JUNE 2009 BAD FAITH CASE MVFRL PREEMPTS BAD FAITH STATUTE ON FIRST PARTY MEDICAL BENEFITS CLAIM (Middle District)
In Wright v. Ohio Casualty Group Insurance Company, the court agreed “that § 1797 does not provide the exclusive source of remedy where a plaintiff’s claim falls outside the scope of the PRO process outlined therein.” In fact: “Numerous state and federal district courts in this Circuit have followed this reasoning and held that a statutory bad faith claim under § 8371 is not preempted by § 1797 where plaintiff’s claim of bad faith rests on allegations that the insurer misused the PRO process, for example to obtain a determination of causation rather than medical necessity or reasonableness.” The pivotal issue is “’whether Plaintiff’s allegations fall within the purview of § 1797, thus invoking the remedies established therein….’”
In this case, the result fell on the side of MVFRL preemption: “[The insured] simply raises a claim for the payment of first party benefits for his alleged reasonable and necessary medical expenses and appeals to this Court for a determination that Defendant is obligated to pay such expenses. He raises no more than a claim for a judicial determination of the reasonableness and necessity of his disputed expenses. This is precisely the type of claim the § 1797 remedial scheme addresses.”
