ARBITRATION AWARD. Hearing(s) held on 08/23/2017, 09/28/2017 Declared closed by the arbitrator on 09/28/2017

Transcription

1 American Arbitration Association New York No-Fault Arbitration Tribunal In the Matter of the Arbitration between: Metropolitan Surgical Services, LLC (Applicant) - and - State Farm Mutual Automobile Insurance Company (Respondent) AAA Case No Applicant's File No. Insurer's Claim File No X208 NAIC No ARBITRATION AWARD I, Fred Lutzen, the undersigned arbitrator, designated by the American Arbitration Association pursuant to the Rules for New York State No-Fault Arbitration, adopted pursuant to regulations promulgated by the Superintendent of Insurance, having been duly sworn, and having heard the proofs and allegations of the parties make the following AWARD: Injured Person(s) hereinafter referred to as: EIP "A.P." Hearing(s) held on 08/23/2017, 09/28/2017 Declared closed by the arbitrator on 09/28/2017 Elke Mirabella, Esq., from Dino R. DiRienzo Esq. participated in person for the Applicant Lauren Tucker, Esq., from Richard T. Lau & Associates participated in person for the Respondent The amount claimed in the Arbitration Request, $ 1,251.09, was NOT AMENDED at the oral hearing. Stipulations WERE NOT made by the parties regarding the issues to be determined. Summary of Issues in Dispute This claim seeks reimbursement for the charges submitted for a Physician Assistant's assistant surgeon services in connection with the left knee arthroscopic procedure performed at New Horizon Surgical Center, L.L.C., on 6/25/15. The surgeon was Dr. Kenneth McCulloch, M.D., and the "First Assistant" was Emaus Santiago, PA, an employee of Applicant herein. The claimed amount is $1, At the time of disputed services, the female EIP (initials "A.P.") was 56-years-old. She was injured in an automobile accident on 3/16/15. She underwent left knee surgery on 6/25/15. Respondent denied the claim on 11/17/15 asserting fee schedule defenses. Page 1/9

2 The issues are (1) whether a prior arbitration award precludes Respondent's defenses by application of the doctrine of collateral estoppel or res judicata and, if not, (2) whether Respondent's fee schedule defenses have been correctly applied and are supported by the NJ PIP Fee Schedule and its ground rules, of which I take judicial notice. 4. Findings, Conclusions, and Basis Therefor This case was decided based upon the submissions of the parties as contained in the electronic file maintained by the American Arbitration Association, and the oral arguments of the parties' representatives. I reviewed the documents contained in MODRIA for both parties and make my decision in reliance thereon. No witnesses testified at the hearing. Applicant has submitted two claims, as follows: CPT Code modifier 83 $ CPT Code modifiers 83/59 $ The total amount in dispute is $1, On 11/17/15, Respondent issued its late denial asserting a "[s]tatutory payment restriction for assistants at surgery applies to this procedure. Assistant at surgery may not be paid." In the attached EOB, Respondent asserts further that the "modifier submitted by the provider is not valid for the State of Jurisdiction or Zip of Service." Since fee schedule defenses may now be asserted at any time, the denial's lateness is irrelevant except as discussed below. Applicant submitted a copy of a letter, dated 12/24/15, in which it claims that the services of the surgical assistant, "Michele Campbell, P.A.", were medically necessary "to ensure the utmost safety of the patient." There is also a copy of a Medical Necessity Letter from Dr. McCulloch, also stating that the surgical assistant's services were necessary. In the copy of the purportedly re-submitted and revised NF-3, still dated 7/21/15, Applicant attempted to change the modifier to "AS" in its request for Respondent's re-evaluation of the claim. There is no proof of mailing this "revised bill" to the Respondent, and there is no record of any response from the Respondent or admission of its receipt by Respondent. I also note that these records list the wrong assistant by name. In any event, while there is no proof that it was submitted to the Respondent prior to arbitration, it was submitted as evidence in this arbitration. Respondent has the burden of coming forward with competent evidentiary proof to support its fee schedule defenses. See, Robert Physical Therapy PC v. State Farm Mutual Auto Ins. Co., 2006 NY Slip 26240, 13 Misc.3d 172, 822 N.Y.S.2d 378, 2006 N.Y. Misc. LEXIS 1519 (Civil Ct, Kings Co. 2006). See also, Power Acupuncture PC v. State Farm Mutual Automobile Ins. Co., 11 Misc.3d 1065A, 816 N.Y.S.2d 700, 2006 NY Slip Op 50393U, 2006 N.Y. Misc. LEXIS 514 (Civil Ct, Kings Co. 2006). If Page 2/9

