The U.S. District Court in the case of Robin Perkins v. State Farm addresses issues inquired about by many providers. The first issue addressed was bad faith.

Robin Perkins was struck by a car while she was walking in a grocery store parking lot. She was insured by State Farm (her motor vehicle insurance policy covered her even though she was a pedestrian) who refused to pay for her chiropractic care based on a peer review performed by another chiropractor well known to do this type of work.

The Court said, and it is correct, that there has been conflicting results in Pennsylvania as to whether Act 6 provides the exclusive remedy for the patient’s claim against State Farm, or whether she can bring a bad faith claim under the Bad Faith Statute (Section 8371), which provides for punitive damages.

Although the Pennsylvania Supreme Court has not weighed in yet to resolve the conflict, the U.S. District Court, following the Schwartz opinion in the Third Circuit, ruled that such care is in fact dependant to determine whether the patient can bring a bad faith action. In this case, the patient argued that the peer reviewer does substantial work for State Farm and therefore has a financial interest in providing a biased peer review. Further, the patient alleged that the peer reviewer repeatedly gave negative peer reviews to State Farm in order to maintain its relationship with State Farm. These allegations are not part of what Act 6 covers and therefore the patient could go forward with her bad faith claim.

A federal jury in Philadelphia on March 26, 2009 found in favor of State Farm Mutual Automobile Insurance company against Dr. Arnold Lincow, two other osteopaths, and two chiropractors, as well as four corporate entities. The jury assessed $4,049,741.00 against each of the defendants for violation of two parts of RICO, as well as statutory and common law fraud. The jury also assessed punitive damages against Dr. Lincow in the amount of $5,000,000.00 (five million dollars), and $600,000.00 (six thousand dollars) against each of the other defendants.

State Farm argued that from 2000 until the present Dr. Lincow perpetrated a scheme with fellow defendants to exhaust all available benefits under a patient’s motor vehicle medical insurance. The jury agreed with State Farm that Dr. Lincow and his co-defendants performed inappropriate and medically unnecessary testing and treatment, created standardized treatment plans and reports, billed for services that were never received or more costly than actually rendered, submitted fake billing information and fake supporting documentation , employed untrained and unlicensed personnel to provide treatment as if it were provided by licensed and trained personnel, misrepresented the identity of the treating physician, and used a physician to incorrectly diagnose testing as positive (EMG and nerve conduction tests) for which he received a kickback.

The trial lasted three weeks and various attorneys associated with Dr. Lincow had their files subpoenaed to provide evidence as to the RICO scheme. The counterclaims filed by the defendants in the case were rejected by the jury. The defendants have 30 days from March 26, 2009 to file an appeal.

In my last newsletter, I stated that “bills must be sent out by the carrier to the PRO within 30 days of receipt.” Carriers actually have 90 days to refer a file to a PRO. However, if a carrier does so after 30 days, the carrier is obligated to pay the provider’s bill pending PRO review. Providers should be aware that if the peer review finds that the care was not medically necessary, the provider is responsible for repayment of funds received for that care with interest.

The personal injury settlement or verdict often turns on reports prepared by the medical provider. A well written and edited report by the treating doctor goes a long way towards getting the case resolved for the attorney representing the patient. One of the worst things a provider can do is write “Signed but not read” at the bottom of the report. Something the provider can do is write about various anecdotal incidents that the patient may have related to the provider during the course of treatment. Not being the lift a child when the parent comes home at night because of back pain from the accident is something a jury can relate to. Not being able to mow the lawn, while seemingly innocuous, could go a long way towards overcoming the limited tort threshold. Perhaps most important of all is providing requested reports on a timely basis. There is nothing more frustrating for a plaintiff attorney to do than constantly call the provider’s office requesting a report on the patient.

Many doctors are decrying the current economic situation because there has been a decrease in office fees. Many patients may not have the funds to pay for deductibles or have insurance at all. What these same doctors do not realize is that much of their accounts receivable contain unrealized money that could offset some of the downturn in their fees.

My office has represented chiropractors throughout the Commonwealth in obtaining money from insurance companies who will not pay for care rendered to motor vehicle accident victims. Many of these doctors have allowed large sums of money to accumulate for non-payment for motor vehicle accident victims for various reasons. Some do not realize that they can sue the insurance carrier for recovery. Some think they will sue the carrier themselves in small claims court, but never get around to it. Whatever the reason, this is money which should be in the doctor’s bank account and not the insurance carriers.

The amount of work on your part is relatively painless. A copy of any peer review as well as a statement showing the total amount of money due and owing can be faxed or emailed to my office to get the process started. We then place the case in suit after you send us the filing fee, which is typically around $100.00. The majority of these cases are settled without your having to appear in Court.