External Review of Medical Claims by P/C Insurers Could Raise Premiums

Requiring property/casualty insurers to have medical treatment claims reviewed by third party examiners is unnecessary, counterproductive and could raise the cost of insurance for Iowa consumers, according to the NAII.

“Medical claims paid by property/casualty insurers and health insurance claims paid by health insurers are apples and oranges,” said Ann Weber, National Association of Independent Insurers (NAII) counsel. “To try to fit property and casualty insurance into the same external review process that health insurers undergo, as the Insurance Division is considering, will be virtually impossible.” Weber sent a letter to Assistant Insurance Commissioner Roseanne Mead requesting the requirement not be extended to property/casualty insurers.

Unlike health insurance claims, payment of medical claims under property/casualty insurance must consider such issues as liability and general damages, as well as comparative fault if the case involves an uninsured motorist.

Except for workers’ compensation, property/casualty insurers are not able to control or direct medical treatment, Weber said.

“Medical claim controversies within the property/casualty industry have traditionally been resolved through the judicial process,” Weber said. “The judicial process by its nature is set up to deal appropriately with questions of causation, pre-existing condition, reasonableness in necessity of treatment, and permanency. Mandating that property/casualty medical claims be initially covered by external review may have a long-term negative impact on consumer cost in the state of Iowa.”

Extending the external review process to property/casualty insurers, she said, could lead to the possibility that claimants may exploit the process by gaining a favorable treatment determination in that forum and then using that decision against the insurer in subsequent litigation involving causation and/or damage issues.

“The court system in Iowa has worked very well as a means of addressing medical claims and is designed to resolve the connected questions of causation, reasonableness, pre-existing conditions and permanency.”

Topics Carriers Claims Property Iowa Property Casualty Casualty Medical Professional Liability