Award of Dispute Resolution Professional. In Person Proceeding Information

Transcription

1 In the Matter of the Arbitration between Neurological Surgery Associates, PA A/S/O R.L. CLAIMANT(s), Forthright File No: NJ Proceeding Type: In Person Insurance Claim File No: 717PPHGV Claimant Counsel: Law Offices of Fano & Krug, P.C. v. Claimant Attorney File No: Respondent Counsel: Marshall, Dennehey, Warner, Coleman & Goggin Respondent Attorney File No: JLJ Accident Date: 05/13/2011 Travelers of New Jersey Insurance Company RESPONDENT(s). Award of Dispute Resolution Professional Dispute Resolution Professional: Lisa D. Mundy Esq. I, the Dispute Resolution Professional assigned to the above matter, pursuant to the authority granted under the "Automobile Insurance Cost Reduction Act", N.J.S.A. 39:6A-5, et seq., the Administrative Code regulations, N.J.A.C. 11:3-5 et seq., and the Rules for the Arbitration of No-Fault Disputes in the State of New Jersey of Forthright, having considered the evidence submitted by the parties, hereby render the following Award: Hereinafter, the injured person(s) shall be referred to as: RL A proceeding was conducted on: May 7, 2014 In Person Proceeding Information Claimant or claimant's counsel appeared in person. Respondent or respondent's counsel appeared by telephone. The following amendments and/or stipulations were made by the parties at the hearing: At the hearing, claimant amended its claim to reflect $41, as the amount in dispute. Claimant also stipulated that the multiple procedure reduction formula applies to CPT codes and NJ Page 1 of 10

2 Findings of Fact and Conclusions of Law This matter stems from a motor vehicle accident that occurred on May 13, 2011 in which the patient, RL is alleging injuries. On that date, RL was eligible to receive PIP benefits under an insurance policy issued by respondent. Claimant, Neurological Surgery Associates, P.A., proceeds by way of assignment from RL. Claimant has filed the within action seeking reimbursement of PIP medical benefits in the amount of $41, representing underpayment of a cervical surgery performed on November 2, The above amount represents an amendment of the prior claim of $105, Further, at the hearing, claimant stipulated that the multiple procedure reduction formula (hereinafter MPRF) applies to CPT codes and The parties agree that the MPRF does not apply to the remaining codes at issue. Pursuant to Forthright Rule 16, claimant has provided the following Arbitration Summary: CPT Code Amount Billed Amount Paid Amount Alleged $69, $43, $26, $20, $12, $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTAL: $41, In accordance with Forthright Rule 43, at the hearing, the parties raised one issue to be decided by this DRP. The parties understand that issues not raised at the time of the hearing, regardless as to whether they were raised in the parties submissions, will not be addressed herein and are deemed waived. Thus, the singular issue in dispute is the UCR of the codes billed. Evidence Considered: In making my determination, I considered the following documentation submitted by the parties: claimant s Demand for Arbitration with attachments, claimant s pre-hearing submission dated March 25, 2014 with attachments consisting of a total of 198 pages, respondent s prehearing submission dated April 25, 2014 with attachments, respondent s pre-hearing submission dated April 28, 2014 with attachments, claimant s pre-hearing submission dated May 6, 2014 with attachments and respondent s pre-hearing correspondence dated May 6, 2014 advising Forthright that counsel would be appearing via telephone. I also considered the oral argument of the parties offered at the time of the hearing. It should be noted that at the hearing, claimant s counsel supplied courtesy copies of its two pre-hearing submissions dated March 25, One of the submissions was 198 pages and the other was 16 pages. However, only the 198-page submission was on the Forthright portal and thus, this is the only submission (in addition to the May 6, 2014 submission with attachments) that is part of the record evidence on behalf of claimant. I confirmed this fact with the Case Manager. Thus, claimant s March NJ Page 2 of 10

