 686 (Fla. 5th DCA 1999). Even where an agency’s interpretation of a statute it is charged with enforcing is one of several permissible interpretations, it must be upheld despite the existence of reasonable alternative interpretations. See, e.g., Pershing Industries, Inc. v. Dept. of Banking & Finance, 591 So. 2d 991, 993 (Fla. 1st DCA
1991)(upheld agency’s interpretation of the term “community” as found, but not defined, in the statute). Deference is also given to an agency’s interpretation of its own rules. See Contracting & Engineering Corp. v. Dept. of Transportation, 709 So. 2d 607, 610 (Fla. 1st DCA 1998)(“policy of deference to an agency’s expertise in interpreting its rules applies not only to the courts but also to administrative law judges”).
Petitioners, in essence, urge the Department to abandon its historical interpretation and application of the term “usual and customary charges” in the context of workers’ compensation reimbursement disputes without amending its rules or providing notice to Florida Hospital or other health care providers that would be affected by the change. Affected parties, however, have a “right to examine agency precedent and know the factual basis and policy reasons for agency action.” Gessier v. Dept. of Bus. & Prof’l. Regulation, 627 So. 2d 501 (Fla. 4th DCA 1993). Petitioners have not raised a rule challenge in this proceeding. Under the circumstances, the undersigned is bound to give appropriate deference to the Department’s interpretation of the term “usual and customary” as found in Section 414.13(12)(a), Florida Statutes, and the Department’s own rules. Cf. Clemons v. State Risk Management Trust Fund, 870 So. 2d 881, 884 (Fla. 1st DCA 2004)(Benton, J., concurring)(“While an administrative law judge presiding in a
section 120.57 proceeding will deem controlling duly promulgated administrative rules never challenged under section 120.56, it is open to a reviewing court to adjudicate and administrative rule at odds with the statute it purports to implement, even when there has been not administrative rule challenge proceeding below”).
Petitioners urge the application of One Beacon Insurance v. Agency for Heath Care Admin., 958 So. 2d 1127 (Fla. 1st DCA 2007), for the proposition that the phrase “usual and customary charges” means the usual and customary charge in the community. That case held that the Florida Legislature’s removal of all reference to the charges of any individual service provider in a new version of Section 440.13, Florida Statutes, effective in 1994, as applied to ambulatory surgical centers, meant that the reimbursement rates for ambulatory surgical centers should not be based upon the usual and customary charges of individual ambulatory surgical centers. In so finding, the First District determined that an old rule, found in the Florida Workers’ Compensation Manual for Ambulatory Surgical Centers, which continued to allow reimbursement based upon charges of individual surgical centers, must yield to the statutory change.
The First District in One Beacon, supra, based its determination on an amendment that substantially rewrote Section
440.13, which became effective in 1994. Specifically, a previous provision found in Section 440.13(4)(b) and (5), Florida Statutes (1992), provided in pertinent part that “[r]eimbursement of a compensable ambulatory surgical center charge not itemized in the schedule of maximum reimbursement allowances shall be at 70 percent of the ambulatory surgical center’s usual and customary charge.” 956 So. at 1129. The First District observed:
However, the statute was amended, effective January 1, 1994, to remove all reference to the charges of any individual service provider. Ch. 93-415, § 17, at 108-09, Laws of Fla. This amendment reveals the legislative intent to eliminate calculation of a “usual and customary charge” based on the fees of any one provider, in favor of a calculation of such charge based on average fees of all providers in a given geographical area. By so doing, the amendment created a conflict between the statute and the administrative rule. In cases of conflict, a statute takes precedence over an administrative rule. [citation omitted].
While the First District in One Beacon found that the old rule found in the Florida Workers’ Compensation Manual for Ambulatory Surgical Centers which continued to allow reimbursement based upon charges of individual surgical centers conflicted with the new language, it did not apply the same rationale to hospitals. The amendment referenced in One Beacon, supra, created a three-member panel that was charged with
determining “statewide schedules of maximum reimbursement allowances for medically necessary treatment, care, and attendance provided by physicians, hospitals, ambulatory surgical centers, work-hardening programs, pain programs, and durable medical equipment.” Ch. 93-415, § 17, at 108, Laws of Fla. (codified at § 440.13(12), Fla. Stat (1994)(the Amendment).
