*1 60 A.2d Petition For Reinstatement J.
In the Matter of John McGEE. 679, Disciplinary Docket No. 2. No. Disciplinary 108 DB Board No. 89. Pennsylvania.
Supreme Court of 3, Aug. 1994. ORDER PER CURIAM: 1994, consider- NOW, day August, upon this 3rd of
AND Disciplinary and Recommendations Report ation of the 7, July Pennsylvania dated Court of Supreme Board 1994, granted. is the Petition for Reinstatement 218(e), Pa.R.D.E., petitioner is directed to Rule
Pursuant
investigation
Board
incurred
expenses
pay
the Petition for Reinstatement.
processing
Jus-
MONTEMURO, J.,
designation
as Senior
sitting by
R1801,
Docket No. 94
Assignment
to Judicial
pursuant
tice
J.,
LARSEN,
see
unavailability of
No. 127 Judicial
due
28,
1,
1993.
Docket No.
filed October
Administration
v. INSURANCE PENNSYLVANIA NATIONAL COMPANY, Appellee. Pennsylvania. Supreme Court of Argued 1994. March Aug. 1994. Decided *3 Collis, Brennan, Daley, for Pittsburgh, T. Robins & Michael appellant. Caine, Sloane, Abram, DiPasqua, L.
Leonard A. Jennifer Ronca, Ronca, Raffaele, Media, R. James Schmidt & Sloane & Pennsylvania Lawyers for curiae Trial Harrisburg, amicus on of appellant. Ass’n behalf Fitch, Crumrine, Washing- McCreight,
Colin E. Marriner & ton, for appellee. McCabe, Duane, Heckscher, Philadel- Morris &
James J. Farm Mut. Ins. Co. phia, amicus curiae State FLAHERTY, ZAPPALA, NIX, C.J., and Before MONTEMURO, CAPPY, PAPADAKOS, JJ. CASTILLE OPINION ZAPPALA, Justice. of first question impression appeal presents
This Law Responsibility Financial under the Motor Vehicle (“MVFRL”), The seq. Pa.C.S.A. 1701 et MVFRL (Act 6). 7,1990, P.L. February amended the Act of evaluating plan peer amendment established services, treatment, or accommodations products health care in an automobile accident. person injured to a of an insured must seek reconsideration issue is whether an in initiating before an action peer adverse review decision under an court to recover medical benefits common is not We hold that an insured policy. automobile insurance peer of a review decision request reconsideration required to court. proceeding automobile requires to the MVFRL The 1990 amendment jointly separately or with insurers to contract or “PRO” organization” “Peer review organization or “PRO”. Organization Review with which “Any is defined as Peer or Financing Administration the Com- Federal Health Care review of Medicare or medi- contracts for medical monwealth services, company, health care review cal assistance commissioner, engages approved by the determining that medical and rehabilitation purpose necessary economically provided.” medically services are *4 § evaluates the medical treat- 75 1702. The PRO Pa.C.S.A. injured in an to an individual provided ment or services challenges the insurer the reason- automobile accident when treatment or service. necessity ableness and by a the insurer is set challenge review for 1797(b), provides: forth in 75 Pa.C.S.A. which (b) challenges plan for to reasonableness Peer necessity of treatment—
(1) plan. jointly shall contract or Peer review —Insurers for any peer organization established separately with treatment, services, health care purpose evaluating of any injured person. products or accommodations confirming be of purpose evaluation shall Such treatment, con- services or accommodations products, such performance standards of are professional form the An be medically necessary. challenge insurer’s must made days receipt of to a of the insurer’s PRO within may or services or be made at bill for treatment provider’s continuing time treatment or any for services. (2) insurer, or in- provider reconsideration —An PRO of a reconsideration the PRO may request sured request for reconsider- PRO’s initial determination. Such of days made within 30 the PRO’s initial ation must be the ser- requested If reconsideration for determination. or licensed health profession- vices of other care physician be, al, reviewing reviewing then individual must or the include, an in the specialty individual same as panel must subject to review. the individual (3) insurer Pending determinations PRO —If the of challenges days receipt of a bill for medical within services, need not treatment or rehabilitative insurer subject challenge provider to the until determina- pay tion has made the PRO. The insured been treatment, accommodations, or ser- products billed process. during vices (4) Appeal to court —A of medical treatment or provider or or insured may rehabilitative services merchandise past a court an insurer’s refusal to challenge pay before or or future medical treatment or rehabilitative services merchandise, or necessity the reasonableness which the challenged insurer PRO. Conduct consid- has subject to a payment ered to be shall be treble wanton damages injured party. to the