3 Respondent fails to demonstrate by competent evidentiary proof that a plaintiff's claims were more than the appropriate fee schedules, defendant's defense of noncompliance with the appropriate fee schedules cannot be sustained. See, Continental Medical PC v. Travelers Indemnity Co., 11 Misc.3d 145A, 819 N.Y.S.2d 847, 2006 NY Slip Op 50841U, 2006 N.Y. Misc. LEXIS 1109 (App. Term, 1st Dep't, per curiam, 2006). In support of its fee schedule defenses, Respondent has provided an affidavit by Mercy Acuna, RN, BSN, CPC, along with her resume and experience in the field of fee coding. I determine that Ms. Acuna is qualified to provide her expert fee schedule opinion. Ms. Acuna states, in relevant part: "11: Application of medical fee schedules (f) Except as specifically stated to the contrary, the following shall apply to physician charges for multiple and bilateral surgeries (CPT through 69999), co-surgeries and assistant surgeons: 5. The eligible charge for medically necessary assistant surgeon expenses shall be 20 percent of the primary physician's allowable fee determined pursuant to the fee schedule and rules. Assistant surgeon expenses shall be reported using modifier -80, -81 or -82 as designated in CPT. When the assistant surgeon is someone other than a physician surgeon, the reimbursement shall not exceed 85 percent of the amount that would have been reimbursed had a physician surgeon provided the service. Non-physician assistant surgeon services shall be reported using modifier-as. 6. The necessity for co-surgeons and assistant surgeons for an operation shall be determined by reference to authorities such as the Medicare physician fee schedule database ( Fees for assistant surgeons and co-surgeons are not rendered eligible for reimbursement simply because it is the policy of a provider or an outpatient surgical facility that one be present. The allowable fee is 85% of the allowable fee for a physician assistant surgeon: As per 11: (6), "the necessity for an assistant shall be determined by reference to authorities such as the Medicare physician fee schedule database. Per the Medicare Physician Fee Schedule Database An assistant for CPT code has an indicator "0" which means "payment restriction must have supporting documentation". The eligible charge for medically necessary assistant surgeon expenses shall be 20 percent of the primary physician's allowable fee and shall not exceed 85 percent of the amount that would have been reimbursed had a physician surgeon provided the service. Page 3/9

4 CPT code has an indicator of "1" which means that assistant at surgery cannot be paid. CPT code = 20% (fee for a physician assistant surgeon) = 85% = $ (if there is documentation as to the medical necessity of an assistant) Assistant Surgery Indicator (copy of CMS Indicator attached) 0 = Payment restriction - must have supporting documentation. 1 = Assistant at surgery cannot be paid. 2 = Assistant at surgery can be paid 9 = Concept does not apply." (emphasis in bold added) Ms. Acuna concludes that since "[t]here is no documentation in the Operative report as to the medical necessity of an assistant therefore payment is not allowed per the rule." We are presented with a situation where a fee schedule defense has a medical necessity component, which would have otherwise been precluded due to the lateness of Respondent's denial of claim (issued long after Respondent's 30-day period to pay, deny or request additional verification had expired). I find that asserting this defense under the guise of a pure fee schedule defense is flawed. If Respondent had required further documentation on the issue of medical necessity for the assistant at surgery, Respondent should have availed itself to the verification process. Compare, Bronx Acupuncture Therapy P.C. v. Hereford Ins. Co., 2017 N.Y. Slip. Op (U) (App. Term. 2 Dept. 2017). Moreover, since this particular fee schedule defense relies on a lack of medical necessity argument, Respondent should have alternatively issued a denial within 30-days if Respondent believed it already had sufficient documentation to process this claim and determine that the assistant was not necessary. Instead, Respondent is now attempting to assert a lack of medical necessity defense in its post-denial coder affidavit, which I find is (1) insufficient and (2) is precluded by the late denial. Respondent's NF-10 denial states specifically that an assistant at surgery "may not be paid", which is incorrect as to CPT Code CPT Code may clearly be reimbursed under the fee schedule under certain circumstances. Therefore, Respondent has failed to meet its burden of proof that the fee schedule prohibits reimbursement. Regarding the additional reasoning included in the EOB, that "the modifier [83] is not valid ", Respondent's supporting affidavit analyzed the claims as if modifier "AS" was used. Further, Applicant submitted a 'revised bill" into evidence (without any proof of mailing, as indicated above), in which Applicant acknowledges that modifier "AS" is the appropriate modifier. Therefore, Respondent's coder affidavit provides the correct analysis as to its assertion that modifier 83 was incorrect. While this factual Page 4/9

