Physicians and their office staffs are often frustrated by the Personal Injury Protection (“PIP”) system. You may want to pass this article along to the head of your billing office.
All passenger auto liability policies in Oregon are required to provide PIP coverage for prompt payment of reasonable and necessary medical expenses resulting from an accident. “Prompt” means you do not have to wait for a determination of who is at fault. PIP is “no fault.”
Three questions may occur to you:
1. How do I know who to bill?
2. How soon will I be paid?
3. What is “reasonable and necessary”?
HOW DO YOU KNOW WHO TO BILL?
First general rule: PIP follows the car. If the car is insured, PIP covers all occupants of the car, no matter who was at fault. You will usually bill the liability insurer on the car in which your patient occupied when hurt.
” Stacking:” PIP may be available from more than one source and, if so, it is cumulative. For example, John is injured as the driver or as a passenger in Mary’s Allstate-insured car. The PIP under Mary’s Allstate policy will cover John’s injuries. John happens to own a car insured by Farmers. If John’s medical expenses from the accident in Mary’s car exceed the PIP limits of Mary’s Allstate policy, the PIP under John’s Farmers policy will kick in.
Sometimes, PIP follows the injured person:
Injuries in an Uninsured vehicle: If the car in the wreck was not insured, but the injured occupant has car insurance, the PIP under the injured person’s car insurance covers that person’s injuries.
Household rule: If the car was not insured, but the injured person is in a household with an insured car, the PIP for that insurance carrier covers the injuries. So, if Trevor, a high school student living at home, is injured as a passenger in the uninsured vehicle of one of his teen age friends, and Trevor’s parents have a car insured by State Farm, the PIP provisions of his parents’ State Farm policy will cover the injuries. (In most cases, household members must be related to the policy holder by blood or marriage.)
Exception: If Trevor buys his own car but does not insure it, his parents’ PIP coverage will probably not cover injuries he suffers in his car. Since the law does not require insurance companies to provide PIP coverage for two cars in the same household for the price of one, most policies exclude injuries suffered in uninsured vehicles in the same household.
Pedestrians and bicyclists: If Trevor is walking or riding his bike and is injured by an automobile, then his parents’ State Farm PIP will cover his injuries.
(However, if Trevor moves out into his own apartment and has no car or health insurance (nor a welfare medical card), then the PIP on the car which hit him (when walking or cycling) will pay for his accident-related medical expenses.)
Motorcycles not covered: Insurance companies are not required to provide PIP on motorcycle policies or off road vehicles such as ATVs. Also, many auto policies exclude PIP coverage for motorcycle accidents. For example, Bill has insurance on both his motorcycle and his car and gets hurt while riding his motorcycle. The PIP on his car policy probably excludes coverage for injuries suffered in motorcycle accidents. Bill must look to his health carrier, if he has one, to pay his medical bills.
HOW SOON WILL YOU BE PAID?
PIP medical bills are usually paid immediately. The insurer is required by law to pay all PIP benefits promptly after proof of loss (e.g., your bill) has been submitted. Your bill carries a rebuttable presumption that your patient’s injury related treatments are “reasonable and necessary” under the PIP law. See discussion below.
Notice of Denial: The law requires the insurer to give you a Notice of Denial of your charges not more than 60 days after the insurer receives from you notice of your claim (billing) for your services. If you do not receive such notice within 60 days after the insurer receives your bill, your services shall be presumed to be “reasonable and necessary.” So, unless you hear otherwise from the insurer, you should be paid at least within the 60 days or shortly thereafter.
However, during the first 50 days after receiving your bill (claim), the insurer may raise questions regarding your claim. If so, you (the medical provider) must answer in writing within 10 business days or the 60-day denial period will be extended. Therefore, it is important that any requests for information are answered promptly.
PIP coverage is not (yet) subject to regulations (such as those found in managed care programs/HMO’s) dictating which doctor an injured person may go to. That is, there is no need to go through a “primary care physician” (“gatekeeper”). Also, there are at this time no rules or guidelines preventing the treating doctor from deciding what care is reasonable and necessary to treat the accident injuries.
WHAT IS “REASONABLE AND NECESSARY”?
Delays may occur and questions concerning treatment may be raised when the insurer is checking into whether the medical services are reasonable and necessary and/or related to the accident. The insurer may have your patient examined and your records reviewed by another doctor.
The insurer will raise questions and/or deny payment if it determines that the treatment you billed was not reasonable and necessary treatment for the injuries suffered in the accident, based on their review of your records and billings and any medical opinions they have obtained.
Disputes concerning denials are decided by arbitration. If your patient is represented by counsel, your patient’s attorney is in an ideal position to obtain payment for any of your bills which were improperly denied. You may be called upon to provide a report or sign a statement explaining and defending why your treatment was reasonable and necessary and related to the accident injuries. Your patient’s attorney will work with you on this.
