DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

PROGRESSIVE SELECT INSURANCE COMPANY,

Appellant,

v.

DR. RAHAT FADERANI, DO, MPH, P.A.,

a/a/o ROBERSON PIERRE,

Appellee.

No. 4D21-232

[November 10, 2021]

Appeal from the County Court for the Seventeenth Judicial Circuit, 

Broward County; Kathleen McCarthy, Judge; L.T. Case Nos. COCE 19-

1076 (51) and CACE 20-17509 (AP).

Michael C. Clarke of Kubicki Draper, P.A., Tampa, for appellant.

Kevin R. Jackson of the Law Offices of Kevin Jackson, P.A., Fort 

Lauderdale, for appellee.

WARNER, J.

Progressive Insurance Company appeals a final summary judgment 

finding that it had adjusted bills for PIP1 claims improperly, resulting in 

the underpayment of appellee, Dr. Faderani. The trial court also denied 

Progressive’s motion for summary judgment. Progressive had reduced 

appellee’s bills by using the National Correct Coding Initiative edits (NCCI), 

a national initiative to promote correct coding of health care services 

implemented by the Center for Medicaid and Medicare. Appellee 

contended that such reduction was in bad faith based upon SOCC, P.L. v. 

State Farm Mutual Automobile Insurance Co., 95 So. 3d 903 (Fla. 5th DCA 

2012), which held that the edits were not permitted under a prior version 

of section 627.736(5)(a)3., Florida Statutes. The statute was amended 

after SOCC to allow insurance companies to use “Medicare coding policies 

and payment methodologies” in its reimbursement decisions, so long as 

those policies and modifications “do[] not constitute a utilization limit.” 

1 PIP stands for personal injury protection benefits contained in automobile 

insurance policies. See § 627.736, Fla. Stat.
2

Because the use of Medicare coding policies was authorized by the 

amended statute, and Progressive had exhausted the PIP benefits prior to 

the filing of this suit, the trial court erred in granting summary judgment 

to appellee and denying Progressive’s motion for summary judgment. We 

reverse.

Progressive’s insured was injured in an auto accident. Insured’s policy 

included $10,000 in PIP benefits subject to a $1,000 deductible. Insured 

was treated and seen by multiple providers. Prior to seeking treatment 

from appellee, insured obtained treatment from United Health and Rehab 

Center, which submitted two claims to Progressive. Progressive adjusted 

those claims, reducing payment based upon NCCI edits, explaining that 

according to “the National Correct Coding Edits [NCCI], this procedure 

code is not separately reimbursable with this chiropractic manipulative 

treatment code (98940-98942) with modifier exceptions.” This resulted in 

a reduced calculation of the amount owed to United Health, and that 

reduced amount was then applied to meet the deductible. Progressive 

applied appellee’s bill to the deductible, resulting in no payment to 

appellee until appellee sent a pre-suit demand letter. Progressive paid an 

additional amount in response to the demand letter, and then Progressive 

exhausted its PIP coverage through payment to other providers.

After benefits were exhausted, appellee sued Progressive for breach of 

contract based on an assignment of benefits and provider’s lien from 

Progressive’s insured. Appellee alleged that Progressive “improperly 

reduced some of [insured’s] bills before applying them to the subject 

policy’s deductible, resulting in a reduced payment being made to

[appellee].” It did not allege that Progressive acted in bad faith. Progressive 

answered and alleged affirmative defenses including that the PIP benefits 

were exhausted, estopping appellee from seeking further payment.

Appellee moved for summary judgment, claiming that Progressive had 

improperly exhausted PIP benefits, and had acted in bad faith by using 

the NCCI edits to calculate the reimbursable amount on United Health’s 

bill. Progressive had failed to follow SOCC, which appellee claimed held 

that NCCI edits could not be used to adjust a PIP claim, because the edits 

were utilization limits. If the NCCI edits had not been used, the deductible 

would have been applied differently, resulting in PIP coverage to reimburse 

appellee when its bill was presented.