(5) or in- determination in favor or sured —If a PRO determines that medical treatment medically neces- rehabilitative services merchandise were *5 outstanding the provider must to the sary, pay the insurer on amount per year at 12% amount interest plus review. pending the insurer withheld in- provider or (6) in favor of determination Court (4), a court determines If, paragraph pursuant sured — or mer- services treatment or rehabilitative that medical pay must necessary, the insurer medically were chandise 12%, interest at plus amount outstanding the provider the attorney all fees. challenge of the and well as the costs as is deter- (7) in insurer —If it favor of Determination provided has provider that a a PRO or court mined services or or rehabilitative medical treatment unnecessary treatment, of such provision or that future merchandise both, or the unnecessary, merchandise will services or unneces- medically payment not collect provider If treatment, provider the services or merchandise. sary paid the amount it must return payment, collected such has In no case days. year within per interest at 12% plus payment, of the to return the failure does payment responsibility to assume obligate the insured treatment, or merchandise. services 21, 1989, Patricia Terminate Appellant On October of the acci- At the time in an automobile accident. involved Appellee, dent, policy insured under a issued she was Na- (Pennsylvania Company Insurance Pennsylvania National tional). medical treatment submitted bills for She accident to the insurance injuries sustained her for 1797(b), sub- company the insurance Pursuant to company. organization. Options, the claim to mitted the insurance sent a letter to January Options On physician summarizing opinion company indicated claim. The letter had reviewed Terminato’s who that the medical treatment had concluded physician that the motor related to her directly unequivocally “was stating: as quoted physician accident.” The letter vehicle received, that work-up she my opinion It is also her spine, cervical x-rays, C7 of the being spine cervical neurological evalua- chemistry laboratory studies nor necessary directly related her medically tion were *6 October, the in the At the time of evaluation auto accident. subjective of some ten- really only complaints had patient findings includ- positive objective There no derness. were Certainly nothing there was to ing neurological findings. no any diagnostic treatment or other indicate that specific was indicated. evaluation February 4, 1991, the By letter insurance
R. 13. dated attorney not that it would be company advised Terminato’s payment “they for of the medical bills because responsible related the automobile accident on 10-21-89.” not [were] R. 15. in complaint Terminate filed a the April
On County alleging of Common Pleas that the Washington Court the company responsible payment of medi- insurance out motor The insur- arising cal bills of the vehicle accident. denying company responsibility pay- ance filed an answer the medical services ment because bills unnecessary. company were insurance sub- Terminator asserting filed a to dismiss the sequently complaint, motion standing pleas had to file in common that Terminate no suit requested she had not reconsideration the court because review peer initial determination. granted court the motion and dismissed the com-
The trial trial that plaint July on 1991. The court concluded under 1797(b)(2), peer an initial request for reconsideration of made and disposed review decision must be before the jurisdiction court to review may common exercise the The trial construed of an ad- matter. court reconsideration a mandatory review decision as administrative peer verse prior obtaining judicial that must remedy be exhausted Because Terminate did seek reconsideration of review. determination, court that there had the found Options’ peer organization a final decision review been jurisdiction it to to review the initial would enable exercise affirmed, Superior Pa.Super. Court decision. 1032, holding A.2d that once remedies statutory their
