• Pennsylvania Client Advisory - Superior Court Holding
  • July 7, 2014
  • Law Firm: Thomas Thomas Hafer LLP - Harrisburg Office
  • Superior Court holds that challenging health care provider is entitled to statutory attorney’s fees if an insurer submits first party medical benefit bills to a Peer Review Organization (PRO) that does not appropriately complete the requested peer review pursuant to the statutory and codified procedures and requirements.

    In Doctor’s Choice v. Travelers Pers. Ins. Co., 2014 Pa. Super. 92, --- A.3d ---- (Pa. Super. 2014), Doctor’s Choice submitted medical bills to its patient’s automobile insurer, Travelers, for chiropractic services. Travelers submitted the medical bills to IMX Medical Management Services (IMX), a PRO. IMX selected Dr. Mark Cavallo, a chiropractor, to conduct the review. Dr. Cavallo produced a report, discussing his review of the insured’s medical records, and, importantly, self-selected medical literature, and ultimately concluded that a portion of the treatments were unnecessary. Based on Dr. Cavallo’s conclusion, Traveler’s declined to cover the treatments deemed unnecessary.

    Doctor’s Choice brought suit claiming that Dr. Cavallo did not comport with the regulatory requirements for a valid peer review and, therefore, no peer review was conducted. The Trial Court found in favor of Plaintiff and specifically determined that Dr. Cavallo’s report was invalid as a peer review. However, the Trial Court did not award attorney’s fees, and Doctor’s Choice appealed. The Superior Court determined, under 75 Pa.C.S. §1797(b)(4), that for the purpose of limiting an insurer’s liability for attorney’s fees, the insurer must rely exclusively on statutorily compliant, valid, and successfully completed peer review.

    The effect of the Superior Court’s holding is that an insurer’s mere referral of disputed first party medical benefit bills to a PRO is alone insufficient to protect it from potential liability for attorney’s fees if the PRO fails to comply with the statutory prerequisites. Importantly, the decision notes that “insurers are presumed to possess a full understanding of the nature of a valid peer review and its attendant procedures and requirements.”

    Notably, as Travelers did not challenge the validity of the peer review on appeal, the Superior Court was not presented with an opportunity to perform its own analysis as to whether the peer review at issue was valid or invalid and was required to base its opinion upon the trial court’s determination. It is anticipated that counsel for future Plaintiffs will attempt to expand the Superior Court’s holding into the proposition that a peer review conducted with the reviewers self-selected literature and without a PRO’s written criteria based on typical patterns of practice in a geographical area is per se invalid. However, the Superior Court was not presented with the issue and, therefore, the question has not yet been ruled upon by a court of appellate jurisdiction.