On November 1, 2018, the Kentucky Supreme Court issued its much-anticipated decision in 2016-SC-000546-DG. The Supreme Court affirmed the Court of Appeals’ Opinion finding a paper review of medical records could not be used to unilaterally deny payment of no-fault benefits to claimants in automobile accidents. The Supreme Court further limited the reasons for denial of no-fault benefits to those circumstances specifically outlined in the Kentucky Motor Vehicle Reparations Act. For example, denial is permitted when a person intentionally causes or attempts to cause injury to himself or another person (KRS 304.39-200), or is specifically identified as an excluded person under the KMVRA.
The Court explained that KRS 304.39-020(5)(a) provides “a presumption that any medical bill submitted is reasonable.” This legal presumption is enough to establish a starting point that the medical treatment is reasonably needed and the bill is reasonable for what has been provided. The Court further held that because the bills are presumed reasonable, the BRB insurer is prevented from unilaterally denying medical treatment or bills based on either a paper review of the medical record, or even a mental or physical examination.
In this case GEICO agreed the medical bills were the result of the accident and that it should pay part of them as reasonable. The Supreme Court noted medical bills that predated the accident, or an unrelated injury, would not meet the definition of loss subject to basic reparations benefits and could be denied.
Therefore, in Kentucky, a reparations obligor cannot deny benefits due solely to unreasonable treatment. However, the insurance company retains some remedies in the event it receives an invoice for medical treatment that misrepresents the need for the treatment, reasonable cost of the treatment, or any material fact it relies upon in paying the invoice. Specifically, KRS 304.39-210(4) provides that if the reparations obligor pays a benefit it was not required to pay due to misrepresentations of a material fact, it may bring an action to recover the improper benefits directly against the provider. It may also pursue the insured if the insured has intentionally misrepresented the facts, or knows of the misrepresentation.
Also, keep in mind paper reviews of medical records may still be used for establishing good cause for obtaining a court-ordered physical or mental examination of an injured party.
If you have any questions regarding how this decision affects your claim or investigation, feel free to contact Rolfes Henry’s team of experienced insurance defense attorneys.