In Massachusetts, Personal Injury Protection (PIP) benefits are available to persons injured in a motor vehicle accident. The compulsory no-fault insurance covers all reasonable expenses incurred within two years of the date of the accident for necessary medical, surgical, x-ray and dental services and for seventy-five percent (75%) of lost wages, up to the applicable limits. By statute, PIP benefits are due and payable as loss accrues, upon receipt of reasonable proof of the fact and amount of expenses and loss incurred. Because PIP benefits are, in part, intended to cover immediate medical expenses, including prescription costs, and to provide continuing income following an accident, the statute further provides that where benefits due and payable remain unpaid for more than thirty days, an unpaid party has a right to commence an action in contract for payment, and if the unpaid party recovers a judgment for the amount due and payable by the insurer, the court must assess costs and attorney’s fees against the insurer in addition to the amount owed.
Medical Bills and Balance Billing
The extent of PIP benefits available to cover a loss was the focus of a couple of recent Massachusetts cases. In the first case, a motor vehicle insurer paid a hospital PIP benefits totaling 90% of a bill for medical treatment to an injured motorist and the hospital sued the insurer for the remaining 10%. The parties agreed that the charges were reasonable and necessary. The motor vehicle insurer argued that the hospital had a contract with an independent provider of disability management and cost containment services under which it agreed to accept as full payment a percentage of its bills paid by the manager’s network of insurance company payors, including the insurer, and that no exclusion for PIP payments was contained in the contract. The Appellate Division of the District Court agreed that the contract precluded the hospital from seeking the remaining 10% of the bill. The court ruled that the contract was valid and that there was nothing unfair about the hospital agreeing with the cost management provider to accept a discounted portion of the billed services in full satisfaction of the same.
In another case, a self-employed insured sought PIP benefits to compensate him for five days of lost income resulting from injuries he sustained in a motor vehicle accident, and argued that the benefits should be calculated according to the gross income of the business. The insurer contended that the calculation should be based on the net profit reported on his taxes. Relying on the PIP statute which provides that “PIP benefits are to include payment for ‘persons employed or self-employed at the time of an accident of any amounts actually lost by reason of an inability to work and earn wages,’” the Massachusetts U.S. District Court agreed with the insurer finding that “the net profit of the plaintiff earned as a self-employed insured is equivalent to the gross wage of a regular employee.”
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