3 25, 2014 submission consisting of 16 pages was not considered in rendering the within Award. As indicated above, the sole issue in dispute is the appropriate UCR rate of reimbursement for the codes at issue. Respondent s Position It is respondent s position that claimant was properly paid for the codes at issue and as such, nothing further is due and owing. In support of its position, respondent first relies upon the fee schedule review performed by Christopher L. Ricotta, a Travelers Billing Specialist showing that the appropriate benchmark rate, based upon Ingenix or other relevant data, was applied to codes 22511, 22552, 38230, 20938, 20937, , and Respondent has also submitted copies of the applicable Ingenix data for the claimant s geographic region for CPT codes 22551, 22552, 20938, 20937, and Respondent submits that the Ingenix data revealed that 75 percent of the medical providers in claimant s geographic region billed as follows for the CPT codes at issue: $43, or less for CPT $12, or less for CPT $ or less for CPT $ or less for CPT $ for CPT $ or less for CPT Respondent also relies upon the Certifications of Angelique M. Schweikowsky and Michele Hibbert Iacobacci. According to their Certifications, Ms. Schweikowsky has been employed by respondent since January 2008 as a Claim Product Manager and interacts and oversees all of the national vendors utilized by Travelers for managing the coding and bill pricing aspects of healthcare claims submitted to Travelers by healthcare providers in connection with automobile related claims. Likewise, Ms. Iacobacci certifies that since July 15, 1994, she has been employed as Vice President of Information Management and Support at Auto Casualty Solutions, a division of Mitchell International, Inc. (hereinafter Mitchell ), a company that licenses software used to review bills submitted by healthcare facilities and medical providers. Both Certifications identify a contractual relationship between respondent and Mitchell, whereby respondent was permitted to utilize Mitchell s Decision Point software for determining usual and customary fees on professional and facility bills emanating from services provided in the State of New Jersey. How Mitchell s software, as used by respondent, functions for UCR purposes is described in Ms. Iacobacci s Certification as follows: 5. Mitchell s DecisionPoint software does not determine reasonable medical charges for a certain geographic region. Rather Mitchell s DecisionPoint software provides benchmark data of medical charges from physicians and other healthcare providers in a given geographic area for a certain period of time to help Travelers and other insurers to determine what is a reasonable charge for a given medical procedure, service or medical device. NJ Page 3 of 10

4 6. Mitchell obtains this benchmark data from the Ingenix MDR database as a licensee of Ingenix, and the FH RV Benchmark database as a licensee of FAIR Health. For dates of service before June 1, 2011, Mitchell s DecisionPoint software program uses benchmark data from the Ingenix MDR database, and for dates of service on and after June 1, 2011 Mitchell s DecisionPoint software program uses benchmark data from the FH RV Benchmark database. 7. Mitchell does not alter or otherwise manipulate this data. This data is directly imported from the Ingenix MDR and FH RV Benchmark databases into Mitchell s DecisionPoint software program without changing the data. This data is also regularly updated as revisions are received from Ingenix and/or FAIR Health to reflect the most up-to-date pricing available. 8. The statistical information underlying this benchmark data is gathered and compiled by Ingenix and/or FAIR Health, is proprietary to Ingenix and/or FAIR Health, and is not revealed to Mitchell. Mitchell s software merely serves as a conduit for Travelers and other insurers to determine what is a reasonable charge for a given medical procedure, service, or medical device. 9. Mitchell s DecisionPoint software simply provides the end user with a monetary amount for the cost of a medical procedure, service, or medical device (benchmark) as an option based entirely on the date provided to it by Ingenix and/or FAIR Health, third party data vendors. The insurance carrier decides whether payment in whole or in part should be tendered to the provider. This is in no way controlled or dictated by Mitchell s software. 10. Any benchmarks for usual and customary fees provided to Travelers through the Mitchell DecisionPoint software related to professional and facility bills emanating from service provided in the State of New Jersey from on or after July 12, 2009, until October 10, 2010, were computed based upon the 85 th percentile of the Ingenix MDR database. 11. Any benchmarks for usual and customary fees provided to Travelers through the Mitchell DecisionPoint software related to professional and facility bills emanating from service provided in the State of New Jersey starting on October 10, 2010, have been computed based upon the 75 th percentile of the Ingenix MDR and/or FH RV Benchmark databases. Respondent also argues that in establishing the PIP fee schedules, N.J.S.A. 39:6A-4.6(a) directs the State of New Jersey Department of Banking & Insurance to incorporate the reasonable and prevailing fees of 75% of the practitioners within the region. Respondent further submits that by Order No. A10-113, issued on August 26, 2010, the State of New Jersey Department of Banking & Insurance validated the reliability of Ingenix MDR database for use in determining UCR charges. Claimant s Position NJ Page 4 of 10