Progressive also filed a motion for summary judgment, claiming it was 

entitled to judgment based on its exhaustion of the claimant’s PIP benefits 

pre-suit. Progressive had paid out the statutory policy limits of the 

claimant’s PIP benefits. It could not be required to pay in excess of the 
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claimant’s PIP benefits in the absence of bad faith, and there was no basis 

for a bad faith allegation.

At the hearing on the motions, appellee relied on SOCC to claim that 

Progressive improperly used the NCCI edits. Progressive argued that 

SOCC was not binding, because the statute was amended to allow the use 

of Medicare coding methodologies. Thus, it could not be liable for bad 

faith. The court granted appellee’s motion and denied Progressive’s 

motion. It then entered final summary judgment for benefits to appellee 

in the amount of $116.55 plus interest and entitlement to reasonable 

attorney’s fees and costs. After a motion for rehearing was denied, 

Progressive filed this appeal.

The standard of review of an order granting summary judgment is de 

novo. Restoration Constr., LLC v. SafePoint Ins. Co., 308 So. 3d 649, 651 

(Fla. 4th DCA 2020). The standard of review of interpretation of the Florida 

No-Fault (PIP) Statute, section 627.736, Florida Statutes, is also de novo. 

Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So. 3d 147, 152 (Fla. 

2013).

Progressive argues that PIP benefits under the policy were exhausted 

before appellee filed suit, and it could not be compelled to pay benefits to 

appellee. In Northwoods Sports Medicine & Physical Rehabilitation, Inc. v. 

State Farm Mutual Automobile Insurance Co., 137 So. 3d 1049 (Fla. 4th 

DCA 2014), we held “[o]nce the PIP benefits are exhausted through the 

payment of valid claims, an insurer has no further liability on unresolved, 

pending claims, absent bad faith in the handling of the claim by the 

insurance company.” Id. at 1057 (emphasis added); see also GEICO Indem. 

Co. v. Gables Ins. Recovery, Inc., 159 So. 3d 151 (Fla. 3d DCA 2014).

As Progressive notes, appellee did not make a claim of “bad faith” in his 

Statement of Claim. Progressive alleged as an affirmative defense that the 

PIP benefits had been exhausted by payments to other providers. Bad 

faith would be considered an avoidance of Progressive’s affirmative defense 

of exhaustion, but appellee did not file a reply. Instead, appellee points to 

his allegation that Progressive made “improper payments” in his claim as 

satisfying the exception to the exhaustion of benefits defense.

Some cases support the appellee’s contention that when payments have 

been improperly made and PIP benefits exhausted prior to payment to the 

unpaid provider, the unpaid provider may be entitled to relief. In Coral 

Imaging Services v. Geico Indemnity Insurance Co., 955 So. 2d 11 (Fla. 3d 

DCA 2006), on second tier certiorari review, the Third District found 

summary judgment for the plaintiff provider was correct where Geico had 
4

improperly paid two other untimely claims submitted by a different 

provider and exhausted benefits before addressing the plaintiff provider’s 

timely claim. However, the Third District later limited Coral Imaging to 

apply only to the payment of untimely claims. Gables Ins. Recovery, 159 

So. 3d at 155. And in Allstate Fire & Casualty Insurance Co. v. Jeffrey L. 

Katzell, M.D., P.A., 323 So. 3d 191 (Fla 4th DCA 2021), we considered a 

case in a similar posture, albeit on a concession of error by the provider, 

where the provider sued Allstate for benefits alleging that it had made 

statutorily improper payments to other providers which exhausted the PIP 

benefits before the provider’s claim. In that case, we ultimately determined 

that the payments had been properly made. We did not address directly 

whether improper payments by the insurer, absent an allegation of bad 

faith in a reply, were sufficient to overcome the exhaustion of benefits 

defense.

Were we to write on a clean slate, and except for untimely payments,2

we would hold that an insurance company’s “improper” payments to 

another provider do not constitute bad faith sufficient to overcome the 

insurance company’s exhaustion of benefits defense to a provider who 

sues for payment after the policy limits have been exhausted. In 

Northwoods, we allowed bad faith “in the handling of the claim by the 

insurance company” to overcome the defense. 137 So. 3d at 1057. We 

construe that to mean bad faith in the handling of the claim at issue, not 

a claim by a third party, particularly where there is no evidence that the 

third party contested how the insurance company handled that party’s 

claim. In other words, the conduct of the insurance company must be 

directed at the provider attempting to avoid the exhaustion of benefits 

claim. Nevertheless, because of the foregoing cases, we conclude that we 

must address whether Progressive overcame the bad faith or improper 

payments claim of appellee.

