Court Agrees Massachusetts Auto Insurance Bars Duplicate Medical Payments

An auto insurer in Massachusetts can withhold medical payments (MedPay) benefits to insureds whose medical expenses have been paid by their primary health insurer.

The Massachusetts Appeals Court has upheld Commerce Insurance Co.’s denial of MedPay benefits in accordance with language added to the state’s standard auto policy in 2016.

The Commerce auto policy held by the Noelle Bousquet, who was seriously injured in a crash, included personal injury protection (PIP) coverage for up to $2,000 of medical expenses for any injured person. Bousquet also purchased optional MedPay benefits of up to $25,000. Automobile insurers must offer the option of buying MedPay benefits of at least $5,000.

Commerce paid Bousquet $2,000 under her PIP coverage but denied recovery under MedPay for her additional medical expenses that were paid by her health plan, Fallon Community Health Plan. When Bousquet sued the driver who caused the crash, Fallon asserted a lien for $13,429.62 in that action and when Bousquet received a settlement in that suit, she satisfied Fallon’s lien from her settlement proceeds. She sought reimbursement from Commerce under her MedPay benefit.

Bousquet contested Commerce’s denial of her MedPay benefits, arguing that the 2016 policy language undermined the legislative intent of MedPay, was confiscatory and was beyond the regulator’s authority to insert in the policy. She noted that prior to the language change in 2016, policies allowed duplicate payments and did not restrict MedPay benefits if health insurance covered them.

Lower courts sided with Commerce and Bousquet appealed.

The Appeals Court in an opinion written by Justice Eric Neyman has now agreed with the lower courts and found that the language limiting the MedPay benefits was within the commissioner’s authority and does not conflict with the law establishing MedPay.

“We see no conflict between the 2016 policy language and the statutory language where Massachusetts law allows for reasonable limitations on MedPay benefits,” Justice Neyman wrote. The plain language of the statute requires automobile insurers to offer MedPay benefits but does not prohibit the commissioner from defining or limiting the scope of that coverage. The court rejected Bousquet claim that this silence was proof that the Legislature intended to permit duplicate payments. Rather, the Appeals Court found, “in the absence of any indication that the Legislature intended to require duplicative recoveries, the decision concerning the policy language was within the commissioner’s discretion as a policy matter.”

The MedPay section of the policy required that medical expenses had to be submitted to the health plan to determine what the health plan would pay before Commerce would determine whether to pay benefits in excess of $2,000. “No payments will be made under this Part that duplicate payments made for the same bodily injuries under any other auto insurance policy or under a health insurance policy covering the injured person,” the provision stated.

This language differs from the standard Massachusetts automobile insurance policy that existed prior to 2016, which, at the time, allowed duplicative payments for the same bodily injuries covered under a health insurance plan.

When it added the new language in 2016, the Massachusetts Division of Insurance also issued a regulation stating that MedPay benefits “shall always be secondary to and in excess of any health benefit plan or PIP benefits.”

Bousquet had also argued that an earlier state Supreme Judicial Court ruling reasoned that, under the pre-2016 policy, an insured was entitled to recover both MedPay benefits and health insurance. That ruling was in a case where the insurer did not have a non-duplication or set-off provision in its policy and thus the court found that a double recovery was permissible.

The Supreme Judicial Court, however, further explained that its decision did not leave the insurer without a remedy. Rather, “it is always open to automobile insurers to petition the Division of Insurance . . . to change the language of the policy so as to clarify that it does not require the result of which they complain.”

According to the Appeals Court, the 2016 policy revisions reflect that clarification. Where the commissioner approved policy language explicitly creating the non-duplication provision contemplated by that state high court ruling, the Appeals Court said it could not conclude that the language is in conflict with the law.

Topics Auto Massachusetts