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Pending PIP Litigation on the East and West Coasts Could Impact States In Between

PropertyCasualty360 published a report about pending automobile personal-injury litigation in California and New York that could have a lasting impact if the decisions spread to other jurisdictions. Courts will determine allowable evidence for suits involving these insurance claims.

East Coast

In New York, insurers investigated radiologist Andrew Carothers, a suspected illegal straw owner after he filed 20,000 lawsuits against auto-insurance carriers. After insurers refused to pay Carothers, he flooded the state’s courts with more than 20,000 lawsuits seeking collection for unpaid “services.” The civil cases were consolidated, and the jury agreed Carothers was fraudulently engaged in the corporate practice of medicine. The Appellate Division affirmed, so Carothers went to the New York Court of Appeals, where the case awaits a decision.

A favorable decision can deter scams like Carothers’ in other states that forbid the corporate practice of medicine. Fraudsters who often quickly expand operations to line their pockets in other states could be deterred. A decision is expected in 2019.

West Coast

Dave Pebley was involved in a serious vehicle accident, sought medical care and filed suit. He had health coverage but decided not to submit his bills for payment. That is because, under California law, the jury would only hear about the amount paid by his health insurer as the measure of his medical expense while Pebley was billed at the top rate for medical services by refusing to use his health insurance.

The insurer cried foul, asserting that such actions mislead the jury, and are fraudulent because medical providers never expect to receive such high payments. They argued the plaintiff may present the higher medical bills but must provide expert testimony to prove the charges are fair and reasonable. Similarly, the defendant or their insurer may present counter-evidence as to what the health providers normally accept for payment of those services.

The California Second District Court of Appeal reasoned that juries should be allowed to ultimately decide the appropriate charge for the medical services. Parties are lining up to support an appeal of the case to the state Supreme Court. If Pebley succeeds in California, potentially winning the $3.6 million he seeks, the strategy of refusing to use health insurance can be expected to spread rapidly to other states.

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Filed under auto insurance, Auto Insurance Fraud, Fraud, Insurance, Insurance Claims, Insurance Defense, Insurance Fraud, PIP, PIP/No Fault, Uncategorized