We conclude that the court erred in granting summary judgment on 

the basis that Progressive’s use of the NCCI edits were improper and in 

bad faith. Appellee argued that they were improper based upon SOCC. 

We reject the application of SOCC to this case, as it was decided under an 

2 Where a provider makes an untimely submission of a bill to the insurer, the 

insured is not liable for any payment to the provider. See § 627.736(5)(c), Fla. 

Stat. The insured’s lack of liability for untimely bills was the reason that the 

Coral Imaging court held that untimely payments to other providers which 

exhausted benefits would result in an exception to the exhaustion of benefits rule 

where a timely submitted payment was then not reimbursed. The insured would 

be liable for any portion of a timely submitted bill.
5

earlier version of section 627.736(5)((a)3., Florida Statutes (2018).3 In that 

case, the court answered a certified question from the county court: “Are 

the National Correct Coding Initiative comprehensive edits database (NCCI 

edits) incorporated into the Florida No–Fault (PIP) statutes[?]” 95 So. 3d 

at 905 (emphases omitted). In SOCC, a provider contested the insurance 

company’s bundling of services on its bill using NCCI edits. State Farm 

contended it could bundle the services based upon the Center for Medicare 

methodologies. After reviewing the statute, the court held that the statute 

did not incorporate the NCCI edits in its terms, concluding that the 

statutory language prohibited the insurance company from treating a PIP 

claim the same as a Medicare claim. Id. at 910. The case did not hold 

that NCCI edits were an improper utilization limit.

Subsequent to SOCC, the Legislature amended section 627.736(5)(a)4.

in 2012 to include the use of Medicare coding methodologies. The 

renumbered statute, section 627.736(5)(a)3., applicable here provides:

Subparagraph 1. does not allow the insurer to apply any 

limitation on the number of treatments or other utilization 

limits that apply under Medicare or workers’ compensation. 

An insurer that applies the allowable payment limitations of 

subparagraph 1. must reimburse a provider who lawfully 

provided care or treatment under the scope of his or her 

license, regardless of whether such provider is entitled to 

reimbursement under Medicare due to restrictions or 

limitations on the types or discipline of health care providers 

who may be reimbursed for particular procedures or 

procedure codes. However, subparagraph 1. does not prohibit 

an insurer from using the Medicare coding policies and 

payment methodologies of the federal Centers for Medicare and 

Medicaid Services, including applicable modifiers, to determine 

the appropriate amount of reimbursement for medical services, 

supplies, or care if the coding policy or payment methodology 

does not constitute a utilization limit.

§ 627.736(5)(a)3., Fla. Stat. (2018) (emphasis added). Thus, the statute 

now allows the use of Medicare coding in reimbursement decisions.

We recently considered this statutory language and determined that an 

insurance company could use the Medicare Multiple Procedure Payment 

Reduction (“MPPR”) coding to limit PIP provider reimbursements as it was 

3 SOCC was decided based on section 627.736(5)(a)4., Florida Statutes (2008). 

95 So. 3d at 905 n.2.
6

an authorized payment methodology, not an improper utilization limit.

State Farm Mut. Auto. Ins. Co. v. Pan Am Diagnostic Servs., Inc., 321 So. 3d 

807 (Fla. 4th DCA 2021). We concluded that the MPPR did not limit the 

number of services a patient may access. It simply limited the 

reimbursement for them. Quoting from a county court analysis, we noted:

A determination of a reasonable charge for provider services, 

however, does not mean, a fortiori, that such limitation on 

reimbursement deprives a patient of necessary treatment or 

precludes a health care provider from utilizing necessary and 

reasonable care. If that were the Legislature’s purpose in its 

latest iteration of the PIP Statute, then no coding policies or 

payment methodology would be permissible.

