Health Care Providers Can File Suit to Collect Interest on Late Auto Insurance Claims Payments
The Pennsylvania Supreme Court recently ruled that health care providers, including physicians, can file suit to collect interest on late claims payments by auto insurers, ruling in favor of a position advanced by the Pennsylvania Medical Society in an amicus (friend of the court) brief.
In Schappell v. Motorist Mutual Insurance Company, a chiropractor had filed several class action lawsuits against Motorist Mutual Insurance Company, State Farm Mutual Automobile Insurance Company, and GEICO Corporation after they allegedly failed to pay interest on late claims payments, violating the Motor Vehicle Financial Responsibility Law (MVFRL).
The defendants filed a motion that health care providers cannot file suit seeking interest on late payments. The trial court dismissed this motion, saying that the MVFRL allows private action seeking interest on late payments. The court also said interest on unpaid bills becomes part of the bill itself, which health care providers clearly can pursue.
The cases were consolidated on appeal to the Superior Court, which reversed the trial court's dismissal of the motion. However, the Supreme Court reversed this decision, agreeing with the trial court that the MVFRL provides a private right of action for interest on late payments. The case will now proceed in the trial court.
Last Updated: 8/1/2008