A recent Legal Intelligencer story, “Justices Rule Peer Review Precludes Attorney Fee Award,” reports that the Pennsylvania Supreme Court has ruled that an insurer cannot be ordered to pay a medical provider’s attorney fees when the insurer properly employed the peer review process before denying coverage because it deemed the medical care unnecessary.  In Herd Chiropractic Clinic v. State Farm Mutual Automobile Insurance, the justices ruled 4-2 to reverse a Superior Court decision that unanimously affirmed a Dauphin County trial court’s ruling awarding $24,047 in attorney fees to plaintiff Herd Chiropractic and against State Farm.

Justice Thomas G. Saylor, writing for the majority, said Section 1797(b)(4) of the Motor Vehicle Financial Responsibility Law (MVFRL) only allows providers to appeal insurers’ coverage refusals, “the reasonableness or necessity of which the insurer has not challenged a [peer review organization].”  Section 1797(b)(6), meanwhile, only allows for courts to award attorney fee “pursuant to paragraph (b)(4),” Saylor said.  “There is, as insurer emphasizes, simply no express statutory authorization for fee shifting on provider challenges to peer-review determinations,” Saylor said.

State Farm submitted the bills to a peer review organization pursuant to Section 1797 of the MVFRL.  State Farm ultimately refused to pay for certain treatments Herd Chiropractic provided and the medical provider sued the insurer, seeking unpaid medical expenses, attorney fees and damages, according to court documents.  The trial court determined that the medical care was reasonable, granting $1,380 in unpaid medical expenses, but denied treble damages and attorney fees.  Herd Chiropractic filed a motion for reconsideration, which the trial court granted, and was awarded attorney fees of $24,047.