5 Claimant argues that it has established that its billing is its usual and customary rate of reimbursement and as such, it should be paid as billed. In support of its position, claimant has provided a Certification from Dr. Cifelli indicating that the billing here was its usual and customary billing. In addition, there have been multiple EOBs from both Dr. Cifelli as well as other providers submitted as well as Ingenix data. Claimant also argues that UCR is not subject to a 75% standard, which the fee schedule is based. Claimant submits that in the matter of In Re Adoption of NJAC 11:3-29, in the discussion regarding UCR, it is stated that The Department maintains that the 75% standard does not apply to the UCRs and applies only to the PIP fee schedule...the fees not listed on the fee schedule are paid at the UCR, which is not subject to the 75% standard. Thus, claimant questions the quality of the proofs supplied by respondent. Law and Analysis N.J.A.C. 11: (e) governs CPT codes not found in the New Jersey Fee Schedule and sets forth as follows: Except as noted in (e) 1 and 2 below, provides that the insurer s limit of liability for any medical expense benefit for any service or equipment not set forth in or not covered by the fee schedules shall be a reasonable amount considering the fee schedule amount for similar services or equipment in the region where the service or equipment was provided or, in the case of elective services or equipment provided outside the State, the region in which the insured resides. Where the fee schedule does not contain a reference to similar services or equipment as set forth in the preceding sentence, the insurer s limit of liability for any medical expense benefit for any service or equipment not set forth in the fee schedules shall not exceed the usual, customary and reasonable fee. 1. For the purposes of this subchapter, determination of the usual, reasonable, and customary fee means that the provider submits to the insurer his or her usual and customary fee. The insurer determines the reasonableness of the provider s fee by comparison of its experience with that provider and with other providers in the region. The insurer may use national databases of fees, such as those published by Ingenix ( or Wasserman ( for example, to determine the reasonableness of fees for the provider s geographic region or zip code. As indicated above, where the New Jersey fee schedule does not apply, the insurer s limit of liability for any medical expense benefit for any service that is not set forth in the New Jersey Fee Schedule shall not exceed that usual, customary and reasonable fee. The Appellate Division, in Cobo v. Mkt. Transition Facility, 293 N.J. Super. 374 (App. Div. 1996), stated the following: The provider in submitting the billings, makes the initial determination as to what his or her usual, customary and reasonable fee is. It is incumbent on the insurer, based on its experience with the particular provider, of other providers in the region to determine whether, in fact, the usual, customary and reasonable fee has been billed. Further, according to DOBI Bulletin No , the determinations of the DRPs shall be fair, efficient and consistent with substantive law and the Department s rules for the handling of PIP claims. In NJ Page 5 of 10

6 specific regard to UCR, the Bulletin provides as follows: Usual, Customary and Reasonable (UCR) Fees: Many DRPs incorrectly assert that UCR fees can be demonstrated by simply reviewing examples of provider invoices. The DRPs who do so frequently rely upon language from Cobo vs. Mkt. Transition Facility, 293 N.J. Super. 374 (App. Div. 1996). This is legally incorrect and ignores the fact that through amendments to the PIP Medical Fee Schedule rule adopted subsequent to Cobo, the Department established a different process for how UCR is to be calculated. The Department s rule at N.J.A.C. 11:3-29.4(e)1 clearly states that the provider is to submit his or her usual and customary fee for the service and it is the insurer, not the provider that is to determine reasonableness. The rule was upheld by the Appellate Division (In Re Adoption of N.J.A.C. 11:3-29 by the State of New Jersey, Dep t of Banking & Ins., 410 N.J. Super. 6, (App. Div. 2009)), and clearly permits insurers to use national databases to determine the reasonableness of a provider s usual and customary fee. Further, in accordance with the Appellate Division s decision, the Department in Order A concluded that the Ingenix MDR database can be used by insurers to determine the reasonableness of fees that are not on the fee schedule. Therefore, DRPs should be following this new procedure for determining the appropriate UCR reimbursement. In the case of In Re Adoption of N.J.A.C. 11:3-29 by the State of New Jersey, Dept. of Banking and Ins., supra, the Appellate Division ratified the amendments to the regulation establishing an effective date of August 10, 2009 for the revised fee schedules. Ingenix was enjoined from use until the Department was able to review the credibility of the database based on concerns as to the possibility that Ingenix skewed its results to suggest a reduction in fee reimbursement. In upholding the regulations and fee schedules, the Appellate Division noted the following: The proposed rule conforms to Cobo. Under N.J.A.C. 11:3-29.4(e)(1), the provider submits his or her usual and customary fee. The insurer then determines the reasonableness of the fee. That is no different than the procedure in Cobo. The new provision allows the insurer to consult with a national database for help in determining the reasonableness of the fee. Such a procedure will provide more protection against arbitrary determinations to the providers. Nevertheless, if a provider disagrees with the insurer's determination, the provider has the option of filing for arbitration. N.J.S.A. 39:6A-5.1. There is accountability and meaningful review. In re Adoption, supra. Thus, in its holding, the Appellate Division essentially affirmed Cobo yet confirmed that national databases may be used by the insurers in its process to determine reasonableness. However, as argued by claimant, the Court also noted that the 75 percentile standard applies only to the Department s analysis in preparing the fee schedule and is not applicable to insurers in determining reasonableness as part of a UCR analysis. Specifically, the Court in In re Adoption, supra, addressed N.J.S.A. 39:6A-4.6(a) (which states that the fee schedules shall incorporate the reasonable and prevailing fees of 75% of the practitioners within the region ), and agreed with the Department of Banking and Insurance, that fees not listed on the fee schedule are paid at the UCR, which is not subject to the 75% standard. The law in New Jersey is clear. When the fee schedule does not apply, it is the provider s duty to submit NJ Page 6 of 10

