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Responding To The Coronavirus

By | Compliance, COVID-19 | No Comments

Although the CDC has released new safety guidelines for individuals who have been fully vaccinated, doctors offices should note that the recent changes do not apply to healthcare personnel while at work and all patients while they are being cared for in a healthcare setting.

With some states reopening and COVID mandates being lifted, what are the latest CDC requirements for keeping patients and staff safe while in your office setting?

Masking Protocols:

Some patients refuse to wear masks and may not understand that the CDC’s lifting of masking protocols for fully vaccinated patients does not apply to healthcare settings.

Thus, when making appointments for in-office visits, practice staff should continue to set office expectations prior to coming into the office regarding established infection control protocol set by the CDC.

Additionally, a sign posted on the front door and in the reception area will help to alert patients that the masking protocols are still in effect.

If a patient is uncooperative upon arrival, healthcare providers should ask the patient to step aside to a private area where are you can address the patient’s concerns.

If the patient gets angry, let them know that you are obligated to follow guidelines set forth by the CDC as well as other government agencies, to ensure everyone’s safety.

If the patient becomes hostile or uncooperative, you always have the right to suggest that the patient seek care elsewhere. But remember, that if you decide to terminate the doctor patient relationship over this issue, it is critical that you end the relationship in a manner that will not lead to claims of discrimination or patient abandonment.

Social Distancing:

The CDC still recommends physical distancing within your facility and requires that patients sit at least six feet or more apart. If it is practical, you could ask patients to wait in their car and text them when you’re ready to see them.

Ask anyone accompanying the patient to wait in the car during the appointment if possible.

Do not allow staff members who are sick, have been sick or have sick family members to come to the office.

Environmental Infection Control Protocol:

  • Routinely clean and disinfect frequently touched surfaces, treatment tables or objects. Cleaning guidelines vary based on devices and surfaces being cleaned.
  • Remove magazines and toys from the waiting room.
  • Routinely disinfect the waiting room and bathrooms throughout the day.
  • Develop a cleaning schedule and checklist for your facility, and document compliance in your administrative files that the cleaning schedule is followed.
  • Provide approved face masks to patients and all caregivers and staff to use.
  • Have alcohol-based hand rub available in the reception area, waiting room, patient care and restroom areas.

Patient Screening Protocol:

Screen patients calling to schedule an appointment by asking them:

  1. If they or anyone in their family has a fever or has had one in the last two weeks.
  2. Have they or family members had any symptoms of a cold or flu?
  3. Have they traveled abroad in the last two weeks?
  4. Have they been near anyone who has potentially had the virus through their
    family or work?

For individuals entering your facility, query all patients about symptoms of coronavirus, whether in written form or verbally by your staff, take their temperature, and then document findings in the soap note on each visit.

For example:

  • “The patient was questioned with regards to recent travel and exposure to illness including COVID-19.
  • The patient denies any close contact with individuals who have confirmed cases of coronavirus and recent travel to high-risk areas within the last 14 days.
  • The patient denies the following symptoms: fever or chills, cough, shortness of breath,
    fatigue, headache, new loss of taste or smell, sore throat, congestion or runny nose, nausea or vomiting or diarrhea.
  • Temp: 98.6″

Office Preparedness Protocol:

  • Design a COVID-19 office management plan.
  • Educate staff about coronavirus and why it is important to contain the outbreak.
  • Educate staff on facility policies and practices to minimize chance of exposure.
  • Train staff on how to advise patients about changes in office procedures (e.g., calling prior to arrival if the patient has any signs of a respiratory infection and taking appropriate preventive actions.
  • Prepare for office staff illness, absences, and/or quarantine by cross-training staff for all essential office and patient care functions.
  • Implement mechanisms and policies that promptly alert key facility staff about known suspected COVID-19 patients.
  • Keep updated lists of staff and patients to identify those at risk in the event of an exposure.


OSHA released its new Emergency Temporary Standard (ETS) for COVID on June 10, 2021, with an effective date of June 15. Impacted healthcare employers are expected to comply with most requirements within 14 days of publication and within 30 days for the remainder of the requirements (e.g., employee training).

OSHA’s COVID-19 Healthcare Emergency Temporary Standard (ETS),29 CFR 1910.502 paragraph (c), requires employers to develop and implement a COVID-19 plan for each workplace to protect workers from COVID-19.

Additionally, if an employer has more than 10 employees, the plan must be written.

Fortunately, most offices will not be affected by OSHA’s COVID-19 Healthcare ETS requirements.

To determine if the new mandate applies to your workplace or portions of your workplace, answer the following questions.

  1. Is the workplace a setting where any employee provides healthcare services or healthcare support services?
  2. Does the workplace meet all the following conditions?
  3. It is a non-hospital ambulatory care setting?
  4. Are all non-employees are screened prior to entry?
  5. People with suspected or confirmed COVID-19 are not permitted to enter?

If you answered yes to all of the above than the ETS does not apply to your workplace?

In conclusion, make sure that both staff and patients are aware of your offices policies regarding the SARS-CoV-2 virus.

1. Advise them of the precautions you are taking to provide a safe workplace and give them the opportunity to voice any concerns.

2. Document your compliance with the CDC protocols and employee training on COVID office policies and procedures.

3. Develop a cleaning schedule and checklist for your facility, and document compliance with CDC requirements that the cleaning schedule is followed.

4. Make sure that your office staff is following patient screening protocol and document patient screening procedures in your S.O.A.P notes.

Remember that the Occupational Safety and Health Act (“OSHA”) requires employers to provide employees with a workplace free from recognized hazards that are causing or are likely to cause death or serious physical harm.

Failure to comply with applicable laws, including reporting and investigative demands, is grounds for revoking not only your license to practice but also your office’s operating license.

If you have any questions, don’t hesitate contacting Compliance & Auditing Services.

The Use and Understanding Of X{EPSU} Modifiers

By | Compliance, Insurance Coding | No Comments

I’ve been getting a lot of questions about the -59 modifier and the new X modifiers, so I thought I would take some time here to explain the use of these modifiers and to let you know why most insurers, including Medicare, still continue to use the -59 modifier.

Currently, providers can use the -59 modifier to indicate that a code represents a service that is separate and distinct from another service with which it would usually be considered to be bundled.

The -59 modifier is the most commonly used and commonly abused modifier. According to 2013 CERT Report data, incorrect -59 modifier usage amounts to a $77 million per year overpayment.

Because of this, CMS believes that more precise coding options are needed to reduce the errors associated with this overpayment.

As a result, CMS established the following four new HCPCS modifiers, referred to collectively as -X{EPSU} modifiers, to define specific subsets of the -59 modifier:

  • XE – “Separate encounter.” A service that is distinct because it occurred during a separate encounter. This modifier should only be used to describe separate encounters on the same date of service.
  • XP – “Separate Practitioner.” A service that is distinct because it was performed by a different practitioner.
  • XS – “Separate Structure.” A service that is distinct because it was performed on a separate anatomical area.
  • XU – “Unusual Non-Overlapping Service.” The use of a service that is distinct because it does not overlap usual components of the main service.

These X{EPSU} modifiers are intended to provide greater reporting specificity.

Though CMS will continue to recognize the -59 modifier, the Current Procedural Terminology (CPT) instructions state that the -59 modifier should not be used when a more descriptive modifier is available.
In some instances CMS may selectively require a more specific – X modifier for billing procedures at high risk for incorrect billing.

Because the X modifiers are more specific versions of the -59 modifier, it would be incorrect to include both modifiers on the same line.

Though the use of the new modifiers was scheduled to start January 1, 2015, don’t hold your breath.

Here’s why:

  • Chiropractors are only paid for 98940, 98941 and 98942. None of your adjustment codes would require modifier -59.
  • For now, secondary billing for Medicare is uncertain. Secondary (private) payers haven’t yet stated that they are willing to accept the XE, XS, XP or XU modifiers. It’s likely they will adopt the same rule sooner or later, so keep an eye out for changes.
  • To date, private payers are not requiring the new modifiers. Providers such as BCBS, Aetna, and Cigna haven’t yet stated that they are willing to accept the XE, XS, XP or XU modifiers. It is likely that they will in the future so watch for updates from private payers.


Though it is likely that the -59 Modifier days are numbered, until then continue to code as usual, with modifier -59.

The “Compliance Made Easy” program is the most complete course on office compliance and includes how to document the correct E/M code.

All the Best,
Dr. John Davenport
Chief Compliance Officer

Preparing For Significant Revisions To E/M Office Visits 2021

By | Compliance, Insurance Coding | No Comments

In part one of this article we learned that starting January 1st, the American Medical Association implemented major changes to the 2021 Current Procedural Terminology (CPT) code for outpatient evaluation and management (E/M) services.

