Award of Dispute Resolution Professional. In Person Proceeding Information

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1 In the Matter of the Arbitration between ADVANCED ORTHOPAEDICS & SPORTS MEDICINE CENTER, PC A/S/O G.B. CLAIMANT(s), Forthright File No: NJ Proceeding Type: In Person Insurance Claim File No: Claimant Counsel: Fredson & Statmore, L.L.C. v. Claimant Attorney File No: Respondent Counsel: Dyer & Peterson, P.C. Respondent Attorney File No: Accident Date: 12/14/2010 New Jersey Manufacturers Ins Group RESPONDENT(s). Award of Dispute Resolution Professional Dispute Resolution Professional: Nanci G. Stokes 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: GB A proceeding was conducted on: 05/21/13. In Person Proceeding Information Claimant or claimant's counsel appeared by telephone. Respondent or respondent's counsel appeared in person. The following amendments and/or stipulations were made by the parties at the hearing: The claim is amended to $7, NJ Page 1 of 9

2 Findings of Fact and Conclusions of Law Nature of Dispute: I. Is additional payment owed to the providers for shoulder surgery? Do the providers have standing? The following documentation was submitted for consideration and reviewed: Claimant Ambulatory Surgery Center of New Jersey: Demand including: bills and assignment. Submission dated 5/13/13 with letter memorandum, coding materials, appeal and medical records. Letter dated 5/29/13. Certification of Services. Claimant Advanced Orthopedics and Sports Medicine Center: Demand including: bills and assignment. Submission dated 6/27/12 with medical records and other materials. Submission dated 5/13/13 with letter memorandum, coding materials, appeal and medical records. Letter dated 5/29/13. Certification of Services. Respondent: Submission dated 4/30/13 including: letter memorandum, audit, EOBs, Awards, coding materials and other attachments. Submission dated 6/5/13. I also heard the arguments of counsel. I. This matter is part of a consolidated matter involving the surgeon and surgical facility involved in the following services: 8/5/11, shoulder surgery and PRP injection. Rule 9 advises that consolidation is available in order to promote the prompt and efficient resolution of PIP disputes and that consolidation is preferred for interdependent cases. The surgeon (Dr. Lane of Advanced Orthopedics and Sports Medicine Center) also seeks post-operative exam charges and certain pre-operative services. Thus, Forthright cases NJ (Advanced Orthopedics and Sports Medicine Center) and NJ (Ambulatory Surgery Center of New Jersey, LLC were consolidated. Ancillary providers rely upon the arguments and medical documentation of the treating provider. The patient presented to orthopedist Dr. Lane with respect to right shoulder complaints. The patient was first examined on 1/18/11. X-rays were performed. Surgery was ultimately recommended and performed on 8/5/11. The provider billed CPT (arthroscopy, decompression of the subacromial space with acromioplasty), (distal claviculectomy) and (limited debridement) as well as codes CPT (tissue graft) and CPT (injection subcutaneous or intramuscular) to represent a PRP injection. Respondent paid for the surgery code CPT 29822, but asserts that reimbursement of other codes was not warranted. NJ Page 2 of 9

