Freedom Medical Supply Inc. v. PMA Capital Insurance

41 Pa. D. & C.5th 97, 2014 Phila. Ct. Com. Pl. LEXIS 319
CourtPennsylvania Court of Common Pleas, Philadelphia County
DecidedAugust 8, 2014
DocketNo. 003988
StatusPublished

This text of 41 Pa. D. & C.5th 97 (Freedom Medical Supply Inc. v. PMA Capital Insurance) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Freedom Medical Supply Inc. v. PMA Capital Insurance, 41 Pa. D. & C.5th 97, 2014 Phila. Ct. Com. Pl. LEXIS 319 (Pa. Super. Ct. 2014).

Opinion

GLAZER, J.,

Over the last 12 years, this trial court1 has hosted a series of class actions brought by medical providers against various insurance companies that neglected to pay statutorily mandated interest on late reimbursement payments under the Workers Compensation Act (“WCA”) and the Motor Vehicle Financial Responsibility Law (“MVFRL”). While [99]*99the statutes foci are quite different — the WCA governs medical services provided to employees injured at work, and the MVFRL governs medical services provided to people injured in auto accidents — both statutes require that an insurer pay claims within 30 days after it is billed properly by a medical provider or that it pay interest on the amount it does not pay timely.2

One of the earlier of this court’s medical provider class actions was filed in 2002, under the MVFRL, by Richard S.Glick, D.O. against Progressive Northern Insurance Company (“Progressive”).3 This court certified the class of medical providers in Glick4 and made rulings as to Progressive’s liability for payment of interest.5 Those rulings were eventually appealed.

While Glick was being litigated before this court, additional, similar, class actions were filed by plaintiff Freedom Medical Supply, Inc. (“Freedom”). Specifically, Freedom filed the present action against the PMA Companies (“PMA”) under the WCA,6 and it filed an action against American Independent Insurance Company [100]*100(“AIICo”) under, the MVFRL.7 Freedom also filed several other class actions against other insurance companies under the WCA and MVFRL, which actions either settled or are in the process of settling.

In this case, this court certified the following class against PMA:

All providers who submitted bills and reports under the Pennsylvania Workers Compensation Act, 77 P.S. §1, et seq., as amended (the “Act”), to one or more defendants, and who received a payment which was issued more than thirty (30) days after receipt of the bill and report by defendant(s), but which payment did not include interest earned on or after April 8, 2002, or included less than the amount of interest provided for in the Act.8

Similarly, in the AIICo case, this court certified a class of medical providers who were owed interest under the MVFRL.9

The parties in this PMA action then proceeded to conduct contentious merits discovery, and in November, 2013, this court held a trial of this matter. The parties submitted their proposed findings of fact and conclusions of law on January 31, 2014. One week prior to those submissions, the Superior Court’s decision in Glick was announced.

In the Glick opinion, the Superior Court held that the class of medical providers should not have been certified under the MVFRL because “what will constitute [101]*101‘reasonable proof’ [of the amount of benefits due] is a question of fact answered on a case by case basis after review of relevant evidence addressing several factors, including coverage, causation, and medical necessity.... This factual inquiry requires individualized determinations not readily suitable for class action.”10

After the Glick decision was issued, defendant in AIICo filed a motion for reconsideration on the issue of class certification. In addition, this court allowed PMA to file a motion to decertify the class in this action, which motion was not fully briefed until May, 20, 2014.

On June 9, 2014, this court granted the AIICo defendant’s motion for reconsideration and decertified the class in that case. That decision has been appealed. The precise issue that was before the Superior Court in Glick was before this court in AIICo — namely whether a medical provider’s submission to the insurer of a standard HCFA-1500 or UB-92 form11 is sufficient evidence of the benefits due to the provider under the MVFRL that it triggers the thirty day period in which the insurer must pay the claim or pay interest if the claim is paid late.

Although the Superior Court’s Glick opinion is unpublished and generally non-precedential,12 this court was compelled for consistency’s sake to adopt the Glick court’s reasoning as this court’s own in AIICo because the [102]*102two classes of medical providers overlapped significantly. Now, in its motion to decertify the class, PMA asks this court to apply similar reasoning in this WCA case.13

Although the MVFRL and WCA evidence the same legislative intent — to encourage insurers to pay provider claims promptly by imposing an interest penalty for late payment — the two statutes use different language to create the disincentive to late payment. The MVFRL provides that “[bjenefits are overdue if not paid within 30 days after the insurer receives reasonable proof of the amount of the benefits.”14 The WCA is worded differently; it provides that “[t]he employer or insurer shall make payment and providers shall submit bills and records in accordance with the provisions of this section. All payments to providers for treatment provided pursuant to this act shall be made within thirty (30) days of receipt of such bills and records.”15 However, the difference in language is not sufficient to create a difference in outcome. If a class of late paid providers cannot be certified under the MVFRL, then it should not be certified under the WCA either.

The question before the Glick court and before this court in AIICo was whether the HCFA1500 billing form, which is routinely submitted by the provider class members to the insurer, constitutes “reasonable proof of the amount of [103]*103the benefits” so as to trigger the statute’s 30 day payment period. The question before this court in this WCA case is what constitutes submission of sufficient “bills and records” to trigger the insurer’s duty to pay within 30 days.

While the HCFA 1500 appears to qualify as a “bill” ■under the WCA,16 it is not also the requisite “report.”17 Instead, providers are apparently required to submit the necessary reports on a form known as LIBC-9, which calls for information different than and in addition to what is set forth on the HCFA-1500.18

For the same reasons that the HCFA 1500 alone is [104]*104not reasonable proof of the amount of benefits under the MVFRL, the HCFA 1500 alone cannot trigger the running of the 30 day period under the WCA. Other documentation is needed, and such documentation will vary from patient to patient.19

As the Superior Court reasoned in Glick, which reasoning this court adopted in AIICo, and as borne out by the requirements of the WCA and its implementing regulations:

Receipt of the HCFA-1500 Form is merely indicative of treatment and provides prima facie evidence that such treatment was medically justified. It does not establish coverage for such treatment.

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Related

Boring v. Erie Insurance Group
641 A.2d 1189 (Superior Court of Pennsylvania, 1994)
Samuel-Bassett v. Kia Motors America, Inc.
34 A.3d 1 (Supreme Court of Pennsylvania, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
41 Pa. D. & C.5th 97, 2014 Phila. Ct. Com. Pl. LEXIS 319, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freedom-medical-supply-inc-v-pma-capital-insurance-pactcomplphilad-2014.