Insurer’s Peer Review Insufficient To Deny Payment Of Medical Benefits (PA)

In Levine v. Travelers Prop. Cas. Ins. Co., the plaintiff sustained injuries in an automobile accident.  Following the accident, the plaintiff underwent various medical treatments, paid for by her insurance company, Travelers Property Casualty.  When the plaintiff attempted to attend her prescribed physical therapy, Travelers submitted this claim to a peer review organization that concluded the treatment was not reasonable and necessary.  Additionally, sometime after this, the plaintiff attended an independent medical examination, which revealed that she had reached maximum medical improvement.  Subsequently, Travelers denied payment.     

In turn, the plaintiff commenced an action against Travelers, which ultimately settled with Travelers paying for all of the plaintiff’s medical bills as well as attorney’s fees and costs.  Following this settlement, the plaintiff resumed receiving treatment.  When the providers tendered the bills to Travelers, without explanation, Travelers denied payment.  The plaintiff then commenced her second action against Travelers.  The trial court ultimately determined Travelers was in breach of contract.  As such, Travelers was ordered to pay all outstanding medical bills, interest and costs.  

Travelers appealed arguing, inter alia, that the trial court had erred in awarding attorney’s fees since the Motor Vehicle Financial Responsibility Law (“MVFRL”) only allowed the recovery of attorney’s fees if an insurer had not invoked the peer review process.  The Superior Court found in favor of the plaintiff.  First, the court noted that the insurer had presented no evidence that payment was denied based on the peer review.  Conversely, the court determined that the denial was, in fact, based on the independent medical examination.  Further, the court rejected the plaintiff’s argument that the MVFRL made no distinction between peer reviews and independent medical examinations.  The court explained the purpose of the peer review was to determine if medical care and bills were reasonable.  Conversely, the purpose behind an independent medical examination was to determine whether a plaintiff’s injuries were related an accident.  Thus, since the purpose behind these processes was different, therefore, the plaintiff was rightly entitled to attorney’s fees.

Special thanks to Colleen Hayes for her contributions to this post.  For more information, please contact Nicole Y. Brown at nbrown@wcmlaw.com.