The stated reason for the need to change the Evaluation and Management (E/M) guidelines was that the guidelines did little to support patient care and that the old E/M guidelines consume too much of the physician’s time and didn’t reflect the actual work done by the physician.

While the current E/M code set guidelines use the 3 key elements of history, examination and medical decision-making to determine the correct E/M code level to bill, The new guidelines will allow practitioners to document office and outpatient E/M level codes 99202—99215 based on the total time spent on the date of the encounter or medical decision making (MDM).

Additionally, because of the new change, it was necessary that the descriptions and guidelines surrounding MDM and time be redefined for better clarity.

For example, when time is used to select the appropriate level for E/M services codes, the following are the time codes used as a determining factor for each category:

New patient codes:

 Established patient codes:

99202: 15-29 minutes 99212: 10-19 minutes
99203: 30-44 minutes 99213: 20-29 minutes
99204: 45-59 minutes 99214: 30-39 minutes

The E/M services for which these guidelines apply require a face-to-face encounter with the physician and remember to count only the practitioner time on the calendar day the patient was seen. Do not include time on any other day, and don’t include staff time.

With that said, in the first part of this article we reviewed the descriptors and guidelines that support the use of time to select the appropriate level for E/M services in depth.

If you didn’t read part one of this article, regarding the use of time, read the last newsletter HERE. Knowing this information and the differences should help you in deciding which method would be best for your office.

The purpose of this article is to learn the descriptors and guidelines that support the use of a Medical Decision Making (MDM) E/M code set.

In general, MDM is related to the process of establishing a diagnosis, assessing the status of a condition, and selecting a management option. MDM is defined by the following three elements:

  • The number and complexity of problem(s) addressed during the encounter.
  • The amount and/or complexity of data to be reviewed and analyzed. This data includes medical records, tests, and/or other information reviewed and considered for the date of the encounter and not a subsequent encounter.
  • The risk of complications, morbidity, and/ or mortality of patient management decisions made that are associated with the patient’s problem, diagnostic procedures, treatment and treatment alternatives at the time of the visit.

This includes the possible management options selected after sharing medical decision making and explaining both the risks and benefits of each management option with the patient, family and/or legal representative.

It’s also important to know the four levels of MDM recognized as part of the new 2021 E/M guidelines: straightforward, low, moderate, and high.

To determine the most appropriate level of MDM to report, the physician would review and meet the qualifications for each of the three elements of MDM.

To aid physicians in selecting the level of MDM for reporting the correct E/M service code, the AMA developed a guideline to assist in selecting the acceptable level of MDM.

The following guideline includes the four levels of medical decision making and the three elements of medical decision making.

Note that to qualify for a particular level of medical decision making, at least two of the three elements for that level of medical decision making must be met or exceeded.

Three Element Qualification Guide:

Level of MDM: Straightforward  (99202/99212)

  1. The number and complexity of problem(s) addressed during the encounter.
    • Minimal
      – 1 self-limited or minor problem
  1. Amount and/or Complexity of Data to be Reviewed and Analyzed.
    • Minimal or none
  1. Risk of Complications and/or Morbidity or Mortality of Patient Management.
    • Minimal risk of morbidity from additional diagnostic testing or treatment

Level of MDM: Low  (99203/99213)

  1. The number and complexity of problem(s) addressed during the encounter.
    • Low
      2 or more self-limited or minor problems or one or more of the following:

      • 1 stable chronic illness
      • 2 acute, uncomplicated illness or injury
  1. Amount and/or Complexity of Data to be Reviewed and Analyzed.
    • Limited (Must meet the requirements of at least 1 of the 2 categories)

Category 1: Tests and documents

  • Any combination of 2 from the following:
  • Review of prior external note(s) from each unique source*
  • Review of the result(s) of each unique test*
  • Ordering of each unique test*

Category 2: Assessment requiring an independent historian(s)
( An Independent historian is any individual (eg, parent, guardian, surrogate, spouse, witness) who provides a history in addition to a history provided by the patient who is unable to provide a complete or reliable history or because a confirmatory history is judged to be necessary.)

  1. Risk of Complications and/or Morbidity or Mortality of Patient Management.
    • Low risk of morbidity from additional diagnostic testing or treatment

Level of MDM: Moderate  (99204/99214)

  1. The number and complexity of problem(s) addressed during the encounter.
    • Moderate
      • 1 or more chronic illnesses with exacerbation progression, or side effects of treatment or one or more of the following:
        • 2 or more stable chronic illnesses
        • 1 undiagnosed new problem with uncertain prognosis
        • 1 acute illness with systemic symptoms
        • 1 acute complicated injury
  1. Amount and/or Complexity of Data to be Reviewed and Analyzed.
    • (Must meet the requirements of at least 1 out of 3 categories)

Category 1: Tests, documents, or independent historian(s)

  • Any combination of 3 from the following:
  • Review of prior external note(s) from each unique source
  • Review of the result(s) of each unique test and ordering of each unique test
  • Assessment requiring an independent historian(s)

Category 2: Independent interpretation of tests

  • Independent interpretation of a test performed by another physician/other qualified healthcare professional (not separately reported)

Category 3: Discussion of management or test interpretation

  • Discussion of management or test interpretation with external physician/other qualified health care professional or appropriate source (not separately reported)
  1. Risk of Complications and/or Morbidity or Mortality of Patient Management.
    • Moderate risk of morbidity from additional diagnostic testing or treatment

Examples only:

  • Prescription drug management
  • Decision regarding minor surgery with identified patient or procedure risk factors
  • Decision regarding elective major surgery without identified patient or procedure risk factors
  • Diagnosis or treatment significantly limited by social determinants of health

In review, history exam is no longer a defining element when choosing the appropriate level of medical decision making. But it is important to understand that even though the nature and extent of the history and/or physical examination is determined by the treating physician, the guidelines still require that all E/M services include a medically appropriate history and or physical examination.

Remember that billing for outpatient evaluation and management (E/M) services is based on complexity as documented, and not based on implied or undocumented complexity.

All the Best,

Dr. John Davenport
Chief Compliance Officer

Compliance & Auditing Services

(800) 509-0538

Preparing For Significant Revisions To E/M Office Visits 2021

By | Compliance, Insurance Coding | No Comments

Starting January 1st, the American Medical Association (AMA) implemented major changes to the 2021 Current Procedural Terminology (CPT) code for outpatient evaluation and management (E/M) services.

The stated reason for the need to change the Evaluation and Management (E/M) guidelines, was that the guidelines do little to support patient care. Simply put, adherence to the old E/M guidelines consume a significant amount of the physician’s time and don’t necessarily reflect the actual work by the physician.

So, in accordance with President Trump’s executive order, directing federal agencies to cut red tape, CMS proposed revisions to the E/M rules to decrease administrative burden and make code level selection more intuitive. CMS feels this will improve payment accuracy and minimize the amount of note bloating from EHR copy and pasting of the same problem list day after day.

The current E/M code set includes guidelines on using the 3 key elements of history, examination and medical decision-making to determine the correct E/M code level to bill.

With that said, starting on January 1st, 2021 practitioners will now document office and outpatient E/M level codes 99202—99215 based on total time on medical decision making (MDM) or the total time on the date of the encounter.

Additionally, because of the new change, it was necessary that the descriptions and guidelines surrounding MDM and time be redefined for better clarity.

Starting with time, except for 99211, time alone may be used to select the appropriate code level for the office or other outpatient E/M services codes 99202 – 99215 whether or not counseling and/or coordination of care dominates the service.

When time is used to select the appropriate level for E/M services codes, time is defined by the service descriptors in each category.

The E/M services for which these guidelines apply require a face-to-face encounter with the physician.

Here are the major points from the 2021 guidelines for Time:

  • You will be able to use time alone to select the correct code from 99202-99205 and 99212-99215. Note that 99211 is not in that list because no time is listed in that descriptor.
  • The 2021 Time guidelines explain that for 99202-99205 and 99212-99215, total time on the encounter date includes both face-to-face and non-face-to-face time spent by the provider on the same day as the visit.
  • When you start counting time for the 2021 codes, you should not include time spent on services you report separately. For instance, if you report care coordination or x-rays using a separate code, you should not include that in the time for the E/M code.

This is because the performance and/or interpretation of diagnostic tests/studies during a patient encounter are bundled together under a separate billing code and not included in determining the levels of E/M services. Even so, it should be documented in your records.

  • The total time also will not include time for activities the clinical staff normally perform such as taking vitals.

