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Pediatria P.C. v. Diopsys, Inc.

United States District Court, D. Arizona

February 21, 2014

PEDIATRIA P.C., an Arizona professional company, Plaintiff,
v.
DIOPSYS, INC., a New Jersey corporation, Defendant.

ORDER

H. RUSSEL HOLLAND, District Judge.

Motion for Summary Judgment

Defendant moves for summary judgment.[1] This motion is opposed.[2] Oral argument was requested and has been heard.

Facts

Plaintiff is Pediatria, P.C. Plaintiff, through Dr. Jaime Balderrama, offers primary care for children ranging from newborn to eighteen years of age.

Defendant is Diopsys, Inc. Defendant manufactures the Enfant Pediatric Vision Testing System, which is a visual evoked potentials (VEP) machine. The VEP technology "evaluates [a person's] response to an external stimulus along the entire visual pathway from the lens of the eye to the visual cortex of the brain."[3]

In 2008, Dr. Balderrama received a publication entitled "Pediatric Coding Alert", [4] which suggested that "[i]f you want to test nonverbal patients for visual impairments, you may want to consider a visual evoked potentials machine that insurers often cover per test from a low of $30 to a high of $160."[5] The Coding Alert stated that "[a]lthough payment for vision screening... can prove hard to come by, reimbursement is much more straightforward for VEP test code 95930...."[6] The Coding Alert contained a testimonial from Dr. Richard Lander, a "pediatrician at Essex-Morris Pediatric Group in Livingston, N.J.", who stated that "[i]t is a good screening test for amblyopia [lazy eye] that is able to test kids as young as 6 months old."[7] The Coding Alert mentioned the Enfant Pediatric Vision Testing System as a an example of a VEP machine.[8] The Coding Alert also contained statements by Diane C. Fulton, "director of insurance/medical coding and billing" for defendant.[9] Fulton stated that "[i]t's just not practical to send every child to a specialist for a test that the patient's pediatrician can do.... This test makes a difference in children's lives by catching vision problems that could affect their development at a time when they are most receptive to treatment."[10] Fulton also stated that "[i]nsurers reimburse the test 80 percent of the time, depending on your payer mix and geographic area[.]"[11] As for insurers which would not reimburse the test, Fulton stated that they do so because "[t]he insurer doesn't want to add the code to its capitation exceptions, ... [o]r, the payer requires a specialist to perform the test based on antiquated intra-operative VEP guidelines."[12] The Coding Alert stated that "[c]ommercial plan payments range from $60 to $160" and Fulton stated that "Aetna sets the gold standard' of medical policies when it comes to VEP[, ]" presumably because it "recognizes the importance of early vision testing during a well check."[13] The Coding Alert further stated that "[m]ost state Medicaid plans cover VEP. Ohio Medicaid pays the code at a low of $30, with many other state Medicaid plans paying about $90."[14] The Coding Alert advised that "[s]ome plans may have outdated VEP policies. For instance, Oxford's guidelines limit VEP coverage to the operating room or certain specialists."[15] Lander advised that "[i]f an insurer states it is not a covered service, the patient has the option to pay at the time of service[.]"[16] The Coding Alert suggested that doctors "[m]ake a chart of your payers' VEP policies focusing on noncovered versus covered. Fulton follows VEP reimbursement trends across the country and can help facilitate this process...."[17] The Coding Alert advised that

[y]ou'll get paid the first time around for VEP tests if you use the payer-required V code and switch to a problem code when you should.... Because physicians often perform VEP during a preventative medicine service, you'll link 95930... to one of two V codes.... Most insurers cover the test during the well check with the preventative medicine service diagnosis. "Many commercial plans, as well as Aetna, accept V20.2 on the vision screening and on the preventative medicine service, " says Diane C. Fulton....[18]

Dr. Balderrama testified that he had never considered VEP testing until he read the Coding Alert.[19] Dr. Balderrama testified that he then had a staff member contact defendant to request more information about the VEP machine.[20]

Defendant sent plaintiff written material about the Enfant VEP testing system. One brochure stated that the reimbursement code for VEP tests was 95930, that "[m]ost insurance plans cover the test during a child's well visit", that "[c]ommercial plan payments range from $60-$160 per test" but that "[c]ommercial reimbursement varies by payer[, ]" and that "Diopsys has a full-time Insurance/Medical Coding and Billing Group to assist your business staff with reimbursement."[21] Also included in the material was a "Billing and Coding Bulletin for Optometrists", which discussed the use of the 95930 code. The bulletin stated that "Medicare's allowable for global, bilateral CPT 95930 ranges from $77.04 to $152.51, " that "[c]ommercial plan payments range from $60 to $160[, ]"and that "Diopsys monitors commercial allowables throughout the country and approximates the average at $79.68 based on payment trends."[22]

Dr. Balderrama then asked his staff to call the AHCCCS[23] insurance plans to see if they would cover VEP tests.[24] Dr. Balderrama testified that he instructed his staff to ask if the VEP test would be covered if it were done as part of a well-child visit.[25] Brenda Mena was a Pediatria staff member who called AHCCCS plans to see if VEP testing would be covered. She testified that Dr. Balderrama "wanted [her] to look into the Medicaid plans themselves to find out if they covered the vision, if the testing was covered under their plan."[26] She testified that she "asked if the CPT code, the 95930, was covered under the well-care. And the plans told us if it's in the primary care physician's office, yes, it is covered."[27] Mena testified that she recalled telling some of the plans that plaintiff was considering buying a VEP testing machine and that it "need[ed] to know if it's covered under their plan, if it requires a prior authorization."[28]

Cynthia Sukung was another Pediatria staff member who "call[ed] the insurance plans to verify if this code [95930] would be covered within the PCPs office."[29] Sukung testified that she believed that she called Mercy Care and Care First and that Care First said that prior authorization would be required.[30]

Dr. Balderrama testified that he had his staff call more than once to verify that VEP test would be covered by the AHCCCS plans and that he also had them check with "some of the commercial plans... and all of them say yes, it was covered. So if this was a blanket yes, it really looked that it could be appropriate and advisable for us to perform the test, we were thinking about it quite seriously from there on."[31]

Dr. Balderrama testified that plaintiff then contacted defendant and found out that the price of the Enfant VEP testing system was $35, 000.[32] Dr. Balderrama testified that at this point in time, he was in contact with defendant's sales representative in California, Don Fellows, and that Fellows was ...


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