The Commonwealth Court of Pennsylvania recently issued an important decision in the case of Houston v. SEPTA

, No. 1445 C.D. 2010.  The issue in this case was whether SEPTA, as a self-insured transportation authority, was required to comply with the cost containment provisions of the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL, part of which is known as Act 6).  After disposing of some preliminary issues dealing with standing and class actions certification, the Court held that SEPTA was in fact required to comply with the cost containment provisions of Act 6.

In practical terms, this decision is a victory for those injured in an accident involving a SEPTA bus.  SEPTA, as a self-insured entity, provides $5000 in medical visits for injured bus passengers not having their own insurance who were involved in an accident.  Prior to this ruling, SEPTA had paid bills in the full amount invoiced by providers until the $5000 limit was reached.  Under Act 6, providers are reimbursed at a reduced rate for services, equal to 110% of the reimbursement for Medicare.  This amount is typically 60-70% what a provider charges to a cash basis patient.  Since SEPTA must now pay the MVFRL rates, individuals injured in a SEPTA bus accident will be able to receive more care from their different medical provider before becoming personally responsible for payments, because there is less chance any one provider can alone exhaust the $5000 available from SEPTA.  Providers should be aware that these payments are made on first-come, first-serve basis.  Therefore, bills should be promptly submitted to ensure payment.