Physician professional time includes the following activities, when performed:

  • Preparing to see the patient (eg, intake forms and studies from other providers)
  • Obtaining and/or reviewing separately obtained history
  • Performing a medically appropriate examination and/or evaluation
  • Counseling and educating the patient/family/caregiver
  • Ordering tests or other procedures
  • Referring and communicating with other healthcare professionals (when not separately reported)
  • Documenting clinical information in the patient’s health record
  • Care coordination (not separately reported)
  • Typically, because a chiropractor cannot justify the use of the 99205/99215 codes they will not be used.
  • If coding using the 99204/99214 codes, make sure that your documentation supports its use.

The following are the time codes used as a determining factor for each category:

New patient codes:

  • 99202: 15-29 minutes
  • 99203: 30-44 minutes
  • 99204: 45-59 minutes

Established patient codes:

  • 99212: 10-19 minutes
  • 99213: 20-29 minutes
  • 99214: 30-39 minutes


Remember to count only the practitioner time on the calendar day the patient was seen. Do not include time on any other day, and don’t include staff time.

Additionally, It isn’t necessary to note how much time was spent in each activity but the total time for the encounter.

Describe what was done, and document time in a single statement as in the example below.

“I spent 30 minutes reviewing the patient’s intake form, examining the patient, and documenting my diagnosis and findings in the record. I also discussed treatment with the patient, including the possible risk associated with treatment and alternatives to care. The patient stated that they understood the risk and requested that treatment be performed.”

  • Though a medically appropriate history and/or examination will not be part of the basis for code selection, history and exam findings that are pertinent to the visit should still be documented.
  • Physician documentation must accurately depict what occurred during the encounter, as you still need to be covered in the event of a lawsuit or post-payment audit.
  • It’s crucial to understand that your E/M documentation must support the medical necessity of the diagnosis and treatment provided.
  • When using time as a coding factor, if a physician reviews medical records or special studies from another source on the day of the encounter, they should document what specific records or studies and their origin.

Also, the physician should sign the document with their full name and credentials (eg, DC) to show that they reviewed them.

  • Keep in mind, the AMA does not process or pay claims and as such, they are not the final word on billing policies or payment guidelines. This means that though CMS is accepting the new E/M guidelines for 2021, single payers and commercial Insurance plans may not.

So, it is your responsibility to contact the individual commercial insurance providers and make sure that they are accepting the new guidelines.

Because starting in 2021 practitioners will document office and outpatient E/M level codes 99202—99215 based on time or medical decision making (MDM), part two of this article will review the requirements for medical decision making (MDM) and the different categories associated with each E/M level code.

Knowing this information and the differences should help you in deciding which method would be best for your office.

The “Compliance Made Easy” program is the most complete course on office compliance and includes how to document the correct E/M code.


All the Best,
Dr. John Davenport
Chief Compliance Officer

Compliance Consultant

Compliance Consultant Explains Active Treatment

By | Compliance, Compliance Consultant | No Comments

As a compliance consultant,I find that a high percentage of chiropractors are guilty of providing only passive therapies to their patients.

In fact, third-party payers have coined the phrase M.U.S.H. for chiropractic treatment. This is an acronym for manipulation, ultrasound, stem, and heat.

Due to the increasing amount of evidence-based research and increased scrutiny on the chiropractic profession by insurance carriers, prolonged use of passive therapies is frowned upon and could be a red flag for doctors.

Insurance carriers require providers to prove medical necessity of the treatment they provide and show a direct therapeutic relationship to the services rendered.


Based on research, carriers feel that prolonged passive therapy leads to dependence by the patient for symptom relief, and do nothing to improve the patient’s complaints in the long run.

Since passive therapies are typically used in the initial, acute phase of care to reduce pain and swelling, their clinical effectiveness tends to decline after one to two weeks of treatment.

In fact, the Council on Chiropractic Guidelines & Practice Parameters, stated, “Although passive care methods for pain or discomfort may be initially emphasized, “active” (ie, exercise) care should be increasingly integrated to increase function and return the patient to regular activities.”

It recommended that physicians limit the use of therapeutic modalities only to, “facilitate the shift from passive-to-active care and not dependency on passive modalities with limited evidence of efficacy.”

 As a compliance consultant, I tell my clients that when moving to active care, the goal of treatment is to improve functional deficits, increase the strength and endurance of a given area, and minimize the potential for re-injury or exacerbation of the patient’s chief complaint.

Therefore, Insurance carriers not only encourage active rehabilitative care, they see it as the natural progression of treatment and feel it justifies the medical necessity of longer treatment.

Additionally, encouraging patient participation in treatment incentivizes the patient to continue treatment once their pain has improved in an effort to prevent future problems.

It’s a win-win for everyone involved because improving the patient’s functional weakness is the best thing for your patients, and insurance companies pay more for active therapies than passive care.

Having taught human performance and sports rehabilitation on the college level, I know there are many different ways to approach active care besides having a full-size gym in your office or employing physical therapists or athletic trainers.

With a little knowledge, you can develop a viable rehab program in your office for less than $200.00. In addition, you make more money while minimizing denials, request for more information to justify treatment, and being flagged for an audit.

If you have any questions or would like additional information, don’t hesitate to contact one of our compliance consultants at 800-509-0538

Get Ready for Medicare Provider Enrollment Revalidation

By | Compliance, Medicare | No Comments

Section 6401 (a) of the Patient Protection and Affordable Care Act established a requirement for all enrolled providers to revalidate their Medicare enrollment information roughly every five years to prevent fraud within the Medicare system by ensuring that Medicare provider records are accurate.

Cycle 2 Revalidation began on February, 2016. Basically this means a physician’s maintenance of the Medicare billing privileges cycle. Simply put, revalidation is re-enrollment and all providers are required to revalidate their enrollment information.

If the provider doesn’t submit a complete revalidation application by their specific due date, the Medicare Administrative Contractor (MAC) may hold your Medicare payments or deactivate your Medicare billing privileges.

Typically, your Medicare Administrative Contractor (MAC) will send a revalidation notice within two to three months prior to your revalidation due date either by mail or to the email address reported on prior applications indicating the providers due date.

Note that your MAC must receive your enrollment application within 60 days of the revalidation request.

The best way to prevent a lapse in coverage is to verify your due date, listed on  Data.CMS.gov/revalidation. The list will include all enrolled providers and will display the provider’s revalidation due date. In addition, a crosswalk to the organizations that the individual provider reassigns benefits will also be available as well.

For providers not up for revalidation, the list will display a “TBD” (To Be Determined) in the due date field. This means the provider’s due date is more than 6 months away.

The list was revised on April 10, 2017. All dates are updated every 60 days at the beginning of the month and are listed up to 6 months in advance. Do not submit a revalidation if you have not received an email/mailed letter from your MAC requesting you to revalidate, or your due date is not listed on the CMS revalidation website. If you do, it will be considered an unsolicited revalidation and will be returned.

If you are within 2 months of the listed due date on the CMS revalidation website and have not received a notice from their MAC to revalidate, as a chiropractic consultant I recommend that you make every effort to submit your revalidation application immediately.

The most efficient way to submit your revalidation information is thru the Internet Based PECOS. Here you can review information currently on file, update and submit your revalidation and electronically sign after uploading the supporting documents. If you wish, you can just print out your revalidation , sign and date it  and then mail your paper certification along with supporting documentation to your Medicare Administrative Contractor (MAC).

It is important that providers check their due date immediately in order to avoid a hold on your Medicare payments.

If you have any questions or need help, don’t hesitate contacting the ACS or Dr. Davenport at complianceandauditingservices.com.

All the Best,

Dr. John Davenport DC, CCSP, FIAMA, MCSP, CIC

Certified Compliance and Insurance Consulting Services

Locum Tenens and Compliance

By | Compliance, Insurance Coding | No Comments

As the compliance officer for Compliance & Auditing Services, I receive questions from chiropractic physicians from all over the country on chiropractic compliance.

This question came to me from a doctor in Florida looking for guidance regarding office coverage. Dr. Jonathan asked, “If I have a doc covering my office that is not in-network when I am out of the office can I still bill under my license/insurance participation? I’m asking about Medicare as well.”

This isn’t the first time I have been asked this question, so to help the other doctors who follow this site for compliance information, here is the answer to the question on locum tenens doctors.

It is a general practice for physicians to retain substitute physicians to take over their professional practices when the regular physicians are absent for reasons such as illness, pregnancy, vacation, or continuing education.

These substitute physicians are generally referred to as “locum tenens” physicians and the regular physician generally pays the substitute physician a fixed amount per diem, with the substitute physician having the status of an independent contractor rather than of an employee.

Medicare and many third-party payers do allow physicians to bill for services performed by locum tenens physicians during their absence and for the regular physician to bill and receive payment for the substitute physician’s services as though he/she performed them.

