New England Biz Law Update
An insurance carrier that was sued under the personal injury protection statute by physical therapists for refusing to pay for treatment they had provided to injured policyholders could not force the providers to submit to examinations under oath in conjunction with their claims, a state District Court judge has ruled.
The defendant insurer noted that the Massachusetts Standard Automobile Policy states that “anyone covered under [a] policy” and “any person seeking payment” must cooperate with the insurer, including submitting to an examination under oath at a place designated by the insurer. Accordingly, the defendant argued, the providers’ refusal to submit to examinations under oath constituted non-cooperation that justified its refusal to pay.
Judge William P. Hadley disagreed, pointing out that the language in the standard auto policy conflicts with language in the PIP statute itself, under which the non-cooperation defense is limited to non-cooperation by an “injured party.”
Pursuant to the PIP statute, G.L.c. 90, §34M, “an unpaid medical provider is deemed a party to a contract only insofar as is necessary to allow it to pursue a statutorily authorized breach of contract action against an insurer when payment of PIP benefits for reasonable and necessary services is not made,” Hadley wrote, granting the plaintiff providers’ motion for partial summary judgment.
“Even if the policy could reasonably be interpreted as the defendant suggests, such an interpretation conflicts with the purpose and the language of the governing statute that specifies the parties’ rights and remedies regarding PIP claims,” Hadley added.
The three-page decision is VIP Physical Therapy, Inc. v. Government Employees Insurance Company, Lawyers Weekly No. 16-001-15. The full text of the ruling can be ordered by clicking here.
‘Recent trend’
Stephen L. Holstrom of Alekman DiTusa in Springfield represented the plaintiff providers. While acknowledging that the decision is not binding on any court, he said it sends a strong message to the insurance industry that no matter what a policy says, a carrier is still governed by the PIP statute.
That is particularly important in light of a recent trend of insurers insisting that providers attend examinations under oath — or EUOs — like the ones demanded in VIP Physical Therapy, usually at a time and place selected by the insurer, at which the provider may be forced to provide hours’ worth of testimony about a medical bill, Holstrom said.
“If the provider refuses, they assert that the provider isn’t cooperating with the insurer and pay no money whatsoever to the provider,” he said.
Hadley’s ruling gives medical providers reassurance that they can treat auto accident victims without fear of having to deal with such a situation, Holstrom said.
“I suspect that even a nonbinding decision may sway insurers from insisting on provider EUOs, especially where the decision [in VIP Physical Therapy] is so clear that the practice is in contravention of the language of the statute,” he said.
Robert E. Mazow of Law Office of PIP Collect in Salem represents medical providers in PIP cases. While not involved in VIP Physical Therapy, he called the ruling an “important reminder” to auto insurers that the primary purpose of the PIP statute is to provide those injured in car accidents with a quick and efficient method for payment of related medical bills.
“Requiring that medical providers jump through hoops and attend what are essentially depositions without boundaries puts an unfair burden on providers and their patients and stretches the PIP statute beyond the breaking point,” Mazow said. “Moreover, the PIP statute simply cannot be logically construed so as to extend the duty to provide an EUO beyond insureds and claimants.”
Francis A. Gaimari of Fireman & Associates in Needham also represents medical providers in PIP suits and said whenever one of his clients is faced with an insurance company demanding an EUO, he tells the client to ignore it.
“These requests for provider EUOs are bluff, tongue-in-cheek requests that no lawyer, not even the one requesting the EUO, could possibly take seriously,” Gaimari said.
Gaimari said he has had several providers refuse to show up to EUOs and has never seen a judge deny a PIP claim on those grounds.
“I would literally love to have a case where an insurer refused to pay bills because a medical provider refused to attend an EUO,” he said. “It has bad faith, Chapter 93A and treble damages written all over it. Maybe one will come along, though doubtful.”
Shahan J. Kapitanyan of Smith & Brink in Braintree represented the insurer. He could not be reached for comment prior to deadline.
EUO demand
Lilia P. Girchenko, Lilia A. Girchenko and Valentina Akimova were injured in a car accident on Sept. 4, 2012.
All three were covered by an insurance policy issued by defendant Government Employee Insurance Co. and sought treatment for their injuries from plaintiff VIP Physical Therapy.
A physician and three physical therapists at VIP provided what they claimed was reasonable and necessary treatment to the injured parties and charged the insurer a total of $19,490.
The insurer refused to pay, citing an independent medical examination performed by a different physical therapist and a subsequent examination by a physician. According to the insurer, the independent medical examinations showed that VIP’s treatment of the injured parties was excessive, unreasonable and unnecessary and that the injuries were not established as being causally related to the accident.
On May 16, 2013, after having conducted EUOs of the injured parties, the insurer requested to conduct EUOs of each of the four providers at VIP who treated the individuals.
Plaintiff’s counsel objected to the taking of the EUOs, and the providers never appeared.
At some point, VIP sued the insurance carrier in District Court, alleging violation of the PIP statute. The insurer asserted a defense of non-cooperation stemming from the providers’ failure to submit to EUOs. VIP responded with a motion for partial summary judgment on grounds that the insurer had no authority under the PIP law to make such demands.
Conflicting language
Addressing VIP’s motion, Hadley noted the conflicting language in the PIP statute and the Massachusetts Standard Automobile Policy.
Under the PIP statute, the judge pointed out, an “injured person” must submit to a physical examination by a physician when reasonably required by a PIP insurer while doing “all things necessary” to enable the insurer to determine the amounts due for treatment.
However, the judge continued, the PIP statute does not state that an “unpaid party” must submit to a physical examination and it does not provide that non-cooperation by an “unpaid party” is a defense to a PIP claim.
Nonetheless, the judge said, the statute considers an “unpaid party” a party to a contract with the insurer and it can bring an action in contract to recover any amounts due.
On the other hand, the judge observed, the standard auto policy provides that not only injured persons, but all unpaid claimants, must cooperate with the insurer by sending legal documents on demand, submitting to an EUO at a place designated by an insurer, and submitting to an examination by doctors selected by the insurance carrier.
Looking at those differences, the judge said, the insurer was interpreting the PIP statute too broadly in its assertion that by being deemed a party to a contract with the insurer, a medical provider stepped into the shoes of the injured insured in every respect.
“If this were the case, in theory, it would necessarily follow that an insurer could demand that a treating healthcare provider submit to a physical examination, and charge the provider with a failure to cooperate if he refused,” Hadley wrote.
Moreover, he said, “requiring healthcare providers either to have their employees appear for EUOs at locations selected by insurers, or refuse and litigate the reasonableness of the insurer’s demand, would undermine the primary goals of no-fault insurance, to provide prompt payment of PIP benefits and reduce litigation.”
Because the insurance company had no authority under the PIP law to demand that VIP’s providers submit to such a demand, Hadley concluded, partial summary judgment should enter for the plaintiff.
CASE: VIP Physical Therapy, Inc. v. Government Employees Insurance Company, Lawyers Weekly No. 16-001-15
COURT: State District Court
ISSUE: Could an insurance company that was sued under the PIP statute by physical therapists for refusing to pay for treatment they had provided to injured policyholders force the providers to submit to examinations under oath in conjunction with their claims?
DECISION: No