3 Further, if determined medically appropriate, reimbursement per the Fee Schedule, AAOMS guidelines and NCCI edits warrants payment for only and CPT is considered as included in the other charges when performed in the same compartment. In particular, respondent had approved the arthroscopic SLAP repair (29807), (debridement of the rotator cuff) and the platelet rich plasma injection. The provider had requested CPT codes 29807, 29826, 29824, (extensive debridement), 29822, and The peer review (Dr. Gaskel) approved the codes based on his review of the shoulder arthrogram and notes of the provider. A tear of the labrum was noted (SLAP tear) on the diagnostic test and the provider believed that although not appreciated by the radiologist, there was either tendinosis in the rotator cuff or a partial tear. Dr. Gaskel noted that there was a positive impingement sign. However, the arthrogram did not reveal acromial abnormality. Thus, the acromioplasty clavicle resection was not approved. The provider should supply pictures and the operative report prior to approval of the other codes requested but not approved. Respondent advised that authorization was dependent on submission of the operative report and photographs. It is noted that respondent asserts there was no adequate appeal to services at issue in this case. Both processing errors or bill reductions and medical denials require an internal appeal. The DPRP requires an appeal be filed prior to the submission of a dispute to arbitration. This is a condition the patient s assignment of medical expense benefits to the provider. See also N.J.A.C. 11:3-4.9 (insurers may include reasonable restrictions on assignment which may include requirement that a provider follow insurer s decision point review plan which may include an internal appeal process); Coal. for Quality Health Care v. N.J. Dep t of Banking & Ins., 348 N.J. Super. 272, (App. Div. 2001), certif. den. 174 N.J. 194 (2002) (upholding approval by DOBI of insurance policy forms which void an assignment for noncompliance by the provider or insured.). It is noted that there is no specific appeal as to the denial of the one x-ray service on 1/18/11. As such, the claim for this date is denied. However, the providers did submit an appeal as to the denial of services in connection with the surgery on 8/5/11. An initial appeal by Dr. Lane was denied as the operative report and phtographs were not submitted. However, after the procedure was performed, the operative report was supplied with another appeal as well as the EOB noting non-payment of certain codes. Facsimile verification is supplied. However, respondent asserts that the provider was still required to submit photgraphs. Claimant notes that there was AC joint tenderness and cross-body abduction test as well as a positive O Brien test suggested possible AC joint derangement on his exam. MRIs/Arthrogram often do not visualize the shoulder well and can miss damage within the shoulder joint compartments as was the case here. Claimant maintains it could not reasonably determine the precise services/codes to be performed until scoping the shoulder. However, claimant sought approval for all surgical procedures he felt may be warranted once visualization occurs. The operative report clearly supports the services performed. In particular, a full SLAP tear repair was not needed, but rather only debridement was necessary as the labrum was viewed as stable (Type 1 tear). NJ Page 3 of 9

4 Thus, even though approved by the insurer, CPT was not needed or the proper code for the surgery to address this area. The labrum and rotator cuff were debrided. However, there was a torn AC joint meniscus/type 11 acromion and inflammatory subacromial bursitis noted during surgery and thus, the other codes billed were appropriate to address AC and subacromial abnormalities noted; CPT (arthroscopy, decompression of the subacromial space with acromioplasty) and (distal claviculectomy). Claimant asserts that the submission of the operative report was adequate for the appeal and that the request for photographs was excessive and unreasonable. The surgeon has an obligation to accurately report pre and post-operative diagnoses, operative findings and procedures performed. Further, claimant asserts the doctrine of substantial compliance is a valid and appropriate consideration in this case. Substantial compliance is an equitable doctrine which is intended to alleviate harsh consequences that flow from technically inadequate actions that nonetheless meet a statute s underlying purpose. Galik v. Clara Maas Med. Ctr., 167 N.J. 341, 352 (2001). The elements to be considered before the doctrine is invoked to excuse non-compliance have been set forth by the Supreme Court, as follows: (1) Lack of prejudice to the defending party; (2) a series of steps taken to comply with the statute involved; (3) a general compliance with the purpose of the statute; (4) a reasonable notice of petitioner s claim, and (5) a reasonable explanation why there was not a strict compliance with the statute. Id. at 354. In this case, respondent did not address the second appeal that included the operative report. There was clearly an attempt to comply and the provider has an obligation to accurately identify findings and procedures performed in an operative report. I do not find that the requirement of photographs to be reasonable and the materials supplied with the appeal submitted post-operatively to be adequate to support the services billed. Further, it is noted that the surgery center both relies upon the medical necessity appeal of the provider as well as its own appeal prior to the filing (facsimile verification is supplied). There was no response to this appeal per the evidence. Respondent cannot assert prejudice having largely ignored the later appeals. Similarly, I find the surgery center s appeal is adequate. The providers involved in this consolidated matter both have standing to proceed. Further, I find that the operative report denotes AC abnormality and thus, the repairs under CPT and CPT are medically necessary and appropriate. The abnormality was consistent with exam findings. It is clear that MRIs are not necessarily accurate in determining the extent of abnormality located in a particular joint. See Miltner vs. Safeco Ins. Co. of Am., 175 N.J. Super. 156 (Law Div. 1980). Awards are submitted by both parties in this matter to support their respective positions. However, none are binding. Respondent also asserts that the billing of the PRP injection under CPT and CPT was incorrect. Respondent notes that a code was identified for such injections in CPT 0232T is defined as injection(s), platelet rich plasma, including guidance, harvesting and preparation when performed. In addition, no actual tissue graft was performed. Rather, whole blood was obtained from the patient. The procedure described (collection of the blood from the patient, processing the blood in a centrifuge/gps system to collect and separate plasma rich platelets, and the injection) is clearly covered by the definition of the new code. In order to address proper coding of services, documentation may include the existence of temporary or AMA Category III or HCPCS codes for the procedure or NJ Page 4 of 9