Under Section 125(b) of the Social Security Act, a regular physician may bill for the services of a locum tenens physicians if:

  • The regular physician is unavailable to provide the services.
  • The Medicare beneficiary has arranged for or seeks to receive the visit services from the regular physician.
  • The regular physician pays the locum tenens for his/her services on a per diem or similar fee-for-time basis. You cannot pay a locum a salary or have a revenue based incentive payment agreement.
  • The locum physician does not provide or bill for services to Medicare patients over a continuous period of longer than 60 days.

Billing Procedures:

Medicare requires claims for services provided by a locum physician to include the Q6 modifier, which designates services were performed by alocum tenens physician, in box 24D of the CMS-1500 form. The regular physician’s provider identification number goes in box 24J.

Regarding all other insurance carriers, the billing procedures would typically be the same, as most carriers follow the same guidelines set forth by Medicare. It is important that you review the contract that you have with each insurance carrier that you are contracted with to make sure of their individual policies for locum physicians.

If you need a question answered or need help with office compliance, Compliance & Auditing Services is here to help. The certified specialist at Compliance & Auditing Services help chiropractors handle compliance issues and you set up a compliance program that meets all state and federal laws with confidence.

If you have any questions about Locum Tenens or  chiropractic compliance leave a comment or just call us.



Florida Compliance Court Ruling

By | Compliance | No Comments

file451297827287By now, most of you have heard bits and pieces about a Florida Court decision involving Allstate, and ultimately, your practice.  I wanted to take a minute and summarize what has really happened.

Beginning in 2008, Allstate has been reimbursing PIP claims at 200% of Medicare B fee schedule.  Allstate has been challenged about its “subject to” fee schedule language.  The argument has been that the language used by Allstate was insufficient in explaining to providers and insureds about how it would pay 200% of the Medicare fee schedule.

The First District Court of Appeal decided several months ago that Allstate had provided sufficient notice in its policy language, thereby supporting Allstate.

This week however, the Fourth District Court of Appeal found differently – and this is important.  Their opinion conflicts with the prior decision of the First Court of Appeal.  This is encouraging because it provides greater grounds for the Florida Supreme Court to review the first decision.

So, for providers hoping to recoup additional money from Allstate, this is encouraging, but it’s not yet a done deal.  The differing opinions of the two appellate courts provide reason for Supreme Court review; but this hasn’t happened yet.  So, be alert and hopeful, but keep it in perspective (To read the recent court decision in its entirety below)!

As always, feel free to contact me about compliance issues and current events related to the well being of your practice.  You can reach me via email: DrJohn@ComplianceandAuditingServices.com or the FCPA website.





Nos. 4D14-287, 4D14-288, 4D14-289, 4D14-290, 4D14-291, 4D14-292, 4D14-293, 4D14-294, 4D14-295, 4D14-296, 4D14-297, 4D14-298, 4D14-299, 4D14-300, 4D14-301, 4D14-302, 4D14-303, 4D14-304, 4D14-305, 4D14-306, 4D14-307, 4D14-308, 4D14-309, 4D14-310, 4D14-311, 4D14-312, 4D14-313, 4D14-314, 4D14-315, 4D14-316, 4D14-317 and 4D14-318

[August 19, 2015] Appeal from the County Court for the Fifteenth Judicial Circuit, Palm

Beach County; Ted 502012SC002031XX, 502012SC003172XX, 502012SC003679XX, 502012SC003690XX, 502012SC003696XX, 502012SC004809XX, 502012SC020766XX, 502012SC021284XX, 502012SC021797XX, 502013SC001002XX, 502013SC003154XX,

  1. Booras, Judge; 502012SC002035XX, 502012SC003182XX, 502012SC003682XX, 502012SC003692XX, 502012SC003732XX, 502012SC006658XX, 502012SC020782XX, 502012SC021295XX, 502012SC022899XX, 502013SC001003XX,

and 502013SC005090XX.

L.T. Case Nos. 502012SC003157XX, 502012SC003677XX, 502012SC003683XX, 502012SC003695XX, 502012SC004802XX, 502012SC007634XX, 502012SC020791XX, 502012SC021678XX, 502013SC000982XX, 502013SC001823XX,

Gary M. Farmer, Sr. of Farmer Jaffe Weissing Edwards Fistos & Lehrman P.L., Fort Lauderdale; David M. Caldevilla of De La Parte & Gilbert, P.A., Tampa; and Stephen Deitsch, William Foman and Lindsay Porak of Deitsch & Wright, P.A., Lake Worth, for appellants.

Suzanne Y. Labrit and Douglas G. Brehm of Shutts & Bowen LLP, Tampa; and Peter J. Valeta of Meckler Bulger Tilson Marick & Pearson LLP, Chicago, Illinois, for appellee.


This appeal comprises thirty-two consolidated cases in which PIP claims were brought by medical services providers (“the Providers”) against the appellee, Allstate Insurance Company (“Allstate”), under no- fault insurance policies issued to their insureds. At issue is whether, as asserted by the Providers, the language in the Allstate policy is ambiguous as to Allstate’s election to reimburse the Providers pursuant to certain Medicare fee schedules provided for in section 627.736(5)(a)2., Florida Statutes (2009). The trial court agreed with Allstate and found that the policy language was, in fact, not ambiguous and certified the following question to this court:

Whether the Defendant’s PIP insurance policy language is legally sufficient to authorize [Allstate] to apply the [Medicare fee schedule] reimbursement limitations set forth in section 627.736(5)(a)2., Florida Statutes.

We answer that question in the negative, finding the policy language to be inherently unclear and reverse the summary judgment entered in favor of Allstate.

The only dispute between the parties concerns the meaning of a particular endorsement to the policy. The policy provision language chosen by Allstate resulted in the trial court’s decision to enter the underlying summary judgment for Allstate.

The policy provides the following in pertinent part with respect to PIP benefits:

Allstate will pay to or on behalf of the injured person the following benefits:

  1. Medical Expenses
    Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices, and medically necessary ambulance, hospital, and nursing services.

An endorsement to the policy provides the following: Limits of Liability


Any amounts payable under this coverage shall be subject to any and all limitations, authorized by section 627.736, [which would apply a Medicare fee schedule limitation] or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including, but not limited to, all fee schedules.

(Emphasis added).

The Providers argue that the “shall be subject to” provision in the endorsement is ambiguous, as it is unclear whether Allstate has actually and in fact elected to limit its reimbursements to the Providers under the Medicare fee schedules as provided for in section 627.736(5)(a)2.-5., Florida Statutes (2009), or is simply announcing that it is reserving its right to elect to do so. They analogize the policy at issue here to the ones found lacking in Geico General Insurance Co. v. Virtual Imaging Services, Inc., 141 So. 3d 147 (Fla. 2013) (“Virtual Imaging”), and Kingsway Amigo Insurance Co. v. Ocean Health, Inc., 63 So. 3d 63 (Fla. 4th DCA 2011) (“Kingsway”). In those cases, the courts found that the bare reference to the PIP statute was insufficient to put the insured and providers on notice that the insurer was, in fact, electing to employ the Medicare fee schedules. The Providers argue the language in the instant policy is similarly vague and only permissive in nature and merely incorporates the PIP statute. Our decision hinges on interpretation of contract of insurance language; thus our review is de novo. See Virtual Imaging, 141 So. 3d at 152 (citations omitted).

Historical Context

Provisions of the PIP statute, section 627.736, Florida Statutes, are at the center of the instant controversy. The statute lays out the benefits that a personal injury protection policy must provide and the methods of calculating reimbursements thereunder. Subsection 627.736(1)(a), Florida Statutes (2012), provides that “[e]very insurance policy . . . shall provide personal injury protection” to specified individuals as follows: “Medical benefits – Eighty [80] percent of all reasonable expenses for medically necessary medical . . . services.” As recognized by the Florida Supreme Court in Virtual Imaging, this provision requiring reimbursement of eighty percent of reasonable expenses for medically necessary services is “a basic coverage mandate” which is “the heart of the PIP statute’s coverage requirements.” 141 So. 3d at 155. Section 627.736(5)(a)1., Florida Statutes (2009), recites factors to consider in determining reasonableness.


As explained in Virtual Imaging, the statute was amended in 2008 to provide an additional method of calculating reasonableness. Virtual Imaging, 141 So. 3d at 156. Section 627.736(5)(a)2., Florida Statutes (2008), provides an alternative way in which “[t]he insurer may limit reimbursement to 80 percent” of a recited schedule of maximum charges, many of which are tied to Medicare fee schedules. For example, subsection 627.736(5)(a)2.f., Florida Statutes (2008), provides that insurers may limit reimbursement to “200 percent of the allowable amount under the participating physicians schedule of Medicare Part B.”1

In Virtual Imaging, the Florida Supreme Court explained that an insurer’s Medicare fee schedule election under section 627.736(5)(a)2. does not conflict with the basic “reasonable expenses” coverage mandate of section 627.736(1). Id. at 157. By electing to utilize the Medicare fee schedules, an insurer meets the mandate of providing “reasonable expenses” coverage. Id. The court further explained the effect of the 2008 amendments:

[T]he 2008 amendments provided an alternative, permissive way for an insurer to calculate reimbursements to satisfy the PIP statute’s reasonable medical expenses coverage mandate, but did not set forth the only methodology for doing so.

