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How HB 837 changes PIP and Personal Injury
Here is the FINAL update about HB 837 and what was officially signed into law on 3/24/23! Please share this with lawyers and doctors!
Most important – I am still doing PIP suits! Feel free to reach out to me or my team about how we can find you extra money in your PIP files.
This new law does not affect any PIP policies purchased on or before 3/24/23 – There are still attorney fees- which means doctors will be paid what they are owed. Section 29 of HB 837 is very clear. So if someone purchased a six month policy on 3/24/23 and got in an accident four months later then doctors will get paid from PIP with no problem because attorney fees are the hammer to keep the insurance companies honest.
For PIP policies purchased after 3/24/23, there will be no attorney fees unless (a) an insurer makes “a total coverage denial of the claim” and (b) the lawsuit is filed in the name of the patient (ie not in the name of the doctor’s office).
What happens if a PIP claim has a "total coverage denial of the claim"?
The injury lawyer will either file the PIP suit on behalf of their client or they will refer the case to a PIP attorney and ask for a 25% referral fee. Remember, this claim should be filed in the name of patient because there are attorney fees under this scenario. If the case is successful then the $10,000 check will go to the attorney’s office and the injury lawyer will try to split it between all the different doctors. Some lawyers may keep 33-40% of the $10,000 if the injury case doesn’t settle for a lot of money.
Do insurance companies still need to pay 200% of Medicare fee schedule?
Yes. Nothing has changed with the fee schedule. There was a part in the law that would basically allow insurance companies to reimburse 100% Medicare rates for LOPs but that did not make it into the final version of the law.
What do you think insurance companies will do to take advantage of this new law?
First off, not every company is going to take full advantage of the law. Some will abuse it. Others will stay the status quo.
IME Cut-offs/Peer Reviews: I think you can expect a lot more IME cut-offs. They have to pay the 200% Medicare rate for services that are reasonable, related, and necessary. If they start cutting-off chiropractic care at the 30 day mark and there are no attorney fees to “hammer” them to do the right thing and pay…they will cut-off a lot of patients. You can fight this by having an MD/DO examine the patient and writing “I refer the patient for further chiropractic care, estim, hot/cold packs, manual therapy, etc.”
Denials by CPT Code: I think you can expect a lot of companies to start denying multiple CPT codes per visit for a variety of reasons including some vague Medicare guideline and claims of over-utilization.
Also, if an insurance company doesn’t like your clinic, your doctor, the patient, or thinks the accident is suspicious – good luck getting paid on time. The carrier can tie the claim up as “under investigation” for a really long time. The PIP law says an insurance company has 90 days to pay or deny a claim they have a reasonable belief is fraudulent. In theory, they would need to have some evidence like a statement from a patient at an EUO or some pattern of claims. But without attorney fees to keep them honest, the carrier can deny a claim longer without any punishment. Currently, I collect $424 on average per PIP file I receive from a doctor. So if a doctor give me 10 files I will collect about $4,240 for them; if it is 100 files then I will collect about $42,400 for them. Under the new law, I expect doctors to be owed more money. There is still the demand letter so hopefully the insurance companies will pay what they owe in the demand letter.
What is Abe going to do?
My office is still operating as normal for all claims where the PIP policy was purchased on or before 3/24/23. You keep 100% of the money you are owed; my office keeps the interest and penalty if the carrier pays in response to my demand. If my office has to file a lawsuit then you keep 100% of the money you are owed; my office keeps the attorney fees.
For claims where the PIP policy is purchased after 3/24/23, my office will charge a percentage of money we collect in response to a demand letter– For demands we send, it is 25% of the money we collect plus interest and penalty. For lawsuits we file, it is 25% of the money we collect if there are no attorney fees.
My friend says there is a Proposal for Settlement Law that says the carrier will pay attorney fees if you win the lawsuit. What do you think about that?
