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Spine Care Delaware, LLC v. State Farm Mutual Automobile Insurance Co.

Superior Court of Delaware, Kent

October 29, 2019

SPINE CARE DELAWARE, LLC, Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and STATE FARM FIRE AND CASUALTY COMPANY, Defendants.

          Submitted: August 26, 2019

         Upon Plaintiffs Motion for Summary Judgment GRANTED

         Upon Defendants' Motion for Summary Judgment DENIED

          John S. Spadaro, Esquire, John Sheehan Spadaro, LLC, Smyrna, Delaware, Attorney for Plaintiff.

          Colin M. Shalk, Esquire, Casarino Christman Shalk Ransom & Doss, P.A., Wilmington, Delaware, Attorney for Defendants.

          Kyle G.A. Wallace, Esquire, (pro hac vice) and Gavin Reinke, Esquire, (pro hac vice), Alton & Bird LLP, Atlanta, Georgia, Of Counsel for Defendants.

          OPINION AND ORDER

          NOEL EASON PRIMOS JUDGE

         Spine Care Delaware, LLC (hereinafter "Spine Care"), has filed a complaint for declaratory relief against State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company (hereinafter collectively "State Farm"), seeking a judicial declaration as follows:

a. When the defendants pay [Spine Care] for covered, [Personal Injury Protection]-related medical expenses, they must pay any reasonable amount charged, consistent with 21 Del. C. § 2118(a)(2).
b. The defendants' practice of capping such payments at the Medicare reimbursement rate is inconsistent with section 2118(a)(2); results in unreasonably reduced payments; and is therefore unlawful.[1]

         Currently before the Court is Spine Care's motion for summary judgment. The Court has determined that Spine Care is entitled to summary judgment on the relief sought in its complaint.[2]

         I. Stipulated Facts

         Spine Care is an ambulatory surgical center (hereinafter "ASC") that operates a facility in which independent physicians perform minimally invasive spinal injections on patients who have suffered injury in automobile accidents. Some of these patients are insureds through Delaware Personal Injury Protection (hereinafter "PIP") coverage. State Farm is an insurance provider that provides PIP coverage to Delawareans.

         Spine Care's patients may choose from a variety of treatment procedures, including bilateral[3] and multilevel[4] spinal injections. During a bilateral or multilevel spinal injection, some tasks are performed only once, despite the fact that the procedure covers two sides of the spine or multiple spinal levels. These non-repeated tasks include the preoperative assessment process, intravenous access on the patient, administration of intravenous antibiotics, and administration of preoperative medications.[5]

         Spine Care charges a facility fee for each medical procedure that is comparable to those of its two New Castle County competitors. Specifically, Spine Care's fees are less than those of one competitor, but more than those of the other competitor. Spine Care bills in full for each injection even when multiple injections are performed in the same procedure. In other words, Spine Care does not provide a discount on subsequent injections.

         To generate a bill, Spine Care utilizes Current Procedural Terminology (hereinafter "CPT") codes. The CPT codes are billing codes, copyrighted by the American Medical Association, to classify medical procedures. Each CPT code corresponds to a specific medical procedure. After a physician at Spine Care performs a spinal injection procedure, he or she uses the CPT codes to indicate which injections were performed. The CPT codes are written on a billing sheet, which is sent to Spine Care's billing department. The billing department reviews the CPT codes on the billing sheet and generates a bill based on Spine Care's prices for each type of injection, which it then submits to the patient's insurer.[6]

         When State Farm receives a bill from Spine Care, it sometimes applies multiple payment reductions (hereinafter "MPRs") to the bills for bilateral and multilevel spinal injections and thereby fails to pay the bills in full.[7] State Farm applies the Medicare Claim Processing Guidelines as the basis for its MPRs, and justifies its decision by arguing that it is common practice in the industry for insurers to apply MPRs.

         Under the Medicare Claim Processing Guidelines, an ASC that performed a multilevel procedure is paid one hundred percent of the highest paying procedure and fifty percent of the payment rate for other procedures.[8] For a bilateral procedure, the ASC is paid one hundred percent for one procedure, and fifty percent for the other procedure.[9]

         Many insurers apply MPRs to bills they receive from healthcare providers for bilateral or multilevel spinal injections.[10] Some, like State Farm, use the Medicare Claim Processing Guidelines as their basis for MPRs, while others use a different method to determine the appropriate level of MPRs.[11] For example, for bilateral injections, some insurers reimburse at less than fifty percent for the second injection.[12] For multilevel injections, some insurers pay twenty-five percent for each injection after two.[13]

         II. Questions Properly Before this Court

         Spine Care's motion seeks summary judgment "to this effect: that [Spine Care's] fees for bilateral and multilevel spinal injections are reasonable." This is not, however, the relief that Spine Care seeks in its complaint: there, Spine Care requests a declaration that (1) State Farm must pay any reasonable amount charged by Spine Care for PIP-related medical expenses, and (2) State Farm's practice of capping its payments at the Medicare reimbursement rate (in other words, using the MPRs imposed by the Medicare Guidelines) is unlawful.

         It is evident that Spine Care, like State Farm, seeks summary judgment on all claims in this litigation rather than partial summary judgment.[14] It is also evident, viewing the record before the Court, that Spine Care is entitled to summary judgment on the relief sought in its complaint. Therefore, denying Spine Care summary judgment because the relief requested in its motion differs from that in its complaint would be exalting form over substance. The matter is ripe for decision, and the Court will resolve it for the reasons that follow.[15]

         III. Summary Judgment Standard

         Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."[16] When the parties have filed cross motions for summary judgment and have not argued that there is any issue of material fact, this Court "shall deem the motions to be the equivalent of a stipulation for decision on the merits based on the record submitted with the motions."[17] In such a procedural setting, the parties are conceding the absence of any ...


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