The 2008 fee schedule amendments used the word “may” to describe an insurer’s ability to limit reimbursements based on the Medicare fee schedules. See § 627.736(5)(a)2., Fla. Stat. . . . [I]f an insurer is not required to use the Medicare fee schedules as a method of calculating reimbursements, the insurer must have “recourse to some alternative means for determining a reimbursement amount” if it chooses not to use the Medicare fee schedules. . . .

This alternative calculation mechanism is the same mechanism that was in place before the Legislature amended the PIP statute to incorporate the Medicare fee schedules: in the event of a dispute, a fact-finder must determine whether

1 The statute was again amended in 2012 to add the following requirement: “Effective July 1, 2012, an insurer may limit payment as authorized by this paragraph only if the insurance policy includes a notice at the time of issuance or renewal that the insurer may limit payment pursuant to the schedule of charges specified in this paragraph.” Virtual Imaging, 141 So. 3d at 154 (emphasis in original) (quoting section 627.736(5)(a)5., Fla. Stat. (2012)).


the amount billed was reasonable. The permissive language of the 2008 amendments, therefore, plainly demonstrates that there are two different methodologies for calculating reimbursements to satisfy the PIP statute’s reasonable medical expenses coverage mandate.


Accordingly, we conclude that the 2008 amendments were clearly permissive and offered insurers a choice in dealing with their insureds as to whether to limit reimbursements based on the Medicare fee schedules or whether to continue to determine the reasonableness of provider charges for necessary medical services rendered to a PIP insured based on the factors enumerated in section 627.736(5)(a)1. In other words, we do not conclude that payment under section 627.736(5)(a)2. could never satisfy the PIP statute’s basic “reasonable expenses” coverage mandate, set forth in section 627.736(1). Instead, what we conclude is that the fee schedule payment calculation methodology in section 627.736(5)(a)2. was permissive.

Id. at 156-57 (footnote and internal citations omitted). Analysis

Insurance Contract Interpretation

The Florida Supreme Court has elaborated on insurance contract language interpretation:

Where the language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written. In construing insurance contracts, “courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect.” Courts should “avoid simply concentrating on certain limited provisions to the exclusion of the totality of others.” However, “[p]olicy language is considered to be ambiguous . . . if the language ‘is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage.’”


Washington Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013) ((alteration in original) (internal citations omitted). “Further, in order for an exclusion or limitation in a policy to be enforceable, the insurer must clearly and unambiguously draft a policy provision to achieve that result.” Virtual Imaging, 141 So. 3d at 157.

‘“Whether a document is ambiguous depends upon whether it is reasonably susceptible to more than one interpretation. However, a true ambiguity does not exist merely because a document can possibly be interpreted in more than one manner.’” Smith v. Shelton, 970 So. 2d 450, 451 (Fla. 4th DCA 2007) (citation omitted). “In the event policy provisions are ambiguous . . . then well-established rules of construction must be applied. The most basic of these rules is that ambiguous policy provisions are to be construed in favor of the insured and against their drafter, the insurer.” Discover Prop. & Cas. Ins. Co. v. Beach Cars of W. Palm, Inc., 929 So. 2d 729, 732 (Fla. 4th DCA 2006) (citations omitted).

Alleged Ambiguity of Subject Policy Language

The Providers argue that the language in the endorsement is ambiguous, and that the trial court’s ruling is contrary to Kingsway and Virtual Imaging. Those cases did not involve policies that referenced the Medicare fee schedules, as does the policy here. Instead, those policies broadly referenced the PIP statute. The policy in Kingsway “cite[d] the No-Fault Act, state[d] it will pay ‘80% of medical expenses,’ and define[d] medical expenses as those that it is required to pay ‘that are reasonable expenses for medically necessary . . . services.’” Kingsway, 63 So. 3d at 67. This court rejected the argument that “because the PIP statute is incorporated into the policy, [the insurance company] had the unilateral right to ignore the only payment methodology referenced in the policy.” Id. We adopted the trial court’s reasoning, which relied on State Farm Florida Insurance Co. v. Nichols, 21 So. 3d 904 (Fla. 5th DCA 2009):

If the [insurer] wanted to take advantage of the permissive fee schedule, it should have clearly and unambiguously selected that payment methodology in a manner so that the insured patient and health care providers would be aware of it.

Kingsway, 63 So. 3d at 68 (alteration in original).

In Virtual Imaging, the insurance policy also merely referenced the PIP statute and with no specific reference to the Medicare fee schedules. It provided the following:


Under Personal Injury Protection, the Company [GEICO] will pay, in accordance with, and subject to the terms, conditions, and exclusions of the Florida Motor Vehicle No- Fault Law, as amended, to or for the benefit of the injured person:

(a) 80% of medical expenses . . . .

Virtual Imaging, 141 So. 3d at 157. In finding that this language was not sufficient for the insurance company to utilize the fee schedule limits, the Florida Supreme Court pointed out that “[t]he . . . policy does not include any reference to the Medicare fee schedules . . . .” Id. at 158. The court agreed with the reasoning in Kingsway and held that in order to limit coverage to the Medicare fee schedules, “the insurer must clearly and unambiguously elect the permissive payment methodology . . . .” Id.

Here, providing that any amounts payable would be “subject to” “any and all limitations” authorized by the statute or any amendments thereto, Allstate did nothing more than state the obvious by indicating that there was a possibility (and the statutory authorization) for Allstate to apply a specific reimbursement limitation. The only reasonable way to read the language is as a general recital of Allstate’s reservation of its right to apply limitations authorized by law, with the accompanying and corresponding obligation to notify its policy holders of the election.

We cite to the solid reasoning contained in a final judgment penned by County Judge Robert W. Lee, who cogently parsed the language at dispute here and found it to be ambiguous:

The “subject to provision” is intrinsically ambiguous, with many possible meanings. In context all of them create ambiguity. See Affinity Internet Inc. v. Consol. Credit Couns. Serv., Inc., 920 So. 2d 1286, 1289 (Fla. 4th DCA 2006) . . . (subject to means “liable, subordinate, inferior, obedient to; governed or affected by; provided; answerable” (quoting BLACK’S LAW DICTIONARY 1425 (6th ed[.] 1990)). In fact its customary legal use is really only to “indicate a condition to one party’s duty of performance and not a promise by the other.” BGT Group Inc. v. Tradewinds Eng. Serv. LLC, 62 So. 3d 1192 (Fla. 4th DCA 2011) . . . (because of lack of detailed description of terms in document referred to as subject to, terms could not be deemed binding on party). Allstate’s “subject to provision” just incants a statutory truism, namely that all PIP policies are subject to the PIP statute. Allstate’s


“subject to provision” fails to state anywhere in clear, plain text that it will not pay 80% of medically necessary services – which its primary coverage clause requires. Nor does Allstate express in any way that it pay no more than FS 627.736(5)(a)(2)(a-1) allow. Giving due effect to all relevant words, Allstate fails to state anywhere in explicit, plain, simple, apt words that Allstate will not pay 80% of reasonable charges and will actually limit payment to FS 627.736(5)(a)(2)(a-f).

In DPI of North Broward LLC (a/a/o Lauren Goldstein v. Allstate Fire and Cas. Co., 20 Fla. L. Weekly Supp. 161a (Fla. Broward County, Cnty. Ct. 2012) (Lee, J.) this Court held:

By use of the phrase “subject to,” Allstate has not incorporated the optional provisions of the Medicare fee cap into the policy. See St. Augustine Pools, Inc. v. James M. Barker, Inc., 687 So. 2d 957, 958 (Fla. 5th DCA 1997) . . . (the words “subject to” in a contract are distinct from “incorporating” provisions of another document). Allstate has said nothing more than what is already true. All PIP policies are “subject to” these provisions; however, Allstate must clearly and unambiguously take the next step to incorporate these optional provisions into the policy if it desires to use the alternative methodology provided.


For Allstate to be allowed, after the fact, to pick and choose which ‘limitation’ amongst “any and all limitation” would render the Supreme Court’s ruling in [Virtual Imaging] meaningless.

Synergy Chiropractic & Wellness Ctr., Inc. v. Allstate Prop. & Cas. Ins. Co., 22 Fla. L. Weekly Supp. 750a (Broward County Court, Jan. 20, 2015) (footnote omitted).