The Amendment specifically provided as to ambulatory surgical centers, and other specified health care providers (but not hospitals):
Until the three-member panel approves a uniform schedule of maximum reimbursement allowance and it becomes effective, all compensable charges for treatment, care, and attendance provided by physicians, ambulatory surgical centers, work-hardening programs, or pain programs shall be reimbursed a the lowest maximum reimbursement allowances for the services provided regardless of the place of service.
§ 440.13(c), Fla. Stat. (1994).
The Amendment provided much different language for hospitals, which continued to use the phrase “usual and customary charges,” and stated:
All compensable charges for hospital outpatient care shall be reimbursed at 75 percent of usual and customary charges.
Until the three member panel approves a schedule of per diem rates for inpatient hospital care and it becomes effective, all
compensable charges for hospital inpatient care must be reimbursed at 75 percent of their usual and customary charges.
§ 440.13(a), Fla. Stat.(1994).
A review of the above-quoted provisions demonstrates that the language found in subsection 440.13(c), Florida Statutes (1994), gave the First District in One Beacon a basis for finding that, prior to a determination by the three member panel, appropriate charges for ambulatory surgical centers and other specified health care providers (but not hospitals), should be “based on average fees of all providers in a given geographical area.” One Beacon, supra.
On the other hand, the language of subsection 440.13(12)(a), Florida Statutes (1994), does not provide a basis or support an interpretation that “usual and customary charges,” as used in the Amendment, refers to an average fee of all hospitals in a given geographical area prior to the time that the three-member panel determines the appropriate fee schedule. Rather, in light of the fact that the three-member panel had not yet determined a fee schedule or the average fee in the community, it is reasonable and appropriate to interpret “usual and customary charges” as found in Section 440.13(12)(a), Florida Statutes (1994), to mean the usual and customary charge of the individual hospital.
That being said, as the Department has consistently interpreted the provision in Section 440.13(12)(a), Florida Statutes (1994), and subsequent versions of that subsection13/ to mean a hospital’s “usual and customary charges”; as current and previous language of the Hospital Manual and related rules are consistent with the Department’s interpretation and the terms of the statute; and as Petitioners have failed to bring a rule challenge in this proceeding; the undersigned finds that Petitioners’ interpretation must fail, and the Department’s interpretation of “usual and customary charges” is supported under the facts and the law.
Based on the foregoing Findings of Fact and Conclusions of Law, it is
RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a Final Order consistent with this Recommended Order that:
Directs Macy’s Claims Services to reimburse Florida Hospital Medical Center $4,160.40 for services rendered to patient R. P., and to submit proof of reimbursement of that amount within 30 days from the date the Final Order is received;
Directs Amerisure Mutual Insurance Company to reimburse Florida Hospital Medical Center $2,138.25 for services rendered to patient J. L., and submit proof of reimbursement of that
amount to the Department within 30 days from the date the Final Order is received.
DONE AND ENTERED this 17th day of June, 2010, in Tallahassee, Leon County, Florida.
S
JAMES H. PETERSON, III
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 17th day of June, 2010.
ENDNOTES
1/ Unless otherwise indicated, all references to the Florida Statutes are to the 2009 version.
2/ All references to Florida Administrative Code Rule 69L-7.602 and subparts thereof are to the version adopted on March 8, 2007. Unless otherwise indicated, all other references to Florida Administrative Code Rules are to the current, adopted versions.
3/ Although identified in the style of these consolidated cases as a Petitioner, Qmedtrix does not have any substantial interests that will be affected by the Dispute Determinations. Rather, Qmedtrix is named as the “Entity on behalf of Petitioner” within both petitions for administrative review of the Dispute Determinations. Qmedtrix responded on behalf of Macy’s and Amerisure, to the reimbursement disputes filed by Florida Hospital at issue in these consolidated cases. While the style has not been changed, Qmedtrix did not participate as a party in these consolidated cases.
