For years, medical providers who offer services to those injured in car accidents have been at the mercy of auto insurance companies who use their own doctors and billing software program to dramatically reduce bills.
Auto Insurance Companies Hiring Their Own Doctors
Cloaked as “cost-savings measures”, insurance companies hire their own doctors to conduct “independent” examinations of their insureds who, in the majority of instances, find that the injured person no longer requires medical treatment. Insurance companies also use these “independent” doctors to review medical records and bills and inevitably find that the treatment being rendered is excessive or not necessary.
Auto Insurance Companies and Medical Software
Insurers also use software programs which review medical bills and reduce them, claiming that the medical provider is simply charging too much for services. Until recently, medical providers were stuck with writing off bills which the insurance company refused to pay based upon these examinations, reviews and software reductions.
Even when a medical provider decided to fight the insurance companies, they were often left with having to pay for attorneys fees which exceeded the amounts owed to them. Of course, this left medical providers in the unenviable position of having to write off medical bills which the insurance companies should have been paying.
Challenging the Auto Insurance Companies
Massachusetts General Laws Chapter 90, Section 34M states that an insurance company who reduces a medical providers bills can be sued by the provider and, if the insurance company loses, they have to pay the bill and the attorneys’ fees. However, the statute was interpreted by the insurance companies as requiring a judgment before they had to pay for attorneys’ fees. Therefore, insurers were simply refusing to pay the bill and then, if sued, would drag the medical provider through the courts, and then they would pay the outstanding bill before a judgment entered against them. This, of course, allowed insurance companies to avoid having to pay attorneys’ fees.
Appeal to the Appellate Division of the District Court
Recently, Attorney Kevin McCullough of Mazow & McCullough, PC appealed a case to the Appellate Division of the District Court to argue that insurance companies were unfairly manipulating the statute to avoid paying attorneys’ fees.
In Metro West Medical Assocs., Inc. v. Amica Mut. Ins. Co., 2010 WL 3118636 (Mass.App.Div.) Attorney McCullough argued that the insurance companies should not be able to reduce medical bills and then avoid paying attorneys’ fees if it was found that the reduction was improper.
Metro West alleged that it provided medical services to a patient, who was entitled to PIP benefits from Amica. Amica paid some of the bills but rejected the additional bills on the grounds that the services were unreasonable and unnecessary. A few weeks later Amica sent a check for the amount it had originally rejected. Attorney McCullough returned the check and demanded payment for attorney’s fees under the PIP statute.
Appellate Court Findings
The court stated that it would not be inconsistent with prior case law “to require that the insurer on the § 34M [PIP] claim show more on summary judgment than simply that the bills have all been paid. It should also have to show that there is no genuine issue of fact concerning whether it had a valid reason not to pay, and that it paid an invalid claim for reasons unrelated to its merits, for example, to avoid the cost of litigation or to remove a potential liability off its books.”
The court held open the possibility that an insured could reject a tender of late payment from an insurer. “In this light, a check for the balance of bills could be viewed as an offer of settlement, which could be rejected, and not a tender of full payment.”
While the Court ultimately decided that judgment could enter for Amica, it opened the door for medical providers to return checks to insurers who refused to also include attorneys’ fees. The decision will ultimately lead to greater leverage for medical providers to either get their reasonable bills paid in full or be able to seek attorneys’ fees when the insurance company refuses to pay.
Contact a Massachusetts Auto Accident Lawyer
If you or a loved one has been involved in an auto accident and feel you did not get appropriate compensation from an auto insurance company, contact a Massachusetts auto accident attorney at Mazow|McCullough, PC today. Our experienced legal team offers a free legal consultation and expert advice.