The Word “Shall”

Allstate relies on the placement of the word “shall,” to precede the words, “be subject to.” According to Allstate, the use of the word “shall” removes any possible ambiguity regarding whether the fee schedule limitations were to be applied: “This is a clear election which puts the insured on notice of Allstate’s intent to limit reimbursements in


accordance with the fee schedules.”

We agree with the Providers that this single word, read in the context of the entire policy, does not transform an ambiguous provision to one that is unambiguous. The word “shall” is meaningless because it simply emphasizes the obvious. Broken down to its most simple form, Allstate’s policy says that “any amounts payable under this coverage shall be subject to any and all limitations” in the PIP statute. The policy text does not say that the limitations “shall be applied”; only that they shall be subject to being applied. The word “shall” does not make it clear whether Allstate will utilize the alternative method or is simply recognizing its entitlement to do so.2

The First District’s Opinion in Stand-Up

Our sister court recently found the provision at issue here to be unambiguous and legally sufficient to give the required notice to policy holders. In Allstate Fire & Casualty Insurance v. Stand-Up MRI of Tallahassee, P.A., 40 Fla. L. Weekly D693 (Fla. 1st DCA Mar. 18, 2015), the First District reasoned that the plain language of the “subject to” provision “gives sufficient notice of [Allstate’s] election to limit reimbursements by use of the fee schedules.” Id. at 694. The court was persuaded by the use of the word “shall” in the provision. Id. The court also opined that Virtual Imaging provides for a “simple notice requirement,” and that the policy in Virtual Imaging was found deficient because it “failed to ‘indicate in any way . . . that it intended to limit its reimbursement to a predetermined amount of set reasonable medical expenses’ using the fee schedules.” Id. (quoting Virtual Imaging, 141 So. 3d at 158-59).

Although the Virtual Imaging court took note that the policy at issue was devoid of any indication that the insurer elected the Medicare fee schedules, this does not in turn mean that any type of reference to the fee schedules will suffice. Virtual Imaging’s central holding is clear: To elect a payment limitation option, the PIP policy must do so “clearly and unambiguously.” A policy is not sufficient unless it plainly and obviously limits reimbursement to the Medicare fee schedules exclusively. The policy cannot leave Allstate’s choice of reimbursement method in limbo under the guise of the words, “subject to” without incorporating specific words to that effect. The policy must make it inescapably discernable

2 Allstate’s policy language simply incorporates the PIP statute (including but not limited to all fee schedules) into its insurance contract. Allstate reserves a plethora of options for itself but does not specify or enumerate anything.


that it will not pay the “basic” statutorily required coverage and will instead substitute the Medicare fee schedules as the exclusive form of reimbursement.

Dozens of courts have weighed in on the meaning of the language at issue in this appeal, and there is a sharp divide as to whether the language is legally sufficient to invoke utilization of the Medicare fee schedules and thereby meet its statutory duty to provide clarity and specificity. And to be sure, Allstate owns the burden to avoid latent ambiguity. See Ruderman, 117 So. 3d at 950 (recognizing, with regard to ambiguous language, that ‘“[i]t has long been a tenet of Florida insurance law that an insurer, as the writer of an insurance policy, is bound by the language of the policy, which is to be construed liberally in favor of the insured and strictly against the insurer’” (quoting Berkshire Life Ins. Co. v. Adelberg, 698 So. 2d 828, 830 (Fla. 1997))). While we recognize that a lack of consensus among the courts does not raise a presumption of ambiguity, it would be disingenuous for us to say that this widespread debate does not make us question Allstate’s suggestion that its policy is, as it argues, “crystal clear.” As Judge Klein said in State Farm Fire & Casualty Insurance Co. v. Deni Associates of Florida, Inc., 678 So. 2d 397, 408 (Fla. 4th DCA 1996): “If Judges learned in the law can reach so diametrically conflicting conclusions as to what the language of the policy means, it is hard to see how it can be held as a matter of law that the language was so unambiguous that a layman would be bound by it.”


Virtual Imaging and Kingsway both make clear that insurance statutes require clarity and specificity in electing fee schedules with respect to PIP medical benefits coverage. Allstate’s post hoc explanation of its intent as to the policy language it chose does not now remake clarity or dispel ambiguities. Based on the foregoing, we find the language at issue is ambiguous and that it must therefore be construed in favor of the Providers. We reverse and remand for further proceedings and certify conflict with Allstate Fire & Casualty Insurance Co. v. Stand- Up MRI of Tallahassee, P.A., 40 Fla. L. Weekly D693 (Fla. 1st DCA Mar. 18, 2015).

Reversed and remanded for further proceedings. Conflict certified.

LEVINE, J., concurs specially with opinion. MAY, J., dissents with opinion.

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LEVINE, J., concurring specially.

I concur with the majority opinion and find that the language drafted by Allstate in its policy is ambiguous and thus compels a reversal.

In considering the specific provisions of this insurance contract, this case at its core rests on the following determination: if the provisions are unambiguous, then the insured has the sufficient notice required by the Florida Supreme Court in Virtual Imaging. However, if the provisions in question are ambiguous or can be susceptible to differing interpretations, then the insured does not have the sufficient notice mandated. “Policy language is considered to be ambiguous . . . if the language ‘is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage.’” Washington Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013) (quoting State Farm Mut. Auto. Ins. Co. v. Menendez, 70 So. 3d 566, 570 (Fla. 2011)).

The policy included a provision, in accordance with the Florida Motor Vehicle No-Fault Law, stating that Allstate would pay to or on behalf of an injured person the following benefits for medical expenses: “Eighty percent of reasonable expenses for medically necessary medical, surgical, X-ray, dental and rehabilitative services, including prosthetic devices, and medically necessary ambulance, hospital and nursing service.”

In a policy endorsement amending the provision, the Allstate policy included the following: “Any amounts payable under this coverage shall be subject to any and all limitations authorized by 627.736, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including but not limited to, all fee schedules.”

Thus, our reading of the policy depends on what words or phrases would dominate the review. Is it “shall” as a mandatory command, is it “subject to” as a permissive instruction, or is it “shall be subject to” which is an amalgamation of both mandatory commands and permissive suggestions? The basic rules of contract interpretation instruct us to read the provisions in whole and not in isolated parts. Blackshear Mfg. Co. v. Fralick, 102 So. 753, 754 (Fla. 1925). “Courts should ‘avoid simply concentrating on certain limited provisions to the exclusion of the totality of others.’” Ruderman, 117 So. 3d at 948 (quoting Swire Pac. Holdings v. Zurich Ins. Co., 845 So. 2d 161, 165 (Fla. 2003)). Further, ambiguities are to be construed against the drafter. Hurt v. Leatherby Ins. Co., 380 So. 2d 432, 434 (Fla. 1980).

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These principles of contract interpretation share a commonality with the principles of statutory interpretation. See OB/GYN Specialists of Palm Beaches, P.A. v. Mejia, 134 So. 3d 1084, 1093 (Fla. 4th DCA 2014) (stating that a statute is ambiguous “[w]here there is more than one reasonable interpretation”); Daneri v. BCRE Brickell, LLC, 79 So. 3d 91, 94 (Fla. 3d DCA 2012) (“When interpreting a statute, we interpret its language and the resulting operation of its terms by reading the statute as a whole to give it meaning in its entirety.”); Traci Commc’ns, Inc. v. Fla. Dep’t of Revenue, 737 So. 2d 1255, 1256 (Fla. 4th DCA 1999) (recognizing rule that ambiguities in tax law are to be construed against taxing authority and in favor of taxpayer); DeRoin v. State, Dep’t of Bus. & Prof’l Regulation, Bd. of Veterinary Med., 160 So. 3d 516 (Fla. 4th DCA 2015) (recognizing that statutes authorizing sanctions or penalties against a person’s professional license are to be interpreted in favor of the licensee). Because of these commonalities, it is useful to examine cases involving statutory as well as contractual interpretation in analyzing the case at bar.

Courts have through the years interpreted the phrase “shall be subject to” with obvious contradictory results. Some cases state that “shall be subject to” is a clear mandatory command. See Leslie Salt Co. v. United States, 55 F.3d 1388, 1397 (9th Cir. 1995) (majority finding “shall be subject to” imposes mandatory civil penalties); Beardsly v. Chicago & N. W. Transp. Co., 850 F.2d 1255, 1264 (8th Cir. 1988) (finding “shall be subject to” is mandatory); Jersey Cent. Power & Light Co. v. Melcar Util. Co., 59 A.3d 561, 568 (N.J. 2013) (reading phrase “shall be subject to” as mandatory to give effect to entire provision); Tilcon Conn., Inc. v. Town of N. Branford, 37 Conn. L. Rptr. 750 (Conn. Super. Ct. 2004) (listing cases finding “shall be subject to” is mandatory); TJX Cos., Inc. v. Superior Court, 77 Cal. Rptr. 3d 114, 118 (Cal. Ct. App. 2008) (stating “shall be subject to” imposes a mandatory obligation). See also Allstate Fire & Cas. Ins. v. Stand-Up MRI of Tallahassee, P.A., 40 Fla. L. Weekly D693 (Fla. 1st DCA Mar. 18, 2015) (finding, without analyzing phrase “shall be subject to,” that insurance policy gave sufficient notice as required by statute).