7 its usual and customary fees for the services rendered. It is then up to the insurer to determine reasonableness. Based upon the evidence submitted before me, I make the following findings: I accept respondent s representation that it uses the 75 th percentile of the Ingenix MDR and/or FH RV Benchmark database in making its reasonableness determination for CPT codes not contained in the fee schedule. Further, pursuant to New Jersey law as identified above, I find that respondent s reliance on the national databases identified is permissible. However, I agree with claimant that respondent improperly based its reasonableness determination regarding claimant s fees based on a comparison of 75% of the practitioners within claimant s geographic region. I agree with claimant that the Court has made clear that the 75% standard does not apply to UCR. I also find that claimant has presented sufficient evidence to satisfy its burden that the amounts billed by the provider are its usual and customary amounts. The question then becomes whether the amounts charges are reasonable. Based upon claimant s own Ingenix data, I find claimant s billings, in part, are generally higher than even the 95 th percentile in the applicable geographic region. Thus, based upon the weight of credible evidence submitted before me, I make the following findings relative to the UCR of the codes at issue: CPT Claimant billed $69, Respondent paid $43, Based upon claimant s Ingenix data and the submitted proofs, I find $50, a reasonable rate of reimbursement. Claimant is thus awarded $ CPT Claimant billed $20, Respondent paid $12, Based upon the claimant s Ingenix data and the submitted proofs, I find $14, reasonable. Claimant is therefore awarded $ CPT Claimant billed $ Respondent issued reimbursement in the amount of $ Claimant stipulated that the MPRF applies and thus, 50% of the eligible amount is owed. Based upon claimant s Ingenix data and the submitted proofs, I find $ is a reasonable rate of reimbursement. Based upon the MPRF, $ is therefore, the eligible amount. Thus, claimant is awarded $ in additional reimbursement. CPT Claimant billed $ Respondent paid $ Based upon the submitted proofs, I find claimant s billing was reasonable. Claimant is thus awarded $ CPT Claimant billed $ Respondent issued reimbursement in the amount of $ Again, I find claimant s billing was reasonable. Claimant is awarded $ CPT Claimant billed $ Respondent issued reimbursement in the amount of $ Claimant stipulated that the MPRF applies. As the parties appear to agree that the UCR for this service is NJ Page 7 of 10