invoked, must exhaust parties brought in an action and seek reconsideration pleas court. common remedies of administrative of exhaustion
The doctrine A peer procedure. application has no a court of agency, is not an administrative organization arising out disputes to resolve record, a tribunal authorized policy. insurance of an automobile in that it is neither panel A is similar to arbitration However, a agency. nor an administrative of record court panel from an arbitration significantly dissimilar PRO is at time the both parties latter is selected by a body is a established arises and former dispute society solely selected local professional state or *7 dispute arises. insurer before the Foster, 136 v. Pa. Chiropractic Federation Pennsylvania 583 A.2d Cmwlth. process PRO should
Pennsylvania National asserts consistent with doc- statutory construction be afforded that is Conceding a PRO not trine of remedies. of exhaustion Pennsylvania argues National that it agency, an administrative type akin to the duties fact-finding function performs by the General agencies to administrative normally allotted that the lower courts erred Assembly. argues Terminato 1797(b)(2) § statutorily is not a because reconsideration under pursuing relief remedy must be exhausted before defined that proce- peer in a contends that the court law. She method mandatory as a and exclusive designed dure was and, coverage insurance there- to claim of disputed resolve fore, remedy requires that exhaustion. statutory cannot 1797(b)(2) § that “an emphasizes language Terminato insurer, request a reconsideration or insured provider that to demonstrate the PRO of the PRO’s decision” required. than rather procedure permitted, reconsideration is the medical A determine whether PRO is authorized to an reasonable and neces- to insured was treatment to assist sary.1 designed of an determining deny insurer whether to the claim professional. an assessment of a medical upon insured based accept conflicting does not and review medical PRO as proffered by part evidence insured or agency, simply an administrative a PRO process. Unlike statutory authority to an insurer and has no expertise lends its disputes. resolve in the Only participates process. the insurer Pennsylvania contention that This fact alone rebuts National’s judicial a PRO should be entitled deference afforded The detachment re- agencies. neutrality administrative of a fact-finder is in the contrac- quired conspicuously absent relationship tual between a PRO and an insurer.
A
body.
PRO is not a neutral
While a PRO cannot be
owned
or be otherwise affiliated with the insurance
(31
68.3(d)),
Pa.Code
the law
company
provides
company
insurance
to select
will review the
company initially pays
claim. The insurance
the PRO
no role in
plays
its services. The insured
the selection
Obviously,
strong
PROs have a
financial incentive
process.
eyes
fair in the
of the insurance
Other-
appear
company.
wise,
company
the insurance
will take its business else-
hand,
where. On the other
the PRO is not concerned with
how the insured views the PRO because this will
affect
Consequently,
its future business.
the PRO does not have
*8
independent body
the characteristics of an
for which the
judicial
would seek
deference.
Legislature
Company,
Harcourt v. General Accident
Insurance
419
Lehman v.
71,
(1992),
615 A.2d
78
Pa.Super.
citing
78,
(1992),
Companies,
State Farm Insurance
140 P.L.J.
82
(1993).
648,
allocatur denied 534 Pa.
69
statutory remedy
a
Legislature provides
Where the
exclusive, the
rule is that a
mandatory
general
that is
No
issue is
power
jurisdictional
to act.
is without
court
however,
statutory remedy
permissive
a
is
where
presented,
467
Pennsylvania,
v. Commonwealth
or alternative. Lilian
(1976);
Compa
15,
Buckeye
v.
Coal
We the rationale explained 5, 791, Pennsylvania, 477 Pa. 383 A.2d Feingold v. Bell of (1977) stated, Legislature has seen in which “When the we regulatory scheme and to establish pervasive fit to enact a regulato expertise broad governmental agency possessing scheme, a powers statutory and remedial to administer that ry to interfere in those matters and court should be reluctant intended to be consid disputes by Legislature which were ered, agency.” at administrative initially, least rule is absolute exhaustion of administrative remedies jurisdiction where because the court exercise even an remedy inadequate remedy administrative exists when the mere does incomplete. remedy or “The existence of a Id., of its 477 Pa. at dispose question adequacy.” at A.2d 794.
