On Behalf of | Feb 20, 2020 | Medical Malpractice

Recently, in Folweiler Chiropractic, PS v. American Family Ins. Co., 2018 WL 5729873 (Wash. App. 2018), the Washington Court of Appeals reinstated a class action lawsuit against American Family where the suit accused American Family of unfairly discounting medical payments based upon computerized databases which were used to determine the reasonable cost of medical services. It was alleged that American Family, based upon the computerized databases that were utilized, automatically disallowed medical bill charges that exceeded the 80th percentile amount for the relevant zip code. The suit alleged that this practice violated Washington’s Consumer Protection Act (CPA), RCW 19.8.020. The medical provider, Folweiler Chiropractic, filed the putative class action lawsuit, contending that the automatic deductions were a violation of Washington’s PIP statute, the Unfair Claims Settlement Practices Regulations, and the CPA. The case was initially dismissed, but the Court of Appeals reversed and reinstated the case.

In reinstating the lawsuit, the Court noted that Washington law required automobile insurers to offer minimum PIP coverage of $10,000. That amount was available to pay reasonable and necessary medical and hospital bills. Because the reasonableness of a necessity for any such medical expenses depended upon the circumstances, the Court of Appeals reasoned that any billing evaluation process which paid no more than 80% of average charges without taking into consideration each individual claim, would represent a violation of the public interests of the State of Washington embodied in the Washington PIP statutes.