5 determination has no effect on the charge under CPT Code 29980, discussed above, it does have an effect on the charge under CPT Code 29876, discussed below. Applicant's counsel argued that Ms. Acuna's affidavit is flawed and insufficient to meet Respondent's burden of proof because she did not provide discussion or analysis focused on modifier 83. In support of this argument, Applicant points to a prior arbitration decision that resolved a similar dispute between these same parties. Applicant's counsel asserts that the prior arbitration award resolves the instant claims based upon the doctrine of res judicata. I have also reviewed the prior decision in AAA Case No by Arbitrator Melisa Melis. Arbitrator Melis found for the Applicant in that case. Applicant argues that this prior decision is controlling here, as it involves the same parties and the same Respondent, and the issue is the same, i.e., whether the assistant's charges are reimbursable when using modifier 83. Applicant argues that the Respondent is prohibited under the doctrines of res judicata and collateral estoppel from re-litigation this issue. The doctrines of res judicata and collateral estoppel are fully applicable to arbitration proceedings. American Ins. Co., v. Messinger, 43 N.Y.2d 184, 401 N.Y.S.2d 36 (1977). However, it is within the arbitrator's authority to determine the preclusive effect of a prior arbitration. Matter of Falzone v. New York Central Mutual Fire Ins. Co., 15 N.Y.3d 530, 914 N.Y.S.2d 67 (2010), aff'g, 64 A.D.3d 1149, 881 N.Y.S.2d 769 (4th Dept. 2009). Moreover, in order for collateral estoppel to apply, the details of the reasoning underlying the prior determination are needed. Acuhealth Acupuncture, PC v. Country-Wide Ins. Co., 48 Misc.3d 1224(A), 2015 N.Y. Slip Op (U), 2015 WL (Sup. Ct. Kings Co., Ellen M. Spodek, J., July 24, 2015). While there certainly may have been adequate reasons for her decision, I do not see that Arbitrator Melis was presented with the same set of facts or the same issues. The prior decision may not have included an admission by Applicant that "AS" was the correct modifier. If it did, there was no specific reasoning provided as to why no consideration was given to the fact that Applicant acknowledged that modifier 83 was not correct when it included modifier "AS" on its revised bill. Moreover, Arbitrator Melis stated that "according to 11:3-29.4(f)5 of the New Jersey medical fee schedule, the modifier "AS" is for " non-physician assistant surgeon services " But, the services performed by this Applicant were physician assistant services. As such, I find that Ms. Acuna's analysis is incorrect as a matter of law." The aforementioned section of the New Jersey Fee Schedule provides two examples under this subsection "5." Either it is a physician performing the assistant services or a non-physician. A "P.A." or "Physician's Assistant" is a non-physician. I do not agree that a proper result can be reached by distinguishing a "non-physician assistant" and a "Physician's Assistant." They are both the same, both are not physicians, which is a clear reading of this subsection in my determination. Page 5/9

6 Therefore, I do not find Ms. Acuna's affidavit in this case to be incorrect as a matter of law. The evidence in the case before Arbitrator Melis may have been different, as it involved a different date of service, a different IP/Assignor, and surgery to a different body part, a different assistant, and a different fee coder affidavit. I determine, therefore, that the preclusion doctrines of res judicata and/or collateral estoppel do not apply to this arbitration proceeding. If either did apply here, I would decline to apply them to this arbitration for the additional reasons set forth above. Ms. Acuna's affidavit as to the charges under these CPT Codes is clear. "Non-physician assistant surgeon services shall be reported using modifier-as.; 6. The necessity for co-surgeons and assistant surgeons for an operation shall be determined by reference to authorities such as the Medicare physician fee schedule database ( Ms. Acuna provides the CMS "Assistant Surgery Indicator (copy of CMS Indicator attached); 0 = Payment restriction - must have supporting documentation.; 1 = Assistant at surgery cannot be paid." Respondent also provided the CMS.gov Physician Fee Schedule Search, which clearly supports Ms. Acuna's assertion that CPT Code has an assistant surgical indicator of "1", for which "assistant at surgery cannot be paid." First, I find that Ms. Acuna sets forth in her affidavit a sufficient explanation for her conclusion with respect to the charges under CPT Code 29876, and that by a preponderance of credible evidence Respondent has demonstrated that no reimbursement is allowed. Applicant has not offered a coder affidavit or any sufficient rebuttal evidence to disprove Respondent's fee schedule demonstration. Second, I find that Respondent's fee schedule defense with respect to the charges under CPT Code fails, as it is not supported by a preponderance of the credible evidence. Additionally, Respondent did not seek the additional verification that it states was missing in order to determine a lack of medical necessity for this service. Finally, Ms. Acuna's affidavit is insufficient to demonstrate a lack of medical necessity. The assistant surgery indicator is "0", which merely requires documentation to support medical necessity, which Respondent failed to request in the verification process. Based on a preponderance of the credible evidence, I find in favor of Respondent for CPT Code 29876, and in favor of Applicant for CPT Code Applicant is awarded $ Optional imposition of administrative costs on Applicant. Applicable for arbitration requests filed on and after March 1, I do NOT impose the administrative costs of arbitration to the applicant, in the amount established for the current calendar year by the Designated Organization. 6. I find as follows with regard to the policy issues before me: The policy was not in force on the date of the accident The applicant was excluded under policy conditions or exclusions Page 6/9