8 $ and claimant is only entitled to receive 50% of the eligible amount pursuant to the MPRF, I find claimant was reimbursed in full and nothing further is due and owing. CPT Claimant billed $ Respondent paid $ Based upon the submitted proofs, I find claimant s billing was reasonable. Claimant is thus awarded $ CPT Claimant billed $ Respondent issued reimbursement in the amount of $ Based upon the submitted proofs, I find claimant s billing reasonable. Claimant is awarded $ Conclusion Based upon the above findings, claimant is awarded a total of $13, This Award is made subject to any remaining patient co-pay/deductible if applicable. I find that Claimant was successful and is entitled to an award of counsel fees and costs. Rule 22 of the New Jersey No-Fault PIP Arbitration Rules provides that the costs of the proceedings shall be apportioned by the DRP and the Award may include attorney s fees for a successful claimant in accordance with N.J.A.C. 11: N.J.A.C. 11:3-5.6 provides as follows: (e) Pursuant to N.J.S.A. 39:6A-5.2(g), the costs of the proceedings shall be apportioned by the DRP and the award may include reasonable attorney's fees for a successful claimant in an amount consonant with the award. Where attorney's fees for a successful claimant are requested, the DRP shall make the following analysis consistent with the jurisprudence of this State to determine reasonable attorney's fees, and shall address each item below in the award: 1. Calculate the "lodestar," which is the number of hours reasonably expended by the successful claimant's counsel in the arbitration multiplied by a reasonable hourly rate in accordance with the standards in Rule 1.5 of the Supreme Court's Rules of Professional Conduct. i. The "lodestar" calculation shall exclude hours not reasonably expended; ii. If the DRP determines that the hours expended exceed those that competent counsel reasonably would have expended to achieve a comparable result, in the context of the damages prospectively recoverable, the interests vindicated, and the underlying statutory objectives, then the DRP shall reduce the hours expended in the "lodestar" calculation accordingly; and iii. The "lodestar" total calculation may also be reduced if the claimant has only achieved partial or limited success and the DRP determines that the "lodestar" total calculation is therefore an excessive amount. If the same evidence adduced to support a successful claim was also offered on an unsuccessful claim, the DRP should consider whether it is nevertheless reasonable to award legal fees for the time expended on the unsuccessful claim. NJ Page 8 of 10

9 2. DRPs, in cases when the amount actually recovered is less than the attorney's fee request, shall also analyze whether the attorney's fees are consonant with the amount of the award. This analysis will focus on whether the amount of the attorney's fee request is compatible and/or consistent with the amount of the arbitration award. Additionally, where a request for attorney's fees is grossly disproportionate to the amount of the award, the DRP's review must make a heightened review of the "lodestar" calculation described in (e)1 above. Supreme Court s Rules of Professional Conduct. Further, Rule 1.5 of the Supreme Court s Rules of Professional Conduct provides that a lawyer s fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; (8) whether the fee is fixed or contingent. In Enright v. Lubow, 215 N.J. Super. 306 (App. Div. 1987), the court set out seven basic factors to be included in the determination to award attorney s fees: (1) the insurer s good faith in refusing to pay the claim; (2) the excessiveness of plaintiff s demands; (3) the bona fides of the parties; (4) the insurer s justification in litigating the issues; (5) the insured s conduct as it contributes substantially to the need for litigation; (6) the general conduct of the parties; and (7) the totality of the circumstances. Id at 313. See also Scullion v. State Farm Ins. Co., 345 N.J. Super. 431 (App. Div. 2001). More specifically, the factors I considered in determining the reasonableness of the attorney fee were the time and labor required, the skill requisite to perform the legal service properly, the fee customarily charged in the locality for similar legal services, the amount involved and the results obtained. Counsel for claimant has submitted a Certification of Services seeking a counsel fee of $ representing 7.6 hours at $ per hour and costs of $ Counsel for respondent has objected to the number of hours billed and the hourly billing rate. I have reviewed the Certification of Services and find that an award of $ is consonant with the award, Rule 1.5 and the applicable case law. This amount reflects a reduction in hourly rate and time spent. I also award costs of $ representing costs associated with filing the Demand for Arbitration. NJ Page 9 of 10

10 Therefore, the DRP ORDERS: 1. Medical Expense Benefits: Awarded: Disposition of Claims Submitted Medical Provider Amount Claimed Amount Awarded Payable To Neurological Surgery Associates, P.A. $41, $13, Neurological Surgery Associates, P.A. This Award is made subject to any remaining patient co-pay/deductible if applicable. 2. Income Continuation Benefits: Not in issue 3. Essential Services Benefits: Not in issue 4. Death or Funeral Expense Benefits: Not in issue 5. Interest: I find that the Claimant did prevail. Interest is awarded pursuant to N.J.S.A. 39:6A-5h. Attorney's Fees and Costs I find that the Claimant did not prevail and I award no costs and fees. I find that the Claimant prevailed and I award the following costs and fees (payable to Claimant's attorney unless otherwise indicated) pursuant to N.J.S.A. 39:6A-5.2g: Costs: $ Attorney's Fees: $ THIS AWARD is rendered in full satisfaction of all claims and issues presented in the arbitration proceeding. Entered in the State of New Jersey Date: 06/04/14 NJ Page 10 of 10