1. (a) An insurer shall apply the Medicare payment limitations of Act 6 to provider services covered by bodily injury liability, uninsured and underinsured motorists, first-party medical and extraordinary medical benefits coverages under an automobile insurance policy.
2. (b) In an action for damages against a tortfeasor arising out of the maintenance or use of a motor vehicle 75 Pa.C.S. § 1720 (relating to subrogation) applies.
3. (c) If an insured’s first-party limits have been exhausted, the insurer shall, within 30 days of the receipt of the provider’s bill, provide notice to the provider and the insured that the first-party limits have been exhausted.
4. (d) Upon receipt of a provider’s bill, the insurer shall make a determination of the appropriate Medicare payment and pay up to the first-party benefit limits of the policy. If the determined amount exceeds the benefit limits of the policy, or the determined amount plus previously paid benefits exceed the benefit limits of the policy, the provider may directly bill the insured or a secondary insurance carrier.

5. (e) If only a portion of the provider’s services are paid by the automobile insurance policy, because benefit limits have been exhausted, the provider may bill the insured for the remaining services not paid under the automobile insurance policy. The provider’s bill to the insured shall be limited to the remaining services not paid under the automobile insurance policy.

   Example: Assume an insured has $5,000 of first-party benefits from the insured’s automobile insurance policy and no health insurance. Further assume the provider’s bill totals $10,000 and the Medicare payment for the $10,000 total bill would be $6,000. The actual worth of the $5,000 of first-party benefits applied at the appropriate Medicare payment is $8,333 worth of services of the $10,000 bill ($5,000 is to $6,000 as x is to $10,000; x is $8,333). The provider may bill the insured $1,677, or $10,000 less $8,333, for the remaining services not paid under the automobile insurance policy.

6. (f) If another insurance policy exists and a provider bills that insurer for the actual worth of remaining services not paid (such as $1,667 in the Example in subsection (e)) that insurer shall determine the appropriate amount of payment to the provider under the terms of the insured’s health or other insurance policy, without regard to the medical cost containment provisions of the act.
7. (g) When multiple providers seek reimbursement and when their bills for services collectively exceed the policy limits, providers shall be paid by the insurer in the order the insurer receives a provider’s bill. If bills are received simultaneously, the bill with the lowest payment amount in accordance with § 69.43 (relating to insurer payment requirements) shall be paid first.
8. (h) If no portion of the provider’s bill is payable under automobile insurance coverage, the Medicare payment limitations no longer apply. A provider may directly bill the insured or other insurance carrier as it has prior to passage of Act 6.

Notes of Decisions

Cost Containment

This regulation does not prohibit the application of the cost containment provisions to a medical bill remaining after an injured party’s first party benefits have dissipated and where the party is seeking recovery from a third party tortfeasor’s liability insurance. Pittsburgh Neurosurgery Associates, Inc. v. Danner, 733 A.2d 1279 (Pa. Super. 1999); appeal denied 751 A.2d 192 (Pa. 2000).

Due Process

This section is rationally related to the statutory purpose of regulating and reducing the cost of automobile insurance and does not violate the substantive due process rights of physicians. Pennsylvania Medical Society v. Foster, 624 A.2d 274 (Pa. Cmwlth. 1993).

Regulations, which permit medical providers to bill insured parties directly for services not paid by their insurer for reason that the insured’s policy limits have been exhausted, cure any alleged unconstitutional vagueness in statute. Because either the insurer, a provider or the insured may appeal a private, nongovernmental peer review organization’s (PRO) determination to court, the process by which permissible charges by a provider are limited does not violate due process. Pennsylvania Medical Providers Association v. Foster, 613 A.2d. 51 (Pa. Cmwlth. 1992).