7 A. The applicant violated policy conditions, resulting in exclusion from coverage The applicant was not an "eligible injured person" The conditions for MVAIC eligibility were not met The injured person was not a "qualified person" (under the MVAIC) The applicant's injuries didn't arise out of the "use or operation" of a motor vehicle The respondent is not subject to the jurisdiction of the New York No-Fault arbitration forum Accordingly, the applicant is AWARDED the following: Medical From/To Claim Amount Status Metropolitan Surgical Services, LLC 06/25/15-06/25/15 Awarded: $1, $ Total $1, Awarded: $ B. The insurer shall also compute and pay the applicant interest as set forth below. (The filing date for this case was 07/14/2016, which is a relevant date only to the extent set forth below.) Applicant is awarded interest pursuant to the no-fault regulations. See generally, 11 NYCRR Interest shall be calculated "at a rate of two percent per month, calculated on a pro rata basis using a 30 day month." 11 NYCRR (a). A claim becomes overdue when it is not paid within 30 days after a proper demand is made for its payment. However, the regulations toll the accrual of interest when an applicant "does not request arbitration or institute a lawsuit within 30 days after the receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations." See, 11 NYCRR (c). The Superintendent and the New York Court of Appeals have interpreted this provision to apply regardless of whether the particular denial at issue was timely. LMK Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 12 N.Y.3d 217 (2009). C. Attorney's Fees Page 7/9

8 The insurer shall also pay the applicant for attorney's fees as set forth below Applicant is awarded statutory attorney fees pursuant to the no-fault regulations. See, 11 NYCRR Section (s)(2). The award of attorney fees shall be paid by the insurer. 11 NYCRR Section (e). Accordingly, "the attorney's fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or the court, subject to a maximum fee of $850.00" Id. The minimum attorney fee that shall be awarded is $ NYCRR Section (c). However, if the benefits and interest awarded thereon is equal to or less than the respondent's written offer during the conciliation process, then the attorney's fee shall be based upon the provisions of 11 NYCRR Section (i). For claims that fall under the Sixth Amendment to the regulation the following shall apply: "If the claim is resolved by the designated organization at any time prior to transmittal to an arbitrator and it was initially denied by the insurer or overdue, the payment of the applicant's attorney's fee by the insurer shall be limited to 20 percent of the total amount of first-party benefits and any additional first-party benefits, plus interest thereon, for each applicant with whom the respective parties have agreed and resolved disputes, subject to a maximum fee of $1, " D. The respondent shall also pay the applicant forty dollars ($40) to reimburse the applicant for the fee paid to the Designated Organization, unless the fee was previously returned pursuant to an earlier award. This award is in full settlement of all no-fault benefit claims submitted to this arbitrator. State of New York SS : County of Suffolk I, Fred Lutzen, do hereby affirm upon my oath as arbitrator that I am the individual described in and who executed this instrument, which is my award. 10/04/2017 (Dated) Fred Lutzen IMPORTANT NOTICE This award is payable within 30 calendar days of the date of transmittal of award to parties. This award is final and binding unless modified or vacated by a master arbitrator. Insurance Department Regulation No. 68 (11 NYCRR ) contains time limits and grounds upon which this award may be appealed to a master arbitrator. An appeal to a master arbitrator must be made within 21 days after the mailing of this award. All insurers have copies of the regulation. Applicants may obtain a copy from the Insurance Department. Page 8/9

9 ELECTRONIC SIGNATURE Document Name: Final Award Form Unique Modria Document ID: 4d643341a8de42e7088e7b37805c5080 Electronically Signed Your name: Fred Lutzen Signed on: 10/04/2017 Page 9/9