Id. at 810. A utilization limit is patient-oriented, preventing the patient 

from treatment. It is not provider-directed to expand what codes can be 

billed for services to the patient.

Other provisions of the PIP statute also allow for coding policies 

regarding bundling of services. The statute requires that providers use 

Centers for Medicare and Medicaid Services forms for submitting claims. 

See § 627.736(5)(d), Fla. Stat. (2018). An insurer is not required to pay a 

claim or charge “[f]or any treatment or service that is upcoded, or that is 

unbundled when such treatment or services should be bundled, in 

accordance with paragraph (d).” § 627.736(5)(b)1.e., Fla. Stat. (2018). 

Thus, the Legislature clearly contemplated that the insurer could consider 

coding policies involving bundling of services. A review of the NCCI policy 

manual for Medicare reveals the purpose of the NCCI policies. “The CMS 

developed the National Correct Coding Initiative (NCCI) program to prevent 

inappropriate payment of services that should not be reported together.” 

Centers for Medicare & Medicaid Services, U.S. Dep’t of Health & Human 

Services: NCCI Policy Manual for Medicare, Ch. I-4 General Correct Coding 

Policies, (October 2021) (“NCCI Policy Manual”), https://www.cms.gov/

files/document/chapter1generalcorrectcodingpoliciesfinal112021.pdf.

The purpose of the NCCI PTP (Procedure to Procedure) edits is to 

prevent improper payment when incorrect code combinations are reported.

The NCCI contains one table of edits for physicians/practitioners and one 

table of edits for outpatient hospital services. The purpose of the NCCI 

MUE (Medically Unlikely Edits) program is to prevent improper payments 

when services are reported with incorrect units of service. Centers for 

Medicare & Medicaid Services, National Correct Coding Initiative,

https://www.cms.gov/Medicare/Coding/PTP-Coding-Edits?redirect. In 

other words, the NCCI is a coding policy and payment methodology, not a 
7

utilization limit. The edits do not prohibit services to the patient; they 

simply require that those services be bundled together for payment, where 

appropriate, when the service is comprehensive involving multiple coded 

procedures. For example:

A physician shall not report multiple HCPCS/CPT codes when

a single comprehensive HCPCS/CPT code describes these

services . . . .

A physician shall not fragment a procedure into component

parts . . . .

A physician shall not unbundle a bilateral procedure code into 

2 unilateral procedure codes . . . .

A physician shall not unbundle services that are integral to a 

more comprehensive procedure[.]

NCCI Policy Manual, Chapter I-6–7, https://www.cms.gov/files/

document/chapter1generalcorrectcodingpoliciesfinal112021.pdf.

Similarly, section 627.736(5)(b)1.e., Florida Statutes, specifically 

authorizes an insurance company not to pay for unbundled services. 

These coding policies are also similar to the MPPR, which we held were not 

utilization limits in State Farm Mut. Auto. Ins. Co. v. Stand Up MRI of Boca 

Raton, P.A., 322 So. 3d 87, 89 (Fla. 4th DCA 2021); accord Progressive Am.

Ins. Co. v. Head To Toe Posture Rehab, LLC, --- So. 3d ----, 2021 WL 

4561377 (Fla. 4th DCA October 6, 2021).

Thus, we agree with Progressive that the NCCI edits are not utilization 

limits. Rather, the edits are Medicare coding policies and payment 

methodologies allowed by section 627.736(5)(a)3. in the reimbursement of 

PIP claims. Progressive properly used the edits in determining

reimbursement.

Because the use of NCCI edits comports with the statute, Progressive 

did not make improper payments or act in bad faith in using the edits to 

reduce the bill of the third-party provider. As it is undisputed that 

Progressive exhausted insured’s PIP benefits by the proper payment of 

claims prior to this lawsuit, Progressive is not liable for payment in excess 

of the policy limits. The trial court erred in granting summary judgment 

for appellee and denying Progressive’s motion for summary judgment. We 

thus reverse and remand for entry of a judgment in favor of Progressive.
8

Reversed.

LEVINE and KLINGENSMITH, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.