4/ Macy’s uses a third party administrator named HSI that sometimes generates the EOBR, but in this case, the EOBR was apparently generated by Macy’s after the bill review by Qmedtrix.
5/ See Conclusion of Law 104, infra.
6/ Amerisure does not directly contract with Qmedtrix, rather, the bill review services provided by Qmedtrix to Amerisure is through Amerisure’s third party administrator known as MCMC. It is unclear whether the EOBR for Amerisure was generated by Amerisure or MCMC. However, the EOBR was based on Qmedtrix’s bill review for Amerisure through MCMC.
7/ See Conclusion of Law 104, infra.
8/ While not specifically accepted as an expert as designated by Petitioner, Mr. Von Sydow was allowed to offer certain opinions in the area of hospital billing and coding, based upon his experience in the field.
9/ “Medically necessary” or “medical necessity,” as defined under Florida’s Workers’ Compensation Law, “means any medical service or medical supply which is used to identify or treat an illness or injury, is appropriate to the patient’s diagnosis and status of recovery, and is consistent with the location of service, the level of care provided, and applicable practice parameters. The service should be widely accepted among practicing health care providers, based on scientific criteria, and determined to be reasonably safe. The service must not be of an experimental, investigative, or research nature.
10/ At the final hearing, Mr. Von Sydow explained that “reason code” “82,” which stands for “Payment adjusted: payment modified pursuant to carrier charge analysis,” set forth in both EOBR’s adjacent to Florida Hospital’s emergency hospital charge means that a “usual and customary” charge reduction was applied.
11/ While Qmedtrix has some financial interest in the underlying reimbursement dispute, at the final hearing, Mr. Von Sydow conceded that Qmedtrix’s interest is not the kind of “legal interest” required for a “substantial interest” under Chapter 120, Florida Statutes.
12/ This reasoning, including quotations of pertinent case law, is adopted from CNA Insurance Companies v. Agency for Health Care Administration, Case No. 01-4147 (DOAH August 26, 2002), adopted in toto (AHCA Final Order February 7, 2003).
13/ Senate Bill 50-A, enacted in 2003, amended Section 440.13(12), Florida Statutes, to include the Legislature’s intent to increase maximum reimbursement allowances for health care providers and decrease payments to hospitals. That amendment, is consistent with the Department’s interpretation that “usual and customary charges” refers to the charges of an individual hospital. That amendment reduced reimbursement for non-emergency hospital outpatient services as follows:
It is the intent of the legislature to increase the schedule of maximum reimbursement allowances for selected physicians effective January 1, 2004, and to pay for the increases through reduction in payments to hospitals. Revisions developed pursuant to this subsection are limited to the following:
Outpatient reimbursement for scheduled surgeries shall be reduced from 75 percent of charges to 60 percent of charges.
COPIES FURNISHED:
Cindy R. Galen, Esquire Eraclides, Johns, Hall, Gelman, Eikner & Johannessen, L.L.P.
2030 Bee Ridge Road Sarasota, Florida 34239
Mari H. McCully, Esquire Department of Financial Services Division of Workers’ Compensation
200 East Gaines Street Tallahassee, Florida 32399-4229
John D. Buchanan, Esquire Henry, Buchanan, Hudson, Suber & Carter, P.A.
Post Office Box 14079 Tallahassee, Florida 32317
Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399
Honorable Alex Sink Chief Financial Officer
Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399
Julie Jones, CP, FRP, Agency Clerk Department of Financial Services Division of Legal Services
200 East Gaines Street Tallahassee, Florida 32399
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Sep. 29, 2010 | Agency Final Order | |
| Jun. 17, 2010 | Recommended Order | Respondent and Intervenor established proper billing methodology was used and that reimbursement for hospital care given to injured workers should be in accordance with agency's historical interpretation of Florida's workman compensation law and rules. |
