Herd Chiropractic Clinic, P.C. v. State Farm Mutual Automobile Insurance
619 Pa. 438
Pa.2013Background
- MVFRL §1797 caps customary charges for treatment and requires providers to seek payment from insurers, not patients.
- The statute creates PROs to evaluate reasonableness/necessity of treatment; if PRO finds not reasonable or necessary, provider may not collect related payments.
- Provider Herd Chiropractic treated patient; insurer State Farm submitted invoices to a PRO; PRO found some treatments not reasonable/necessary; insurer refused payment.
- Provider sued for unpaid bills ($1,380), treble damages, and attorneys’ fees under §1797(b)(4) and (6) after PRO determination.
- Common pleas and Superior Court awarded attorneys’ fees under §1797(b)(6) because treatment was found reasonable/necessary, despite peer review.
- This Court held there is no express statutory basis for fee-shifting when peer review is used; fees are not recoverable absent express authorization.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1797(b)(6) allows attorneys’ fees following a court determination when peer review was pursued | Provider argues §1797(b)(6) applies regardless of peer review | Insurer contends §1797(b)(6) only applies when no peer review occurred | No express fee-shifting authorization when peer review is used |
| Whether §1797(b)(4) authorizes fee-shifting where the insurer used the PRO process | Provider argues fee shifting should apply after court finds necessity, even with PRO | Insurer argues §1797(b)(4) applies only when no PRO challenge occurred | §1797(b)(4) and (b)(6) require absence of PRO challenge; no fee shift here |
| Whether due process or statutory interpretation requires broader fee shifting beyond the statute's text | Provider asserts due process and policy favor broad access; broader fee shifting warranted | Insurer asserts American rule; no explicit statutory basis for broader fees | Statutory text controls; no duty to broaden fee-shifting absent legislative change |
Key Cases Cited
- Merlino v. Delaware County, 556 Pa. 422 (1999) (no fee recovery absent express statutory authorization)
- Terminato v. Pa. Nat’l Ins. Co., 538 Pa. 60 (1994) (exhaustion not required; PROs lack neutrality; judicial review allowed)
- Barnum v. State Farm Mut. Auto. Ins. Co., 430 Pa. Super. 488 (1993) (insurer’s liability limits where PRO review followed)
- Foster (Pennsylvania Medical Providers Association v. Foster), 149 Pa. Comm. Ct. 203 (1992) (regulation allowing PRO appeal addressed due process concerns)
- Kuropatwa v. State Farm Ins. Co., 554 Pa. 456 (1998) (insurer not insulated from §1797(b) remedies when PRO involved)