Doctor's Choice Physical Medicine & Rehabilitation Center, P.C. v. Travelers Personal Insurance Co.
128 A.3d 1183
| Pa. | 2015Background
- In 2004 Angela LaSelva was injured in an auto accident and received chiropractic treatment from Doctor’s Choice (Provider); Provider billed Travelers (Insurer) under the MVFRL.
- Insurer timely referred Provider’s bills to a peer review organization (IMX) and retained Dr. Cavallo to assess reasonableness/necessity; IMX/Dr. Cavallo concluded some treatments were unnecessary and Insurer denied payment for those items.
- Provider sued Insurer in Dauphin County, arguing all treatment was necessary and that the PRO failed to follow PA regulatory standards (31 Pa. Code §69.53(e)); Provider sought statutory attorneys’ fees under 75 Pa.C.S. §1797(b)(6).
- The trial court found for Provider, rejected Dr. Cavallo’s peer-review as invalid, and awarded fees; after Herd was decided (holding §1797 does not authorize fees for challenges to peer-review determinations) the trial court vacated the fee award as compelled by Herd.
- The Superior Court reversed, reasoning that because the PRO’s review was invalid (did not follow statutory/regulatory rules), Insurer had not validly “challenged before a PRO” and thus statutory fee-shifting under §1797(b)(6) applied.
- The Supreme Court granted review and reversed the Superior Court: it held that a carrier’s timely submission of bills to a PRO constitutes a “challenge before a PRO” under §1797, and Herd controls — there is no statutory authorization for fees when the insurer pursued peer review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an insurer’s timely submission of bills to a PRO counts as a “challenge before a PRO” under 75 Pa.C.S. §1797(b)(4), thereby precluding attorneys’ fees under §1797(b)(6) | Provider: “Challenge” should mean a valid, completed peer-review determination; if the PRO fails to comply with regulations the insurer did not effectively challenge before a PRO, so fees should apply | Insurer: Submission to an approved PRO is a statutory challenge; plain meaning of “challenge” is met by referral and Herd forecloses fee awards for peer-review challenges | Held: Submission to a PRO is a “challenge before a PRO.” Herd controls; §1797 does not explicitly authorize fees for provider challenges resulting from peer-review determinations. |
| Whether Superior Court’s construction (that “challenge” requires a valid completed peer review) is permissible | Provider: Interpreting “challenge” to require valid compliance prevents insurers from escaping fee liability when PROs fail and protects providers who lack contractual remedies | Insurer: That construction departs from the statutory text and improperly assigns oversight burdens to insurers instead of the Insurance Department | Held: Superior Court’s construction conflicts with plain meaning and Herd; courts must apply §1797 as written and leave policy/fee-shifting changes to the legislature. |
Key Cases Cited
- Herd Chiropractic Clinic v. State Farm Mut. Auto. Ins. Co., 619 Pa. 438, 64 A.3d 1058 (2013) (held §1797 does not authorize attorneys’ fees for provider challenges to peer-review determinations)
- Terminato v. Pennsylvania Nat’l Ins. Co., 538 Pa. 60, 645 A.2d 1287 (1994) (recognized potential bias in insurer-funded PROs and limited judicial deference to PRO determinations)
- Levine v. Travelers Prop. Cas. Ins. Co., 69 A.3d 671 (Pa. Super. 2013) (distinguished: involved an IME regarding causation, not a peer-review challenge to reasonableness/necessity)
- Seebold v. Prison Health Servs., Inc., 618 Pa. 632, 57 A.3d 1232 (2012) (explains role of courts versus legislature in addressing broad policy/regulatory issues)