February 24, 2023Share
What is an ARNP/PA Reduction?
I recently reviewed a case where there was an ARNP reduction, and it prompted a fresh review of the law in this area of PIP litigation.
What is an ARNP/PA Reduction?
The Centers for Medicare and Medicaid Services provides for a reduction of 15% when medical services and care, as identified in Florida Statutes §627.736, are provided by an Advanced Registered Nurse Practitioner (“ARNP”) or Physician Assistant (“PA”). This is a Medicare coding policy and payment methodology authorized by Florida Statute.
How is it Authorized?
Florida Statute §627.736(5)(a)(1) authorizes an insurer to limit reimbursement to 80% of the schedule of maximum charges. Subparagraphs (a) through (f) then categorize the type of treatment provided and how it is to be reimbursed. For example, under subparagraph (a), emergency transport and treatment providers licensed under Chapter 401 are reimbursed at 200% of the Medicare Part B fee schedule. Applying the PIP statute’s mandate, the reimbursement is 80% of 200% of the Medicare Part B fee schedule. Whereas, under subparagraph (b), emergency services and care provided by a hospital are reimbursed at 75% of the usual and customary charges (“U/C”) in the community where the services are rendered. Applying the PIP statute’s mandate, the reimbursement is 80% of 75% of the usual and customary charges (potentially subject to a reasonableness evaluation).
Once the type of service and the proper reimbursement percentage has been identified, subparagraph (2) addresses which year’s fee schedule to use: the service year or the 2007 Medicare fee schedule. Then, subparagraph (3) allows the insurer to utilize Medicare’s coding policies and payment methodologies, so long as it does not constitute a utilization limit, to further limit the reimbursement amount. The ARNP reduction has been found to not be a utilization limit.
Specifically, subparagraph 3 states:
3. […] 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.
Medicare has many coding policies and payment methodologies, which include ARNP/PA reductions (a further 15% reduction from the fee schedule for services provided by an ARNP or PA), MPPR (multiple procedure payment reduction), NCCI (national correct coding initiative), budget neutrality adjustments (adjustments to the Medicare Physician fee schedule which are statutorily required by federal law), and bilateral procedure reductions (reductions when same procedure is performed bilaterally by same physician during same operative session or same date of service), just to name a few.
In the case of an ARNP/PA reduction, plaintiffs’ bills would be further reduced by 15%, or stated differently, reimbursed at 80% of 85% of 200% of the fee schedule, or 80% of 85% of the U/C rate, depending on which year’s fee schedule applies.
Historically, it does not appear that ARNP/PA reductions have been challenged until recently. I was unable to locate any DCA opinions directly related to ARNP or PA reductions except one from Florida’s Second District Court of Appeal that was PCA affirmed and is unfavorable to the insurer. In Crespo & Associates, P.A. a/a/o D. McCulley v. USAA Services Automobile Association, 28 Fla. L. Weekly Supp. 82a, Case No. 17-CC-012137, (Fla. Hillsborough Cty. May 1, 2020), the court ruled that while the insurer was allowed to use Medicare coding policies and payment methodologies, it was not allowed to go below 80% of 200% of the Medicare Part B fee schedule. The insurer appealed, and the Second District Court of Appeal PCA affirmed the trial court’s ruling, without opinion. United Services Automobile Association v. Crespo & Associates, P.A., a/a/o D. McCulley, Case No. 2D21-178 (Fla. 2d DCA 2021) (Mandate issued/rehearing denied.). Because there was no written opinion, this is not binding.
