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PIP

Attorney Robert Mazow quoted in Massachusetts Lawyers’ Weekly

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This past October, the Supreme Judicial Court, the highest appellate court in Massachusetts, rendered a decision in Barron Chiropractic & Rehabilitation, P.C. v. Norfolk & Dedham Group.  Mazow & McCullough, PC was not involved in the litigation but does handle numerous similar kinds of cases in its PIP Collection department.

The Barron case clarified a prior decision from the SJC in the case of Fascione v. CNA Insurance Cos.  In both Fascione and Barron, chiropractors sought payment from automobile insurance companies for treatment rendered to patients injured in car accidents.  The insurers denied payment of the chiropractors’ bills and the chiropractors filed lawsuits under the Massachusetts Personal Injury Protection (“PIP”) statute.  The PIP statute allows a medical provider to sue an insurance company for outstanding bills related to treatment for car accidents.  The statute also allows an insurer to deny payment to providers if medical treatment is not considered “reasonable, necessary, or related to the accident.”  If the medical provider wins the lawsuit, the insurer must pay the bills as well as the attorneys’ fees.  The PIP statute also states that if an insurer tenders the balance to the medical provider prior to judgment, and the balance is accepted, the insurer is not responsible for the attorneys’ fees.

In Fascione, the SJC held that because the medical provider accepted the full balance owed it prior to any judgment, the insurer was not also responsible for payment of attorneys’ fees.

Following the Fascione decision, insurers who denied payments to medical providers would wait to be sued and then at any time prior to judgment, tender the balance to the medical provider without also paying attorneys’ fees.  This strategy obviously put the medical provider in an untenable situation where it would either have to write off a balance owed or risk having to pay its own attorneys fees if the insurer waited to pay it until just before judgment.

In Barron, a chiropractor challenged this strategy, which Norfolk and Dedham Group had followed.  Briefly, the chiropractor sued Norfolk and Dedham Group for its unpaid balance.  Norfolk and Dedham waited until just prior to trial to pay the balance owed and refused to pay attorneys’ fees pursuant to the Fascione decision.  The court dismissed the chiropractor’s lawsuit and the Appellate Division of the Southern District Court affirmed the dismissal.  Upon further appeal, the Supreme Judicial Court took the matter up.

In a 22-page decision, the SJC reversed the lower court’s ruling in Barron and also clarified the Fascione decision.

Attorney Robert Mazow of Mazow & McCullough was contacted by Massachusetts Lawyers Weekly to provide insight into the opinion. Mazow said the decision clarifies inconsistent and conflicting rulings out of the District courts. “For years, insurers, and many courts, have been interpreting [Fascione] to essentially gut the fee-shifting provision of the PIP statute,” Mazow said. “Based on an overly broad and essentially incorrect interpretation of Fascione, insurers would reduce or deny bills to medical providers, wait to see if suit was filed, and then, often times, tender just the disputed balance at any time prior to the entry of a judgment in order to avoid paying attorneys’ fees.”  Barron, however, sends a clear message that those tactics will no longer stand, Mazow said, adding that in ruling as it did, the court reasoned that the insurer’s interpretation of the statute “would essentially vitiate the fee-shifting provision.”

This decision makes it safe once again for medical providers who believe their bills have been wrongfully denied to file a lawsuit and not be stuck with attorneys’ fees if they are successful.

Another Important Victory For Health Care Providers

N.E. Physical Therapy v. Liberty Mutual Insurance Company

In a decision rendered on May 15, 2012, the Massachusetts Appeals Court has ruled that an automobile insurance company CAN NOT use an unreliable database to reduce a health care providers medical bills.  In the case of N.E. Physical Therapy v. Liberty Mutual Insurance Company, 11-P-1452, the three member panel of the Appeals Court held that “Ingenix data lacked the requisite indicia of reliability to be admissible evidence.”

Liberty Mutual’s insured was injured in a car accident in 2003 and sought physical therapy with N.E. Physical Therapy Plus, Inc. (NEPT).  NEPT billed Liberty $4,465.00 for the services rendered.  Liberty did not dispute the necessity of the services, however, it only paid $3,730.68 based solely on Liberty’s internal assessment, using a third-party database known as Ingenix.  Liberty claimed that, based upon the Ingenix database of medical charges, NEPT’s bills were unreasonable.

The Ingenix database, according to the decision, consists of a collection of medical charges, voluntarily reported by various insurance companies including Liberty and other insurers, which reflects an “ambiguous ‘cost’ of a specified service in a particular geographic region.”  Ingenix then uses a “relative value scale” to convert the raw data into derivative charges.

NEPT sued Liberty for the outstanding balance of $734.32 and won at the district court level.  Liberty appealed and lost again at the Appellate Division of the District Court.  Liberty appealed again to the three member panel of the Massachusetts Appeals Court.

The Appeals Court confirmed what the Appellate Division found regarding Ingenix and the fact that the database was voluntarily provided by only some insurers, that Ingenix disclaimed audit controls, that Ingenix failed to certify the accuracy of the information, and that the data was simply unreliable.  At the Appeals Court level, Liberty argued that the data was reliable and admissible under M.G.L. c. 233, § 79B (Fact statements published for persons in a particular occupation).  However, based upon the previous decision in Davekos v. Liberty Mut. Ins. Co., 2008 Mass.App.Div. 32 (2008), the Appeals Court held that the underlying unreliability of the Ingenix database made it inadmissible at trial.

This is a HUGE victory for those who provide medical services to people injured in motor vehicle accidents.  Insurance companies can no longer use databases, such as Ingenix, which have insufficient reliability, to reduce bills.

If you have any questions about this case or any other matters, please contact Attorney Robert Mazow at rem@helpinginjured.com.

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