Alternatively, other cases declare that “shall be subject to” is permissive and thus discretionary in nature. Fallis v. City of N. Miami, 127 So. 2d 883, 884 (Fla. 1961) (finding that “shall be subject to referendum” permits a referendum); Leslie Salt, 55 F.3d at 1397-98 (dissent concluding that “shall be subject to” imposed a discretionary civil penalty); Pace Props., LLC v. Excelsior Constr., Inc., 3:08CV345/MCR/EMT, 2008 WL 4938412, at *3 (N.D. Fla. 2008) (listing cases finding “shall be subject to” is permissive); City of Rochester v.

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Corpening, 907 A.2d 383, 387 (N.H. 2006) (majority finding that clause “shall be subject to” granted authority rather than imposed an obligation); Mena Films, Inc. v. Painted Zebra Prods., Inc., 831 N.Y.S.2d 348 (N.Y. Sup. Ct. 2006) (finding “shall be subject to” language in jurisdiction-conferring clause permissive).

Once again, by demonstrating there is more than one reasonable interpretation of this provision, the basic rules of contract interpretation, which we are bound by, instruct us to find against the drafter, and find for more expansive insurance coverage.

The case of Fallis v. City of North Miami is instructive. In Fallis, taxpayers attempted to contest a municipal bond by stating that the bond issuance required a referendum by the voters, where the provision stated that “[a]ll bonds or other evidence of indebtedness issued hereunder shall be subject to referendum . . . .” 127 So. 2d at 884.

The Florida Supreme Court stated,

A casual examination of the quoted provision might suggest merit in appellants’ position. However, upon closer scrutiny, it will be seen that all that this section provides is that the described evidences of indebtedness ‘shall be subject to referendum.’ The provision is not mandatory; it is obviously intended to permit a referendum on a bond ordinance when such is demanded in accordance with other provisions of the municipal charter.

Id. Similarly, in the present case, an initial or “casual examination” may seem to suggest a mandatory provision, but under “closer scrutiny,” the provision “shall be subject to” is “not mandatory.”

Further, judges and commentators have recognized that even the solitary use of the word “shall” is “in short . . . a semantic mess. Black’s Law Dictionary records five meanings for the word.” Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 113 (2012). As Scalia and Garner noted, to solve the problem of the diverse meanings of “shall,” there has been a movement “to rewrite the federal rules . . . to remove all the shalls and otherwise restyle them. . . . Each shall became must, is, or may.” Id. at 114. See also Bryan A. Garner, Legal Writing in Plain English 106 (2001) (“[T]he Federal Rules of Appellate Procedure and the Texas Rules of Appellate Procedure have

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recently been revamped to remove all shalls.”).3 “In just about every jurisdiction, courts have held that shall can mean not just must and may, but also will and is. Even in the U.S. Supreme Court, the holdings on shall are cause for concern.” Id. at 105 (footnotes omitted).4

Of course, Allstate could have written its policy to explicitly say that it “must” or “will” pay according to the limitations authorized by the statute. Then the policy would be clear and unambiguous. At oral argument, Allstate stated that in order to explicitly write in its policy that it will pay a certain rate as allowed by statute, such as 80% of 200% of the Medicare rates, Allstate would have to amend its policy each time the legislature changed the statute. Although that is an understandable concern, it does not make the language of that provision any less ambiguous or make the drafter of the policy any less required to write unambiguously if it wants to rely on such a provision as a binding interpretation.

The logic and reasoning of Judge O’Scannlain is also persuasive in Leslie Salt v. United States, where he, like Justice Scalia, recognized that even terms such as “shall” can lack precision and clarity. Salt concerned a statute with the same common phrase that confronts us here, “shall be subject to.” The Clean Water Act provided that “[a]ny person who violates [one of the enumerated sections of the Act] shall be subject to a civil penalty not to exceed $25,000 per day for each violation.” 55 F.3d at 1397.

Judge O’Scannlain dissented from reading “this language to mean that civil penalties are mandatory.” Id. He stated, “If section 309(d) had provided ‘Any person who violates . . . shall pay a civil penalty,’ I would readily agree with the majority’s interpretation. However, it does not so provide, and we cannot ignore the three words following the word ‘shall.’” Id. Similarly, in the present case we cannot ignore the same three words following the word “shall,” that being “be subject to.”

3 “As Joseph Kimble, a noted drafting expert, puts it: ‘Drafters use it [shall] mindlessly. Courts read it any which way.’” Garner at 106 (citation omitted). Garner concludes that one should adopt the style of “transactional drafters [who] have adopted the shall-less style” with remarkable clarity. Id.

4 See Garner at 105-06 n.5-10 (citing Moore v. Illinois Cent. R. Co., 312 U.S. 630, 635 (1941); Railroad Co. v. Hecht, 95 U.S. 168, 170 (1877); W. Wis. Ry. V. Foley, 94 U.S. 100, 103 (1876); Scott v. United States, 436 U.S. 128, 146 (1978) (Brennan, J., dissenting); Gutierrez de Martinez v. Lamagno, 515 U.S. 417, 434 n.9 (1995); United States v. Montalvo-Murillo, 495 U.S. 711, 718 (1990)).

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Judge O’Scannlain went on to state that the applicable section

did not use the words “shall pay”; it used the words “shall be subject to.” The latter phrase is synonymous with “shall be liable to” or “shall be answerable to.” Read literally, the section merely states that a violator is liable to be assessed a civil penalty, not that he or she must be. In other words, civil penalties are discretionary.”

Id. at 1397-98 (citation omitted). He concludes that “[i]f Congress had meant civil penalties to be mandatory, it could have written [the section] to state that a violator ‘shall pay’ a civil penalty.” Id. at 1398.

Similarly, in the present case, if the drafter wanted to notify the insured that the medical bills would be paid pursuant to a particular statutory provision, the policy would state “shall pay” (or “must pay” or “will pay”) according to that provision, and not state “shall be subject to.”

In summary, I concur and would reverse the trial court and find the language in the policy ambiguous.

MAY, J., dissenting.

I respectfully dissent. For me, this issue was correctly decided in Allstate Fire & Casualty Insurance v. Stand-Up MRI of Tallahassee, 40 Fla. L. Weekly D693 (Fla. 1st DCA Mar. 18, 2015), and South Florida Wellness, Inc. v. Allstate Insurance Co., No. 13-61759-CIV, 2015 WL 897201 (S.D. Fla. Feb. 13, 2015). Both courts encountered the same insurer and the same policy language. Without struggling to create an ambiguity, the First District held “that Allstate’s policy language gave legally sufficient notice to its insureds of its election to use the Medicare fee schedules as required by Virtual Imaging.” Id. at D694. And as Judge Dimitrouleas found, “the relevant language unambiguously provides notice of Allstate’s election to use the Subsection 5(a)(2) fee schedule method.” S. Fla. Wellness, Inc., 2015 WL 897201, at *4. I agree with the conclusions reached by both courts and would affirm.

As Judge Osterhaus noted: “The crux of the PIP dispute here concerns whether Allstate’s policy language adequately notifies insureds of its election to limit reimbursements via the Medicare fee schedules in § 627.736(5)(a)2., as required by Virtual Imaging.” Id. The First District’s conclusion “stem[med] from the policy’s plain statement that reimbursements ‘shall’ be subject to the limitations in § 627.736, including ‘all fee schedules.’” Id. That is precisely what Allstate has

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done here. It has placed the insured on notice that reimbursements are subject to the Medicare fee schedule-based limitation set forth in the PIP statute. There is nothing ambiguous in the policy’s language.

Unfortunately, the providers have led the majority down the yellow brick road. The issue is not whether the policy is ambiguous, but rather whether the policy adequately put the insured on notice of the insurer’s election to limit reimbursements according to the Medicare fee schedules set forth in section 627.736. See Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc. (Virtual Imaging), 141 So. 3d 147, 149–59 (Fla. 2013). Instead of simply reading the policy’s plain language for what it says, the majority spends fourteen pages trying to convince the reader that an ambiguity exists.

