In this matter, the Plaintiff pursued a bad faith claim based upon two (2) different theories. Under the first theory, the Plaintiff alleged a bad faith denial of the Plaintiff’s claim for UIM benefits. Secondly, the Plaintiff asserted a theory of bad faith based upon the carrier’s denial of the Plaintiff’s claim for first party motorist benefits.
In this matter, the court had previously granted the UIM carrier’s request for a judgment on the pleadings with respect to the Plaintiff’s UIM motorist benefits claim. With this latest decision, the court accepted the argument of the carrier that, given that the underlying underinsured motorist benefits claim had been dismissed, the Plaintiff’s claim for bad faith based upon the denial of the UIM benefits should likewise be dismissed.
The UIM carrier also moved to dismiss the Plaintiff’s claims for bad faith for nonpayment of first party medical benefits pursuant to the case of Herd Chiropractic Clinic C.P. v. State Farm Mut. Auto. Ins. Co.
The court noted that, in Herd, the Pennsylvania Supreme Court held that an insurer could not be held liable for bad faith in the context of a breach of contract action stemming from a denial of an insured’s first party medical benefits claim where a peer review had been performed and the peer review determined that the treatment was not medically necessary or reasonable.
Judge Williamson noted that, in the case before him, UIM carrier had conducted a peer review which found that certain previous and future pain management treatment was reasonable and necessary. The Plaintiff asserted, in part, in this matter, that the first party benefits carrier had acted in bad faith by routinely denying payment of bills, including a bill from the pain management provider that should have been paid according to the peer review.
Judge Williamson denied the UIM carrier’s Motion for Partial Summary Judgment as to the bad faith claim regarding the first party benefits given that discovery on the issues presented was not completed and given that there were still facts in dispute under the discovery completed to date.
More specifically, Judge Williamson noted that the Herd decision was applicable to a peer review performed for a particular provider. In the matter before Judge Williamson, there were issues with respect to medical benefits payment relative to several different providers and that there was no evidence of any peer review having been completed with respect to certain other providers. Accordingly, there were disputes about bills paid or not paid or paid after significant delay which bills had not been subjected to a peer review. Judge Williamson felt that further discovery might clarify these issues.
Moreover, Judge Williamson found, in part, that the Herd decision was not applicable to the case before him because the peer review had found that certain medical bills and treatment relative to the Plaintiff’s treatment with the pain management specialist were reasonable and necessary.
The court also found factual disputes given that there is deposition testimony from the claims adjuster acknowledging that she had denied payment for a bill from that pain management provider in error when those bills had been approved by the peer review.
Judge Williamson also rejected the defense argument that, since these first party benefits carrier had ultimately paid the disputed bills, summary judgment was not warranted. The court rejected this argument because the Plaintiff had alleged that the delay in payment cased harm. Judge Williamson felt that this was a factual dispute that should be left to be decided by the jury.
Anyone wishing to review this Opinion by Judge Williamson may click this LINK.
Source: “Case Digest.” Pennsylvania Law Weekly (March 8, 2016).