Again, if your claim is not denied within 60 days after the insurer receives your bill, your services are legally presumed to be “reasonable and necessary” and the insurer must pay you.
RECENT CHANGES IN PIP LAW LIMIT HOW MUCH DOCTORS CAN BE PAID AND INCREASE MINIMUM COVERAGE
PIP now must cover qualifying injuries up to $15,000 or one year after the accident, which ever comes first. Prior to the new law, the minimum coverage allowed was $10,000. Insurance companies may write PIP coverage for more than $15,000, but they must provide coverage for at least $15,000.
On the down side, the new law limits the amount insurance companies must pay for any particular medical service. The law now says that a medical provider may not charge the person receiving PIP benefits or that person’s insurer
” … an amount that exceeds the amount the provider charges the general public or an amount that exceeds the fee schedules for medical services published pursuant to ORS 656.248 for expenses of medical, hospital, dental, surgical, ambulance and prosthetic services.”
ORS 742.524, SECTION 4 (emphasis and separation added).
ORS 656.248 authorizes the Director of the Department of Consumer and Business Services to promulgate rules for developing and publishing fee schedules for medical services provided under Oregon’s Workers’ Compensation law. The schedules direct how much doctors and other medical service providers shall be reimbursed for services provided to treat qualified work injuries and conditions. The fee schedules are to be based on any or all of these:
- Medicare fee schedules
- Fee schedules in the health insurance industry
- “Reasonable rate of markup”
- A commonly used and accepted medical service fee schedule; and/or
- The actual cost of providing medical services.
The fee schedules represent the maximum doctors may be paid. Doctors may also be paid less.
The new law applies to motor vehicle liability policies issued or renewed on or after January 1, 2004.
Obviously, this new law hurts doctors. This changes the way PIP has always operated. Up until the new law went into effect, doctors invariably received payment in full for medical services to injured patients billed to PIP insurers.
In fact, one insurance company – Farmers – in December 2003 was issued a jury verdict totaling $9.5 million in a class action lawsuit when found to have defrauded thousands of policy holders by not reimbursing the full amount of their medical expenses under PIP law. (See accompanying article.)
The new law should come as no surprise. In the Spring 2001 issue of this Medical-Legal Journal (Vol. 18), our front page story described PIP reimbursements in full for reasonable and necessary medical expenses as “your last bastion of unmanaged care.” Our article included the following comments:
” At our office, the staff spends a large percentage of its time monitoring our clients’ bills to try to make sure they are paid either by the appropriate insurance plan or out of settlement proceeds. This is what your patients want and we view it as part of good customer service. Also, we have consulted at no charge with medical providers and their office staffs to assist them in understanding the legal and practical intricacies of this aspect of medical billing in order to help insure that personal injury and workers’ compensation billings are correctly paid.
” Physicians and their professional organizations would be wise to keep a vigilant eye out for threats to the PIP law. In at least one other state (Colorado), the PIP equivalent has been subject to the types of restrictions now used in Workers’ Compensation law in Oregon: managed care organizations (MCO’s) and Preferred Provider Organizations (PPO’s). As you well know, such programs for ‘managing’ medical care have a way of whittling down your fees and second-guessing your treatment.
” For example, PIP laws may be changed to impose payment schedules to replace your reasonable and necessary fees.”
Then, after describing how Oregon’s MCO/PPO programs were trying to exclude from its panels doctors who use certain diagnostic methods whose costs insurers wanted to avoid, we concluded…
” In this and other ways, managed care programs can be and are used to discourage or exclude providers and approaches designed to diagnose and treat the full extent of a patient’s injuries. What you consider reasonable and necessary to treat your patient may be subject to limits, schedules and preferences allowed by the legislature and imposed by those paying the bills.
” Therefore, we encourage you to be alert to any proposed legislation and pro-active in protecting PIP from changes which may affect your authority to decide, and receive fair compensation for, whatever may be reasonable and necessary to treat your injured patients.”
We also encourage you to contact us with information which leads you to believe that an insurer is violating its obligations under the insurance code to deal with insured in good faith and fair dealing. An insurer’s failure to do so may be addressed by the state insurance division in order to protect your patient’s right to have medical bills paid.
State of Jefferson Medical-Legal Journal, Vol. 18, pp. 1 & 2, emphasis added.
In the immortal words of John Philpot Curran: “Eternal vigilance is the price of liberty.” Speech Upon the Right of Election, 1790. Our adversary doesn’t sleep.
Please feel free to call our office and ask for Wendy Burke or Erica Meager if you have any questions regarding PIP coverage or the current status of PIP law and reimbursement.
This article was prepared by Dennis H. Black and was based on articles in the Summer 1996, Spring 1999 and Spring 2001 issues of this Medical-Legal Journal (Vols. 1, 12 & 18).