Medical Billing Review in PIP Cases

Florida law requires all private vehicle owners to carry Personal Injury Protection (PIP) insurance. Also known as “no-fault” insurance, Florida’s PIP insurance covers occupants of the insured vehicle regardless of which driver caused the accident. 

If an occupant of the insured vehicle receives medical care soon after a car accident that injures the occupant, the company that insured the vehicle must pay 80% of the “reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing services” that the injury victim receives at any time because of the accident. However, the insurance company is only liable for $10,000 in medical expenses unless the owner purchases a higher coverage limit.

Two key questions determine the injury victim’s right to have medical expenses paid by PIP insurance. The first is whether the victim’s injuries were caused by an accident while the victim was occupying the insured vehicle. The second is whether the medical bills for treatment of those injuries were reasonable and necessary.

Treating physicians typically testify that the treatment they provided was necessary. Florida courts have determined that medical billing experts are in the best position to testify about the reasonableness of medical expenses in a PIP case.

Med-Union Medical Center sued Progressive Express Insurance Company for failing to pay medical expenses from PIP coverage that the insured injury victims assigned to Med-Union. Progressive wanted to call a medical billing expert to prove that Med-Union’s bill was unreasonable.

The trial judge examined a Florida statute that requires an injury victim to submit to a medical examination at the insurer’s request when the victim makes a PIP claim. The statute provides that an “insurer may not withdraw payment of a treating physician without the consent of the injured person covered by the personal injury protection, unless the insurer first obtains a valid report by a Florida physician licensed under the same chapter as the treating physician whose treatment authorization is sought to be withdrawn, stating that treatment was not reasonable, related, or necessary.”

The judge read the statute to mean that only a licensed Florida physician could determine whether medical expenses were reasonable. The judge misunderstood the statute. The quoted section requires a medical opinion to establish that a physician’s medical treatment was not reasonable. The statute says nothing about proving that the charge for treatment was or was not reasonable.

On appeal, the trial judge was reversed. The appellate court concluded that medical billing experts are not required to practice medicine to form an opinion about the reasonableness of billed medical expenses.

The appellate court did agree with the trial judge that if an insurance company wants to “reduce, deny, or withdraw” PIP benefits, it must produce a report that justifies its position. While the statute doesn’t make clear that the report requirement applies to medical billing experts, the services that billing experts routinely provide to counsel include the preparation of a detailed report.

Florida’s no-fault approach to insurance has not been adopted by most other states. A recent bill to abolish PIP in Florida was vetoed by the governor. Although PIP in Florida limits the ability to recover medical expenses in many cases, the law does not preclude the opportunity to sue a negligent driver under all circumstances. 

Injury victims who suffer permanent injuries in Florida because of another driver’s negligence are entitled to sue the driver who was at fault. Those injury victims can recover all their reasonable bills, as opposed to the 80% and the policy limits that apply to PIP claims. They can also recover lost wages, damages for lost earning capacity, the expense of coping with a disability, and compensation for pain and suffering.

When larger medical expenses are at stake, medical billing experts become the key to proving that medical expenses are or are not reasonable. Florida courts have recognized that medical billing experts can give admissible testimony when the reasonableness of medical charges are disputed.

In a leading Florida case, the appellate court reviewed a trial judge’s decision to exclude a medical billing expert. An insurance company retained the expert to examine the plaintiff’s medical records and billing records. The expert determined that significant charges for services rendered were not supported by any medical record demonstrating that the services were actually provided.

The court determined that billing experts have expertise that ordinary jurors lack. Billings refer to medical services by Current Procedural Terminology (CPT) codes. Billings refer to the physician’s diagnosis by International Classification of Diseases (ICD) codes. A thorough understanding of CPT and ICD codes is necessary to interpret medical billings.

The court of appeals held that the expert had “specialized knowledge and training to express an opinion on whether the medical bills were properly coded and whether they correspond to the medical records documenting the purported treatment.” The expert’s conclusions about the relationship between billings and services provided was relevant to the insurance company’s defense. The opinions were admissible because they were founded on reliable expert knowledge that ordinary jurors lack.

Medical billing experts also look for errors in billings. For example, when multiple procedures are performed at the same time, it typically takes less time to perform them than it takes when the services are provided at separate times. Billing codes are designed to reflect that time savings. When doctors “unbundle” charges to bill each procedure separately, they are overcharging. 

In addition to testifying about billing errors and mismatches between services provided and services billed, medical billing experts can determine whether charges for services rendered are reasonable as compared to the fees charged by other doctors. Courts recognize that usual, customary, and reasonable (UCR) charges may be recovered as damages, while excessive charges may not be recovered.

Medical billing experts use reliable databases to determine the UCR rate for services in the geographic area where the services were rendered. The UCR rate is based on actual charges for the same services by other providers. When a physician’s billing rate approximates the usual charge, it is the customary charge and is therefore reasonable. When the billing rate for a service substantially exceeds the customary rate, it is probably unreasonable. Medical billing experts have the ability to quantify reasonableness by using reliable methodologies to explain why billings are or are not reasonable.