5 information in the AMA CPT Assistant publication. N.J.A.C. 11:3-29.4(k). Further, it is accepted that the insurer may review the supporting materials to determine if coding was appropriate. Id. Thus, approval of a procedure does not alone require an insurer to issue payment for the codes billed or approved. Rather, the medical documentation can be reviewed to determine the appropriate codes to be reimbursed. See also DOBI's Frequently Asked Questions for July 2010 (carrier not required to pay for approved treatment if coding is not supported as billed and/or is subject to the NCCI). Thus, I find that the provider had an obligation to utilize CPT 0232T to correctly bill the services at issue. Respondent also asserts that the service is not entitled to separate reimbursement when performed in connection with another surgical procedure. N.J.A.C. 11:3-29.4(j) states that the existence of a CPT code, per se, does not imply the right to receive separate compensation for the procedure/sub-procedure so described. N.J.A.C. 11:3-29.4(g), as in effect for the services in question, states that "artificially separating or partitioning what is inherently one total procedure into subparts that are integral to the whole for the purpose of increasing medical fees is prohibited. Such practice is commonly referred to as "unbundling" or "fragmented" "billing". Providers and payors shall use the National Correct Coding Initiative Edits, incorporated herein by reference as updated quarterly by CMS and available at http/: Respondent maintains that the AMA CPT Assistant and American Academy of Orthopedic Surgeons conclude that separate billing of PRP is inappropriate when performed as part of a larger reconstruction or repair procedure. According to the AMA and AAOS, PRP is to be billed separately only when performed in a separate patient encounter from a surgical procedure. When a physician uses PRP as part of a larger reconstruction or repair, it is not separately billable. The AAOS stated: The new code is to be used only when PRP is performed in a complete separate patient encounter from the surgical procedure anytime a physician uses PRP as part of a larger reconstruction or repair it is not separately billable. Claimant, however, asserts that the NCCI edits are controlling for purposes of the determination as to unbundling of services. Claimant specifically notes that the NCCI edits do not support respondent s position in this case. Even if 0232T is the correct code, the other codes billed are not noted on the edits. CPT 29826, and (the surgery codes) do not edit 0232T. Thus, per claimant, separate reimbursement is owed for all codes per claimant. NCCI edits are coding methodologies created by the Centers for Medicare and Medicaid Services (CMS) to instill correct coding guidelines as to coding combinations reported on claims with CPT and HCPCS Level II codes. Certain codes are not paid separately when billed with other codes except under certain circumstances. These guidelines are incorporated to the New Jersey regulations addressing coding/billing. However, respondent notes the CMS NCCI policy manual specifically notes that the CPT and HCPCS definitions do not define all services included in the procedure. Further, NCCI does not address all possible code combinations or types of unbundling that exist. Providers remain obligated to code properly even where the edits do not exist to prevent an inappropriate code combination. Thus, silence NJ Page 5 of 9