After all, let’s remember the purpose of PIP coverage. “[T]he purpose of the no-fault statutory scheme is to provide swift and virtually automatic payment so that the injured insured may get on with his [or her] life without undue financial interruption.” Id. at 153 (second alteration in original) (quoting Ivey v. Allstate Ins. Co., 774 So. 2d 679, 683–84 (Fla. 2000)) (internal quotation marks omitted). Providers, however, look to get paid as much as possible, but that does not inure to the insured’s benefit. The less costly the services provided, the more services the insured can receive. While some providers may choose to not treat an insured if their fee is limited to the Medicare fee schedules, that problem is one of the provider’s making, not that of the insurer.

Since its inception, the PIP statute has been the playing field where providers and insurers battle over the meaning of its language. The legislature continues to amend the PIP statute so that it serves the purpose for which it was intended. Indeed, the majority notes the numerous times the PIP statute has been amended. Each time that happens, insurers are required to review their policies and change language. That comes at a cost. And it is the insured that bears that cost.

Yet, time after time, the battle rages on. As the Pope once asked Michelangelo during the painting of the Sistine Chapel: “When will there be an end?”

Our supreme court noted that “[t]he permissive language of the 2008 amendments . . . plainly demonstrates that there are two different methodologies for calculating reimbursements to satisfy the PIP statute’s reasonable medical expenses coverage mandate.” Id. at 156. The majority suggests that the policy must make it “inescapably discernable”

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what methodology will be used. As the First District articulated, “the language of [Allstate’s] policy makes reimbursements subordinate to the fee schedules in rather unmistakable terms.” Stand-Up MRI of Tallahassee, 40 Fla. L. Weekly at D694.

Here, Allstate specifically elected the limitations provided by the Medicare fee schedules and gave notice to the insured that it will pay according to their limitations. In short, the policy language is unambiguous.5 I would affirm.


Not final until disposition of timely filed motion for rehearing.

5 In my view, it is unclear whether Virtual Imaging actually required an election of one of the two methodologies provided by the PIP statute as long as the insured is given notice that it would opt for one of the methodologies provided. That would still not make a policy ambiguous; it would simply allow the insurer discretion in choosing the methodology to be used.

The Protected Health Information Cyber Attack Threat (Part 2)

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business man in office BE 1With the increasing use of EHRs, practices are facing increased liability with regard to breaches of Protected Health Information (ePHI).

At the same time, increased HIPAA and HITECH security regulations and penalties for violations, also increase the healthcare provider’s liability for breaches of ePHI.

In part two of this series we are discussing simple steps to reduce most major threats to the safety of your ePHI.

Limit Network Access:

Web 2.0 technologies like peer-to-peer file sharing and instant messaging are popular and make networking tools appealing.  Wireless routing is a quick and easy way to set up broadband capability within an office.

However, because the sensitivity of healthcare information is protected by law, small practices that intend to rely on wireless networking must use special precautions.

Unless the wireless router is secured, its signal can be picked up from some distance away, including, for example, the building’s parking lot, other offices in the same building, or even nearby homes.

Therefore, it is crucial to secure the wireless signal so that only those who are permitted to access the information can pick up the signal.

Devices brought into the practice by visitors should not be permitted access to the network, since it is unlikely that such devices can be fully vetted for security.

Setting up a network to safely permit guest access is expensive and time-consuming, so the best defense is to prohibit casual access.

In configuring a wireless network, each legitimate device must be identified to the router and only those devices are permitted access.

Peer-to-peer applications, such as file sharing and instant messaging can expose the connected devices to security threats and vulnerabilities, including permitting unauthorized access to the devices on which they are installed.

Make sure these applications have been installed, reviewed and approved. It is not sufficient to just turn these programs off or uninstall them. A machine containing peer-to- peer applications may have exploitable bits of code that are not removed even when the programs are removed and should be encrypted.


Mobile Device Protection:

  • Examples of mobile devices are laptop computers, handheld pads, smart phones, portable storage media (Disk, Thumb drives, external hard drives, etc.). They can make things easier, but they also present threats to information security and privacy. Some of these threats are similar to those of the desktop world, but others are unique to mobile devices.
  • Because of their very mobility, these devices are easy to lose and are very vulnerable to theft.
  • Mobile devices are more likely to be exposed to electro-magnetic interference (EMI), which can corrupt the stored information.
  • Not all mobile devices are equipped with strong authentication and access controls.
  • Mobile devices are frequently used to transmit and receive data wirelessly and must protect the information being intercepted.
  • Mobile devices that carry ePHI and that cannot support encryption should not be used. This includes thumb drives. Encrypted versions of these devices are available but are more expensive.
  • Staff members that that take ePHI home on mobile devices have responsibility for protecting patient data and must follow good security practices.
  • If it is necessary to remove a laptop containing ePHI from a secure area, the laptop’s hard drive should be encrypted.
  • Office Policies should specify all situations under which mobile devices can be removed from the facility, and care must be taken in developing and enforcing these policies.


In the next issue, we will go over a security risk analysis checklist to help you review your compliance activities.

If you would like to learn more about having an office that’s bullet proof, email me at drjohn@the complianceman.com to see if we can help you.

These are trying times for all doctors and ignoring the new regulations is no longer an option.

Again if you have any questions, don’t hesitate to contact me.

All The Best,

Dr. John Davenport

Chief Compliance Officer

Compliance & Auditing Services

The Protected Health Information Cyber Attack Threat

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3d rendering of a monit with a chain around it.

Reports of cyber attacks on large corporations such as  Nationwide, JPMorgan Chase and even the Pentagon have been make big news. Yet, every day there are attacks aimed at small to mid-size organizations.

With the increasing use of EHRs, practices are facing increased liability with regard to breaches of protected Health information (ePHI). Hackers know that healthcare providers are less likely to fully protect themselves.

At the same time, increased HIPAA and HITECH security regulations and penalties, for violations, also increase the healthcare providers liability for breaches of ePHI,

Many Doctors simply lack the knowledge and training needed to protect their offices against a cyber attack or meet HIPAA Security Rule requirements.

In this three part series we will discuss simple steps to reduce most major threats to the safety of ePHI. This should be considered basic computer security 101 and not a course on the HIPAA/HITECH rules.

Firewall Protection:

First, unless your practice is totally disconnected from the Internet, it should have a Firewall to protect against threats from outside sources.

Basically, a Firewall is a system that prevents unauthorized access to a private network and works like a filter between your computer network and the Internet. Anything that goes into or out of the network must pass through the firewall.

The firewall examines each message and can be configured to prevent employees from sending certain types of emails or transmitting sensitive data outside of the network.

Additionally, firewalls can be programmed to prevent access to certain websites (like social networking sites) and can prevent outside computers from accessing computers inside your network.

Most computer operating systems come with a firewall installed and firewall software is also available at stores that sell computer products. Both types of firewall software normally provide technical support and guidance for users without the technical savvy.

Anti-virus Protection:

In small offices, attackers compromise computers primarily through viruses, spyware and malware. Computers can become infected by outside sources such as CD- ROMs, e-mail, flash drives, and web downloads. Even a computer that has all  the latest security updates to its operating system and applications can be at risk because of system flaws.

Anti-virus software is used to scan files to identify and eliminate computer viruses andmalicious software. It can also let you know when there has been an attempted threat to your system.

Anti-virus software analysis’s system files to look for known viruses, by means of a virus dictionary, and identifies suspicious behavior that might indicate an infection. Therefore, providing protection against brand-new viruses that do not yet exist in any virus dictionaries.

Without anti-virus software to identify infections, data may be stolen or destroyed. Reliable Anti-virus software is available at most stores that sell computer products, and are relatively inexpensive to buy.

Once you’ve down loaded anti-virus software to your computer, this includes hand held devices, make sure to keep it updated. Anti-virus products require regular updates in order to protect from new computer viruses.

Chained laptop from the frontPasswords:

Passwords are a first line defense in preventing unauthorized access to any computer and should be required to log into your system.  In addition, passwords can be reviewed, using an audit trail log, to see who is accessing specific information and what changes where made to that information.

Passwords can also limit what information individual people have to certain information. This can include certain staff members, your IT contractor, your billing company or anyone who has remote access to your computer system.

Because criminals use special software to try to guess a password, it is important to use strong passwords. A Strong password should:

  • Be at least 8 characters in length
  • Include a combination of upper case and lower case letters, at least one number and at least one special character, such as a punctuation mark
  • Be changed periodically.

You should also have policies in place to remove passwords on staff that leave or are terminated.

An administrator password is used only when you need to make changes or updates to your operating system. This means that anyone with this code can go anywhere and change anything in your system.

To decrease the chance that the administrator password gets stolen, the person in your office authorized to make changes to your system should have a separate user code that is used for daily system access.