Medical provider's claim for No Fault benefits is reinstated
Covenant Medical Center provided $43,000.00 worth of medical care to a motorist insured by State Farm. It notified State Farm and demanded payment. When State Farm delayed payment for the insured's injuries, the insured sued and ultimately resolved his claim with State Farm by State Farm's payment of $59,000.00. Covenant then sued State Farm over its bill, but State Farm argued that its settlement--and release--with the insured wiped out Covenant's bill. The trial judge agreed and Covenant appealed.
The judges noted that the case relied upon by State Farm involved a health care provider who provided services after a release was executed and where the insurer did not have written notice of a medical billing at the time when it paid the insured's PIP claim and secured a release. In this case, since State Farm had actual written notice of Covenant's independent billing, State Farm could not wipe out that billing by executing a release with the insured. The judges pointed out that the plain language of the No Fault Act discharged an insurer's obligation to make payment "unless the insurer has been notified in writing of the claim of some other person."