6 should not be considered as an approval of a particular coding combination. At the time of the services, both the AMA CPT Assistant and AAOS conclude that the PRP is included in the surgical repair. There is no actual conflict relied upon by claimant as the NCCI are silent on this coding pair. NCCI would control if there were a conflict between the AMA and the NCCI, but there is, in fact, no conflict. As such, I find that the PRP is properly considered included in this case. It is noted that CPT can be considered an included service, but would not be so in this case as the debridement procedure did not occur in the same (subacromial) space. CPT billed by the surgical center (but not the surgeon) is not permitted. The NCCI specifically edit this procedure and thus, CPT is not reimbursable. N.J.A.C. 11: (f) advises that the following shall apply to multiple and bilateral surgeries (CPT through 69999), co-surgeries and assistant surgeons: 1. For multiple surgeries, rank the surgical procedures in descending order by the fee amount, using the fee schedule or UCR as appropriate. The highest valued procedure is reimbursed at 100 percent of the eligible charge. Additional procedures are reported with the modifier -51 and are reimbursed at 50 percent of the eligible charge. If any of the multiple surgeries are bilateral surgeries using the modifier -50, consider the bilateral procedure at 150 percent as one payment amount, rank this with the remaining procedures, and apply the appropriate multiple surgery reductions. Thus, the surgeon is owed reimbursement for CPT (100% as the highest fee schedule rate), (50%) and (50%). Thus, the surgeon is owed $6, less the payment of CPT at $2, or an additional $3, for services on 8/5/11. Per N.J.A.C 11:29.4(f)(5) advises that 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. If the assistant is not a physician, reimbursement shall be 85% of the 20%. Thus, the assistant non-physician is owed $1, less payment of $ or an additional $ Similarly, surgical centers are subject to multiple procedure reductions. N.J.A.C. 11:3-29.4(q) provides: When multiple procedures are performed in an ASC in the same operative session, the ASC facility fee for the procedure with the highest payment group number is reimbursed at 100 percent and reimbursement of any additional procedure furnished in the same session is 50 percent of the applicable facility fee. As to the appropriate Group rate, CPT and CPT are assigned Group 3 rates. CPT is not assigned a Group rate. Claimant asserts Group 5 is the correct reimbursement rate. Respondent maintains that the code should be paid at Group 3 as it is a similar service to the others. Further, the fee schedule applicable to physicians assigns the highest reimbursement to CPT as between all the codes. NJ Page 6 of 9

7 As to surgical facility rates, N.J.A.C (o) notes that: ASC facility fee group numbers are indicated by CPT code on the physician s fee schedule, subchapter Appendix, Exhibit 1. The facility fees for each ASC group are listed in subchapter Appendix, Exhibit 7. If a procedure can be performed in an ASC but it is not listed in the physician s fee schedule, the ASC facility fee for the procedure shall be the fee group in Appendix, Exhibit 7 that includes procedures similar to the unlisted procedure. For example, if an injection code is not included in Appendix Exhibit 7, the facility fee for the procedure would be the same as for other injection codes that have a group number. In no case, shall a facility fee be greater than the highest facility fee on the schedule (Group 9). If a CPT code is subsequently assigned an ASC group number by Medicare, as found in the facility fee for that code shall be that of the same group number in Appendix, Exhibit 7. The ASC facility fee includes services that would be covered if the service were furnished in a hospital on an inpatient or outpatient basis. There is no medical basis submitted by the facility to support the assignment of Group 5 to CPT There are clearly similar procedures in the shoulder that are all assigned Group 3 reimbursement. As such, I find that CPT should be paid at Group 3 as well. Thus, one code would be paid at 100% and the other codes would be reimbursable at 50%. Thus, the surgical center would be owed $3, less payment of $1, or an additional $1, The surgeon billed for a follow up exam and x-rays on 10/4/11. The AMA assigns a 90 day global period to the surgery. N.J.A.C. 11:3-29.4(j) states that: For surgery and many other procedures, it is established practice to include follow-up care and visits as part of the basic procedure charge. Such charges shall not be subject to additional billings. The existence of a CPT code, per se, does not imply the right to receive separate compensation for the procedure/sub-procedure so described. If a procedure is judged to be part of the primary procedure, only the charges for the primary procedure are eligible. As identified in CPT, separate procedures are commonly carried out as an integral part of another procedure. They shall not be billed in conjunction with the other procedure, but may be billed when performed independently of the other procedure. As such, I find that the services on 10/4/11 are within the global period for follow up services (not limited to exams) and thus, date of service 10/4/11 is denied. I find that the claimant to be a prevailing party and I award attorney s fees and costs. An award of attorney's fees to a successful claimant is not mandatory but lies within the discretion of the Dispute Resolution Professional as provided for under N.J.A.C. 11: In determining the proper amount of fees, "the most useful starting point... is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." H.I.P. v. K. Hovnanian at Mahwah VI, Inc., 291 N.J. Super. 144, 157 (App. Div. 1996); Rendine v. Pantzer, 141 N.J. 292, (1995); Szczepanski v. Newcomb Med. Ctr., Inc., 141 N.J. 346, 354 (1995); Furst v. Einstein Moomjy, Inc., et al., 182 N.J. 1, (2004); NJ Page 7 of 9

