Close this search box.

Physician Assistants and Nurse Practitioners: Why a PIP Insurer Should Not Reduce Charges

A physician assistant (PA) is defined by the American Academy of Physician Assistants as a “healthcare professional who is licensed to practice medicine as a part of a team with physicians and other providers.” A nurse practitioner (NP) is defined as “a registered nurse (RN) who has completed advanced education (a minimum of a master’s degree) and training in the diagnosis and management of common medical conditions, including chronic illnesses.”

In the realm of PIP, many physician assistants and nurse practitioners provide medically necessary services to individuals who are involved in motor vehicle accidents. From consultation services to follow-up visits, these medical practitioners provide invaluable medical treatment. When the medical provider submits its bills, PAs and NPs sign the bottom of the Health Insurance Claims Forms (CMS 1500) to indicate that they actually provided the treatment/care on that specific date of service. Many insurance carriers will reduce their reimbursement to the provider based on the Code of Federal Regulations and the Medicare Claims Processing Manual. The Medicare Claims Processing Manual specifies at what percentage nurse practitioner and physician assistant charges should be reduced.

Medicare Claims Processing Manual and Federal Rules   

The Medicare Claims Processing Manual instructs insurers/insureds how to bill cases according to Medicare procedures. Specifically, the pertinent chapter of the Medicare Claims Processing Manual, 110, specifically states that, “Physician Assistant services are paid at… 85 percent of what a physician is paid under the Medicare Physician Fee Schedule. Thus, when a PA bills at 100%, the insurer is to reduce that payment by 15%. Chapter 12, Section 120 of the Medicare Claims Processing Manual likewise reduces reimbursement for services provided by Nurse Practitioners by 15%. These reductions have “teeth” as 42 CFR Section 414.56(c), and 42 CFR Section 414.52(c) support the same. Thus, many insurers apply these reductions to PIP cases, as PIP law in Florida does, in fact, incorporate some sections of Medicare.

PIP and Medicare Case Law

However, it is important to note that Florida Statutes Section 627.736, which is the Florida PIP statute, has many limitations as to how Medicare can be applied to the same. For example, Florida Statute 627.736(5) (a) (3), indicates that the applicable fee schedule or payment limitation to be applied for the purposes of subparagraph 2 is the Medicare fee schedule or payment limitation in effect at the time the services, supplies or care were rendered, except that it may not be less than the applicable 2007 Medicare Part B fee schedule for medical services, supplies, and care subject to Medicare Part B. In addition, the statute goes on to state, “does not allow the insurer to apply any limitation on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation. An insurer that applies the allowable payment limitations of subparagraph 2 must reimburse a provider who lawfully provided care or treatment under the scope of his or her license, regardless of whether such provisions would be entitled to reimbursement under Medicare due to restrictions or limitations on the types of discipline of health care providers who may be reimbursed for particular procedure codes.”

Moreover, in the case of SOCC, P.L. v. State Farm Mutual Automobile Insurance Company, the court stated, “the language of section 627.736(5)(a)(4) supports a finding that the Legislature did not intend for the NCCI edits or other limitations imposed in Medicare cases to be imposed under PIP… The plain language of this subsection states that under PIP an insurer may not apply any limitation on the number of treatments or utilization limits that would apply under Medicare…This language clearly prohibits an insurance company from treating PIP claims as if they were Medicare claims.” Importantly, the court held that the Florida legislature, “only incorporated the participating physicians’ schedule of Medicare Part B in the statute and not any other part of the Medicare System.” The court suggested that it intended only to incorporate the participating physicians’ fee schedule of Medicare in the Florida No-Fault statute and not the entire Medicare statute.

How County/Small Claims Courts Have Decided These Medicare Reduction Cases

Fourth Judicial Circuit in Duval County was presented with a 15% reduction of services rendered by a nurse practitioner in FIRST COAST MEDICAL CENTER a/a/o Thuni Nguyen v. State Farm Mutual Automobile Insurance Company. In the First Coast Medical Center case, the defendant, State Farm, reimbursed the plaintiff pursuant to 200% of the allowable amount listed in the participating physician’s schedule of Medicare Part B for 2009. State Farm indicated that it paid a reasonable amount pursuant to Florida Statutes Section 627.736(5)(a)(1). However, the 4th Judicial Circuit determined that State Farm ultimately reimbursed the plaintiff according to 200% of the allowable amount listed in the participating physician’s schedule of Medicare Part B for 2009 on review of State Farm’s explanations of review and subsequent reductions.

The 4th Judicial Circuit reiterated that the purpose of the PIP statute is to “provide swift and virtually automatic payment so that the injured insured may go on with his life without undue financial interruption.” The Court in the First Coast Medical Center case considered the underlying purpose of the PIP statute and ultimately held that “to hold otherwise would require medical providers to refer to MCP and other regulations that may be enacted or changed under Title 42 of the Code of Federal Regulations, thereby inserting another level of complex procedures, which is not set out by the Statutes and which the Legislature chose not to insert. Such procedure would defeat the purported purpose of the PIP statute and is not required.”

Court Decision: Deductions are impermissible

Ultimately, the 4th Judicial Circuit held that these reductions are impermissible and should not be utilized when deciding an amount to pay a medical practitioner/provider. It is essential to contact a PIP attorney who is experienced in handling these matters. Medicare claims processing methodology should not be used by an insurance company in determining the proper reimbursement. Moreover, arbitrary reductions for certain practitioners are not part and parcel of the Florida PIP Statutes. It is crucial to discuss these matters to ensure that payments aren’t mishandled and ultimately accepted. Many times insurers will reduce reimbursements utilizing these Medicare codes on multiple claims. A PIP litigation attorney is your buffer to ensure that all payments are collected the correct way, as mandated by the Florida PIP statutes!

Free Case Evaluation all fields required *