Maryland Auto Accident News: Health Insurance Not Obliged to Cover Crash Victims’ Medical Costs

A recent Court of Appeals ruling has determined that Maryland health insurance carriers do not necessarily have to cover the medical costs incurred by victims of car and truck accidents. As part of a class-action suit concluded on October 20, Maryland’s top court’s decision is based on a state law that requires automobile insurance companies to carry PIP (or personal injury protection) coverage for driver’s.

As a Maryland auto accident attorney, I understand the typically expensive medical costs associated with car and truck accidents. This is why I and my colleagues always recommend to anyone involved in an injury accident to contact a qualified accident lawyer to review his or her situation. This latest court ruling makes it more difficult for victims of traffic collisions to recover their medical costs following a hospital stay.

The Court of Appeals’ 6-1 decision is a setback for a class of injured motorists who claimed that MAMSI Life & Health Insurance Co. had an obligation to make good on policies requiring it to pay medical expenses, including those resulting from automobile accidents. Had MAMSI paid for beneficiaries’ medical costs, they could have used the insurance money under personal injury protection, or PIP, to cover other expenses, such as lost wages.

The class-action lawsuit began on Sept. 24, 2004, when lead plaintiff Kuei-I Wu sued MAMSI in Baltimore County Circuit Court for breach of contract and related claims, due to injuries incurred following a car accident three years earlier when she was a University of Maryland student.

On April 5, 2007, the circuit court certified as a class all owners of MAMSI health plans since Sept. 23, 2001, who had a car accident and whose PIP coverage was partially or fully exhausted before their treating physicians sought reimbursement from MAMSI, which subsequently had the case moved to U.S. District Court in Baltimore.

Wu claims she sought medical treatment under her MAMSI health policy, which contained a provision that called for coverage regardless of any other insurance she had, including PIP. Wu alleges the insurance company, in violation of the contract provision, required her treating physicians to seek reimbursement through the PIP first before turning to MAMSI.

But since the statutory issue has now been resolved in the company’s favor, the case will go back to the U.S. District Court in Baltimore for the narrower claim that MAMSI breached a provision in the policy contract requiring it to provide health coverage to injured motorists, regardless of the statute. The plaintiffs allege that, contrary to the policy contract, MAMSI’s separate contract with physicians required them to exhaust their driver’s auto insurance coverage before billing the company.

Writing for the high court, Judge Clayton Greene Jr. said Maryland health insurance law holds that PIP insurance is primary but permits other health insurance to be secondary. The General Assembly, which first required PIP coverage in 1972, sought to ensure that injured motorists have access to health care, regardless of fault or whether they have other insurance.

“In our view, the statute mandates that a motor vehicle insurance policy containing PIP benefits is the primary source of coverage for a person injured in an automobile accident,” Greene wrote. “[T]he legislature established that PIP is the primary source of recovery where an expense is incurred, regardless of fault, arising out of a motor vehicle accident.”
Court of Appeals: PIP trumps health insurance,, October 20, 2009

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