Florida Tort Reform Usual Customary, Reasonable (UCR) Charges for Medical Bills

Florida Tort Reform

According to legal articles regarding Florida’s 2023 tort reform, [House Bill 837 (HB 837)], “Past medical care. For past medical care that has been paid by insurance, evidence will be limited to the amount paid for the medical expenses, regardless of the source of payment.  The evidence to prove past medical care that has not been paid depends on whether the plaintiff has insurance, Medicare, Medicaid, or no insurance.” [i]  Based on my experience, experts should avoid speculative analysis, and the explanation of the expert methodology should consider specific provisions:

  1. Florida Tort Reform House Bill 837 (HB 837) provides, “If [emphasis added] the party has insurance other than Medicare or Medicaid, evidence is limited to the amount the insurer is required to pay [emphasis added] the medical provider in satisfaction of the treatment.” [ii] In this scenario, a large sample size of data from actual payments to providers for the same procedures in the same year the plaintiff received, since fee schedules on what an insurer is “required” to pay may depend on unknowable scenarios that may vary by health plan, such as coverage determinations, modifiers to CPT codes, place of service, billed units versus allowable units, laboratory panels, unbundling determinations (see also my discussion below regarding the Affordable Care Act prescribed provisions for insurance, such as Out Of Pocket Maximums (“OOPM”), out-of-network, Essential Health Benefits, and Minimum Essential Coverage (“MEC”), provider networks,  and pre-existing conditions).
  2. HB 837 also provides, “… the party has insurance but opts to treat under a letter of protection. In that case, evidence is limited to the amount the insurer would have paid [emphasis added] under the policy if the party utilized their insurance would be admissible, plus the claimant’s share of medical expenses under the insurance contract, such as copays and coinsurance.” [iii] Similar to the first example, in this scenario, a large sample size of data from actual payments to providers for the same procedures in the same year the plaintiff received.
  3. HB 837 also provides, “If [emphasis added] the party has no insurance, evidence is limited to [emphasis added] 120% of the Medicare reimbursement rate at the time of trial. If no Medicare reimbursement rate exists for the services, the admissible amount is 170% of the applicable state Medicaid rate.” [iv] If the patient has no insurance, I can apply a multiple of the Medicare or Medicaid rate, but this rate may or may not be higher than commercial rates.  To avoid speculation when future insurance is unknown, I use a large sample of data on what providers accept as payment in full in the same geography for the same procedure in the same year the plaintiff received care. In future care scenarios, I provide opinions in the current year’s dollars.  We perform a validity check to determine whether my findings are at or below 120% of Medicare.
  4. HB 837 also states, “If the party treats under a letter of protection and that bill is sold to a third party, the amount is limited to what the third party paid to purchase the bill.” [v] This is unknowable to an expert, and it is best not to speculate on what the purchase rate might be unless that data of an actual sale of a letter of protection or lien is.  To avoid speculation when future insurance is unknown, use of a large set of data on what providers accept as payment in full in the same geography for the same procedure in the same year the plaintiff received care. In future care scenarios, I provide opinions in the current year’s dollars.
  5. HB 837 provides, “Plaintiffs will also be able to offer any evidence of reasonable amounts billed to the claimant for medically necessary treatment or services.” [vi] As noted, we perform UCR charges
  6. HB 837 provides, “Future medical care. Evidence relating to future medical treatment will be handled similarly. In a case where the party has insurance other than Medicare or Medicaid, evidence of the amount the insurer would be required to pay the medical provider in satisfaction of the treatment is admissible. If the party is without insurance, evidence is limited to 120% of the Medicare reimbursement rate at the time of trial for such treatment …” [vii]  As noted above, I perform a validity check to determine whether my findings are at or below 120% of Medicare.

Florida Tort Reform is Silent Regarding Certain Costs to the Insured Under the Affordable Care Act prescribed provisions for insurance, such as Out Of Pocket Maximums (“OOPM”), Out-of-Network, Essential Health Benefits, Minimum Essential Coverage (“MEC”), Metal Plans with Varying Actuarial Levels, Plan Provider Networks,  and Pre-Existing Conditions

Several factors are not allowed for in the Florida Tort Reform that are components of the Affordable Care Act.  These factors may indicate that, above and beyond what providers accept, there may be additional responsibility to the patient.

ACA Broadened Access to Insurance and Covered Benefits in Several Ways: Coverage of Pre-Existing Conditions, MEC, Cost Sharing, ADA

1.     Minimum Essential Coverage (MEC)

2.     Examples of qualifying health coverage that meet the MEC requirement

3.     Benefits, Cost-Sharing for People with Disabilities in Medicaid, ACA Marketplace

Insureds are Not Protected by an OUT-OF-POCKET Maximum (OOPM) if they receive Medicare Out-of-Network

Despite the Improved Coverage under the ACA, Insureds are Not Protected by a Out of out-of-pocket maximum (OOPM) if they Receive Medical Care “Out-of-Network,” Meaning outside the contracted provider network of the health plan that covers them.

Patient Responsibility for Out-of-Network Care

Patient Responsibility Factors with High-Deductible Plans

Co-Insurance in Health Plans – Patient Responsibility Thresholds

Co-Pays for Health Plans – Patient Responsibility Thresholds

Analysis of HCA Charges in this case, using in-network and out-of-network examples

[i] Elizabeth K. Hernandez is an insurance litigation trial attorney and managing partner at Matthiesen, Wickert & Lehrer’s Jacksonville, Florida, branch office. Elizabeth is licensed to practice in Florida, and her practice focuses on complex property and casualty subrogation, workers’ compensation subrogation, and automobile subrogation..  See https://www.mwl-law.com/sweeping-florida-tort-reform-bill-signed-into-law/#:~:text=If%20the%20party%20is%20without,or%20will%20actually%20be%20paid

[ii] Id.

[iii] Id.

[iv] Id.

[v] Id.

[vi] Id.

[vii] Id.

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Michael F. Arrigo

Michael Arrigo, an expert witness, and healthcare executive, brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health I.T., and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations that provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and billing, fraud damages, and electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, malpractice, and insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software S.A. (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for the top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls I.T. audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto-economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and published in Healthcare I.T. News. Mr. Arrigo serves as a member of the board of directors of a publicly traded company in the healthcare and data analytics industry, where his duties include: member, audit committee; chair, compensation committee; member, special committee.

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