The above decision and the county court’s reasoning is in direct conflict with the Fourth District Court of Appeal in State Farm Mut. Auto. Ins. Co. v. Stand Up MRI of Boca Raton, P.A., 322 So.3d 87 (Fla. 4th DCA 2021) (“Boca Raton”), which addressed the MPPR reduction. In this case, the Court stated the schedule of maximum charges is “simply a base rate that may be adjusted “downwards” by applying the Medicare coding policies and payment methodologies,” which includes reducing to an amount lower than 2007. Id. at 94. Specifically, the Court stated:
“…the schedule of maximum charges is simply a base rate that may be adjusted downwards by applying Medicare coding policies and payment methodologies, such as the MPPR, to determine the appropriate amount of reimbursement. [W]hile [subparagraph 2] establishes that the allowable amount in the 2007 Medicare Part B fee schedule must be used when it is higher than the applicable year’s Medicare Part B fee schedule’s allowable amount, [subparagraph 3] permits that allowable amount to then be reduced by the applicable and permissible Medicare coding policies and CMS payment methodologies when determining the amount of reimbursement for the claim.” State Farm Mut. Auto. Ins. Co. v. Pan Am Diagnostic Servs. Inc., 26 Fla. L. Weekly Supp. 466b, 2018 WL 10626018, at *3 (Fla. 17th Cir. Ct. Sept. 5, 2018); see also Fountains Therapy Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 27 Fla. L. Weekly Supp. 755a (Broward Cty. Ct. Oct. 7, 2019) (“Subparagraph (2) clarifies what fee schedule should be used when determining the allowable amount referenced in subparagraph (1). Subparagraph (3) makes it clear that insurers can use Medicare coding policies and CMS payment methodologies when determining the reimbursement amount.”). Id. (Emphasis added.)
“We read subparagraph 3 as permitting insurers to use Medicare coding policies and payment methodologies, such as MPPR, to reduce the reimbursement amount for PIP benefits below the applicable amount under the 2007 Medicare Part B schedule.” Id. at 94.
In evaluating State Farm’s policy language, the Court concluded that “neither the PIP statute, nor State Farm’s policy, prohibit State Farm from applying the MPPR to reduce the reimbursement to an amount less than the allowable amount of the 2007 Medicare Part B fee schedule.” Id. (Emphasis added.).
There are further decisions from the Fourth DCA affirming that MPPR is a Medicare coding policy and payment methodology applicable to PIP claims. See Progressive American Ins. Co. v. Head to Toe Posture Rehab, LLC, 326 So.3d 1158 (Fla. 4th DCA 2021); State Farm Mutual Auto. Ins. Co. v. Pan Am Diagnostic Services, Inc., 321 So.3d 807 (Fla. 4th DCA 2021). This opinion was further applied to National Correct Coding Initiative (“NCCI”) edits to reduce a provider’s bill. See Progressive Select Ins. Co. v. Dr. Rahat Faderani, DO, MPH, P.A., 330 So.3d 928 (Fla. 4th DCA 2021).
I have not found any decisions specifically on topic from the First, Third, or Fifth DCAs. Prior decisions below the DCA level are:
Interventional Associates of Lakeland, LLC a/a/o La’Miracle Lawson v. Progressive American Ins. Co., 27 Fla. L. Weekly Supp. 641b (Fla. Orange Cty. March 11, 2019) (upholding the application of the ARNP reduction and finding that ARNP is not a utilization limit); Progressive American Ins. Co. v. Hess Spinal & Medical Centers, Inc. a/a/o Stefan Iliev, 2019 WL 13130495 (Fla. 13th Jud. Cir. Appellate August 27, 2019) (upholding the use of MPPR to reduce the fee schedule amount so long as it does not constitute a utilization limit.); Florida Wellness & Rehab PA a/a/o Jose Perez Calo v. Progressive Select Inc. Co., 27 Fla. L. Weekly Supp. 742a (Fla. Hillsborough Cty. October 17, 2019) (upholding the application of MPPR).
Additional Negative Authority:
Stand-Up MRI of Tallahassee, P.A. a/a/o Sheri Andrews v. State Farm Mutual Automobile Ins. Co., 27 Fla. L. Weekly Supp 93b (Fla. Broward Cty. March 20, 2019) (holding that MPPR was not allowed if the result was lower than the Medicare Part B fee schedule for 2007).
Charges provided by an ARNP are not entitled to PIP benefits if the required protocol of supervision is not filed with the Board of Medicine. See Sunshine Rehab and Medical Inc. v. State Farm Mutual Auto. Ins. Co., 27 Fla. Weekly Supp. 544a (Fla. Miami-Dade Cty. July 18, 2019).
Currently, the only binding decisions appear to be Boca Raton, Head to Toe Posture Rehab, Pan Am Diagnostic Services and Faderani, both handed down by the Fourth DCA. There is no conflict among DCAs, so this case law is binding state-wide.
While these decisions are specific to MPPR reductions, the rulings are applicable to ARNP/PA reductions, as well, both being Medicare coding policies and payment methodologies. Based on our analysis, as set forth above, we believe that these reductions are valid and defendable.