The Proposal for Settlement law only awards attorney fees after you make a written offer 90 days after serving the lawsuit, obtain a judgment (which could include a trial), and you must get awarded at least 25% more money than the written offer you made. If you don’t obtain a judgment then this rule doesn’t apply and there are no attorney fees. Also, the insurance company could just accept the settlement offer you made which could leave the lawyer with a paltry recovery.
I’ve done this work before on cases involving diminution of value (the decreased value in a car after being in an accident) and it doesn’t pay off.
Let’s say a doctor is owed $1,000 maximum from the PIP coverage. On day 91 of filing a lawsuit, the PIP lawyer would have to file a PFS around $500 because they need to get a judgment for 25% more (ie $625)…and the max they are owed is $1,000. Remember, the goal is to get attorney fees by making an offer, hoping the carrier doesn’t accept it, and getting a judgment for at least 25% more than the offer.
The insurance company could accept the PFS offer every time which means the PIP lawyer would keep a percentage of whatever they collected. Is the risk of a PFS getting accepted worth it to the lawyer? I don’t think so.
No lawyer can afford to take every case to judgment – and that’s the only way to get attorney fees under a PFS.
Are LOP's affected?
Not really. The original version of HB 837 would have only allowed a jury to hear what Medicare would pay. It did not allow the jury to hear what the doctor billed. The final version that was signed into law tells the jury both (a) the doctor’s full bill and (b) what 120% of Medicare will pay/170% of Medicaid if not covered by Medicare. Also, if the patient has health insurance, a jury will hear what their insurance company would pay…even if they don’t use health insurance. Originally, the jury would only hear the Medicare/Medicaid rate…not the amount billed by the doctor!
This law doesn’t specify if a jury will hear that chiropractors only get paid for an adjustment by Medicare! Imagine treating a slip/fall patient, billing $10,000, waiting two years to be paid, and being told you can only be paid 1.2x the Medicare rate for adjustments (no exam, X-rays, therapy).
Is bad faith affected?
Not really. The original version of HB 837 would have allowed an insurance company 90 days after a lawsuit to cure any bad faith violation by tendering the policy limits. The final version that was signed into law starts the 90 day clock from “receiving actual notice of a claim which is accompanied by sufficient evidence to support the amount of the claim”. This is something our clients/patients can live with.
What about he-said/she-said cases where liability is 50/50?
Under the old law, if someone was 99% at-fault for an accident, they could still pursue a case against the other person who was 1% at-fault. Under the new law, if a jury decides someone is 51% at-fault for “his or her own harm” they may not recover any money for their injuries. Motorcyclists not wearing helmets, people who didn’t wear a seatbelt, pedestrians crossing a street outside a crosswalk, two cars merging into each other with side-to-side damage – will likely not be able to pursue a claim.
Did the Statute of Limitations change?
All negligence (MVA’s/Slip Falls) must be settled or a lawsuit filed within TWO years. It has always been four years.
All PIP suits still have FIVE years to be settled or filed. This remains unchanged.
Are EMC's affected?
No. You still need an EMC to obtain more than $2,500 from PIP. Make sure that you don’t work with MRI centers that give you an EMC as part of the MRI report. Insurance companies are suing some of these MRI centers for a “kick back” (ie send me your MRIs and I will give you an extra $7,500 in coverage). Point is, if a carrier doesn’t like your EMC or thinks it is invalid, they won’t pay more than $2,500. Also, use multiple EMC provider so they can’t say you have a “deal” with one EMC provider. Insurers are saying “hey, you use one EMC provider and 100% of the patients you refer to the EMC provider get a positive finding of an EMC. It can be portrayed that you are sending all your patients to that EMC provider because you have a “deal” with them. Just use multiple EMC providers and stay away from MRI centers that kick in an EMC for sending MRIs.
What you can do next:
My office is still handling PIP suits even under the new law. Contact us to get started on your PIP suits now.
What Should I Do, Abe?
Start preparing for lower reimbursements on average. Reduce your overhead, save money, and send me all your PIP suits.