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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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