Washington Court Rules that Insurers Cannot Use “Maximum Medical Improvement” to Limit PIP Coverage

In an unanimous decision, the Washington Supreme Court held in Durant v. State Farm Mutual Automobile Insurance Company, No. 94771-6 (June 7, 2018), that Washington regulations require automobile policies containing personal injury protection (“PIP”) coverage to pay for all medical and hospital services related to an accident that are reasonable, necessary, and incurred within three years of the accident.  The issue came before the Court in the form of two certified questions submitted by the United State District Court for the Western Division in Washington which was adjudicating Durant’s claim that State Farm had wrongly refused to pay PIP benefits for chiropractic treatments arising out of his automobile accident based upon his achieving maximum medical improvement (“MMI”) where his doctor continued to prescribe the treatment as necessary.  The Court found that State Farm’s policy violated the plain language of Washington Administrative Code 284-30-395(1) by limiting coverage to those medical expenses that are essential in achieving MMI for the bodily injury sustained in the accident.

The Court answered the first certified question in the affirmative: “Does State Farm’s limitation of medical claims based on its MMI provision violate WAC 284-30-395(1)(a) or (b)?”  The Court held that the plain language of the WAC says that an “insurer may deny, limit, or terminate benefits if the insurer determines that the medical and hospital services: (a) Are not reasonable; (b) Are not necessary; (c) Are not related to the accident; or (d) Are not incurred within three years of the accident.”  As these are “the only grounds for denial, limitation, or termination of medical and hospital services permitted,” the Court determined that State Farm’s additional MMI requirement violated the statute.

The Court answered the second certified question in the negative: “Is the term ‘maximum medical improvement’ consistent with the definition of ‘reasonable’ or ‘necessary’ as those terms appear in WAC 284-30-395(1)?”  The Court found that the MMI limitation “denies Durant his PIP medical benefits necessary to return him to his pre-injury state.”  The Court held that the MMI provision was inconsistent with the terms reasonable and necessary because it would exclude palliative care from reasonable and necessary medical expenses which would not fully compensate the insured for actual damages from automobile accidents as required under PIP coverage.

Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.

Posted by Andrew Kamins