Attorney General Opinion, Frank J. Kelley, Attorney General;
Opinion No. 6865; August 18,1995;
MTLA File No. OP-1070-11
STATUTORY INDEXING:
Providers Entitled to Charge Reasonable Amount for Services [§3157]
Medical Bill Auditing to Determine Reasonable Charges [§3157]
Balance Billing Patients for Amounts Not Covered by Other Insurance [§3157]
PIP Benefits Payable as Loss Accrues [§3142(1)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this Opinion, the Attorney General addressed several issues relating to interpretation of the no-fault act with respect to no-fault coverage for medical expenses and determination of the reasonableness of such charges.
The first question presented was whether a health care provider could enter into an agreement with a person insured by a no-fault automobile insurance carrier, requiring the insured to pay all costs of medical treatment not covered by the insured's no-fault insurance. The Attorney General held that the no-fault act does not prohibit a health care provider from entering into an agreement requiring the insured to pay all costs of medical treatment not covered by the insured's no-fault insurance. It is clear that a health care provider rendering services to a person for injuries covered under that act may charge only a "reasonable amount" for the products, services and accommodations, and further, that the no-fault insurance company is responsible for paying those reasonable charges. Section 3157 of the act limits the amount that a health care provider may charge for medical goods and services provided to a person injured in a covered accident to "a reasonable amount for the products, services and accommodations rendered." Further, that statute provides that the charge shall not exceed the amount the provider or institution customarily charges for like products, services and accommodations in cases not involving insurance.
However, a health care provider is not prohibited from entering into an agreement under which the patient agrees to pay any of the costs of treatment which are not covered by the no-fault policy. An example would be treatment for a pre-existing condition not affected by the covered accident.
The Attorney General also held that the no-fault act does not contain any provisions explicitly prohibiting a no-fault insurance company from challenging a health care provider's attempt to enforce a payment agreement between the provider and the insured. To the contrary, no-fault insurance carriers have been directed by the Commissioner of Insurance to defend their insureds from claims by health care providers. Thus, if the fees which the health care provider seeks to collect under the agreement with the insured concerned goods or services which are "arguably within the scope of the insured's no-fault coverage" the no-fault insurer not only may, but must defend the interests of its insured.
The next question concerned whether a no-fault automobile insurance company could use the services of a subsidiary company in determining the reasonableness of charges to its insureds by a health care provider, or must it use a disinterested third party in determining reasonableness. The Attorney General held that the no-fault insurance act does not prohibit a no-fault automobile insurance company from using a subsidiary company to assist it in determining the reasonableness of the amounts charged its insured for health care. There is no legislative requirement that a no-fault auto insurance company use the services of a disinterested third party in determining reasonableness.
The last question concerned how long a no-fault carrier could delay payment to a health care provider in the event of a dispute over the proper amount of payment. The Attorney General held that §3142 requires payment within 30 days of reasonable proof of the fact and amount of loss.