In an common Feingold, brought action was equity seeking injunctive monetary damages against court relief and Company arising provide Bell from its failure to Telephone operable telephonic recording service. The issue was whether appellant should have first exhausted his administrative Law, Utility under the Public 66 P.S. 1101 et seq., remedies seeking judicial remedy. statutory We held that the (PUC) authority granted Utility to the Public Commission did damages private litigant to to a power not include the award public utility. for breach of contract We concluded that to have such a Legislature did not intend PUC stating: power, powers vested
It is clear that the remedial and enforcement were Utility designed in the PUC the Public Law but not regulations allow the PUC to enforce its orders and litigate empower damages PUC award *9 70 complainant. on behalf of a damages action for
private
is not
of administrative remedies
requiring
rule
exhaustion
recovery;
up
procedural
intended to set
obstacle
only where the available administra-
applied
rule should be
respect
alleged
with
to the
adequate
tive remedies are
injury
requested.
sustained and
relief
(footnotes
9-10,
A.2d at 795-96
and citation
Section MVFRL a reconsideration the PRO may request or insured must initial determination.” We determine of the PRO’S mandatory statutory is a and exclusive provision whether this may bring an insured remedy pursued that must be of medical against nonpayment civil action an insurer articulated in principles are guided benefits. We in the context of a statuto- compelling which are also Feingold, ry remedy. 1797(b) to serve as a empower does not
Section an insured and insurer. disputes forum to resolve between in a PRO to entertain Legislature authority did not vest of medical benefits. litigation arising nonpayment out of remedy statutory provision provide Nor does the nonpayment of medical benefits. provides specific, “a only Legislature
It is where exclusive, disposition method for the constitutionally adequate dispute” statutory remedy kind of particular of a adjudicate the before the courts must be exhausted Borough Alleghe School District v. dispute. West Homestead Directors, Pa. 269 School 440 ny County Board of (1970). remedy “A cannot be extend statutory A.2d Lashe v. Northern scope.” matters not within its ed cover District, 541, 548, 417 A.2d 52 Pa.Cmwlth. County York School a controver- apply does “If the statute *10 remedy, much less an obviously not intended to be sy, it is Id. remedy.” exclusive which through mechanism is a
The
of the reason
assessment
seek a
may
professional
an insurer
in
to
order
inde
medical treatment
necessity
ableness
de
paid
a claim should
determine whether
pendently
informed decision
making
in
an
nied.
It assists insurers
a medical
mandating
by
regarding
a medical claim
by the insurer.
challenged
the claim is
professional when
1797(b)
alterna
not an
provision,
is a cost containment
Section
the
This accounts for
lack
procedure.
resolution
dispute
tive
process.
in the
The
the
or provider
of involvement of
insured
of the
to
reconsideration
Legislature
impose
did
intend
judicial
resolution
as a
precondition
determination
dispute.
a private
contractual
in
case,
part
relied
Superior
In
instant
Court
the Insurance Commission
upon regulation promulgated by
1797(b)
judicial
allow for
interpreted
er which
Section
has been
by PRO
made.
only
after a reconsideration
68.2(c), pro
codified at
Pa.Code
regulation, formerly
Act 6
interprets
Department
Insurance
vided that “[t]he
PRO,
insurer,
an
by the
permit upon final determination
in
Al
the decision
court.”2
may appeal
or insured
an
of a statute
administrative
though
interpretation
an
may be
great weight,
interpretation
agency is entitled
or incon
clearly
if
is
erroneous
interpretation
disregarded
regulation
promul
which the
the statute under
sistent with
Scanlon,
228,
NIX,
files a
in
Dissenting Opinion
which
MONTEMURO,
Justice,
joins.
Senior
reading
regulation
It is unclear from a
3.
itself whether the
specifically
Insurance Commissioner
intended to construe Section
1797(b)
precluding judicial
as
review unless reconsideration was
sought.
possible
regulation
promulgated
response
It is
1797(b)
challenges
brought
to earlier
to Section
before the Common-
raising
entirely prohib-
wealth Court in
the issue of
whether
statute
*11
challenge
findings
ited the
of a PRO’s
in court when the reasonableness
necessity
challenged
of the medical services has been
before a PRO.
Foster,
465,
Pennsylvania Chiropractic
In
Federation v.
136 Pa.Cmwlth.
(1990),
process
I and would dissent Court. opinion Superior Justice, dissenting joins in this
MONTEMURO, Senior opinion.
645 A.2d Respondent, Pennsylvania, COMMONWEALTH v. RHODES, Petitioner.
Earl Pennsylvania. Supreme Court Aug. 1994.