8 Fee shifting cases address the appropriate calculation and consideration of the lodestar - the number of hours reasonably or unreasonably 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. See Rendine, supra at ; Szczepanski, supra 346 (1995); Furst, supra, 1 (2004); Allstate Ins. Co. v. Sabato, 380 N.J. Super. 463, (App. Div. 2005). Depending on the evaluation of factors set forth in R.P.C. 1.5 as well as fee shifting cases, the fact finder is given discretion to adjust the fees upward or downward. H.I.P., supra, at 158, 160; Enright v. Lubow, 215 N.J. Super. 306 (App. Div. 1987); Scullion v. State Farm Ins. Co., 345 N.J. Super. 431, (App. Div. 2001). Having reviewed the Certification of Services submitted by claimant (7.25 hours at $350 per hour plus paralegal time) and considered the opposition of respondent; I award $1,250 in fees and $ in filing and service costs. Paralegal services are not attorney services. This represents a reduction in the hourly rate and hours billed based on respondent's arguments. The fees awarded are in conformity with guidelines/factors set forth in R.P.C. 1.5 as well as fee shifting guidance expressed in case law and the new regulation. Specifically, consideration has been given, but not limited to, the novelty and difficulty of the questions involved, the skill requisite to perform the legal services properly, the bona fides of the defenses, the fees customarily charged in the locality for similar legal services, the amount involved and the results obtained, as well as the experience, reputation and ability of the lawyer performing the service. The hourly fee must be considered reasonable based on a review of these factors as does the total fee award. In Rendine, supra, 338, it is noted that the Court acknowledged that an attorney can expect a higher fee/higher hourly rate when compensation is contingent upon success. Several issues were presented, but the amount was not great. Counsel appeared telephonically. Counsel represented two providers in the same matter such that certain entries are duplicative, i.e., hearing time or review of pre-hearing submission of the respondent. In this regard, the total hours expended by counsel would be considered unreasonable for the claim awarded and thus, a full fee award as requested is not warranted. Certain counsel in the claimant attorney s office have considerable experience in this area of law supporting an hourly rate as billed, but other attorneys working on the file do not. A detailed submission was provided. Thus, based on the result obtained, issues involved and preparation in this matter as well as fee shifting factors, the fees are appropriate. Interest is mandatory on overdue claims. N.J.S.A. 39:6A-5(h). Respondent is to calculate interest upon payment per its receipt of the bills and statutorily mandated rates. Therefore, the DRP ORDERS: 1. Medical Expense Benefits: Awarded: Disposition of Claims Submitted Medical Provider Amount Claimed Amount Awarded Payable To Advanced Orthopedics and Sports Medicine Center $7, $4, Advanced Orthopedics and Sports Medicine Center NJ Page 8 of 9

9 Subject to co-payment and deductible. 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.: Respondent is to calculate interest upon payment per its receipt of the bills and statutorily mandated rates. 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: $ 1,250 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: 06/24/13. NJ Page 9 of 9

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