Byron v. Hartunian, M.D., P.C. v. Pilgrim Insurance Co.

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14-P-8 Appeals Court
BYRON V. HARTUNIAN, M.D., P.C. vs. PILGRIM INSURANCE COMPANY.
No. 14-P-8.
Middlesex. September 9, 2014. - November 24, 2014.
Present: Kantrowitz, Grainger, & Hanlon, JJ.
Insurance, Motor vehicle personal injury protection benefits,
Settlement of claim, Unfair act or practice. Consumer
Protection Act, Insurance, Unfair or deceptive act. Motor
Vehicle, Insurance.
Civil action commenced in the Cambridge Division of the
District Court Department on November 7, 2008.
The case was heard by Severlin B. Singleton, III, J.
Joseph R. Ciollo for the defendant.
Francis A. Gaimari for the plaintiff.
GRAINGER J. A $990 dispute, reduced shortly before a bench
trial in the District Court to a claim for $188.10, has resulted
in an award totaling $25,343.53 against Pilgrim Insurance
Company (Pilgrim).1 Pilgrim now appeals from the decision and
1
The $188.10, representing interest on the period during
which Hartunian claimed Pilgrim engaged in bad faith delay in
2
order of the Appellate Division of the District Court affirming
the District Court judgment in favor of Byron Hartunian, M.D.,
P.C. (Hartunian), on his claim that Pilgrim unfairly delayed
payment for orthopedic treatment rendered by Hartunian to the
claimant under Pilgrim's policy. We affirm.
This case arises out of an April 4, 2007, automobile
accident in which a passenger was injured, resulting in her need
for medical treatment. The automobile in which she was a
passenger was covered by a standard Massachusetts automobile
insurance policy (auto policy) issued by Pilgrim. A personal
injury protection (PIP) benefits application was received by
Pilgrim approximately ninety days after the accident. Some
ninety additional days thereafter Pilgrim received treatment
records and bills from Hartunian for five different dates of
treatment.2 Pilgrim initially paid $515 to Hartunian,
constituting payment for the first two treatment dates of May 15
and June 20, 2007. Thereafter, Pilgrim paid Hartunian an
additional $495 for the remaining three treatment dates of July
19, August 14, and October 2, 2007. Although these two payments
payment of a claim, was trebled by the trial judge. To this was
added prejudgment interest, attorney's fees and costs in the
District Court, and appellate attorney's fees after Pilgrim's
unsuccessful appeal to the Appellate Division of the District
Court.
2
Before the plaintiff's bills were received, an independent
medical exam (IME) was performed by a physical therapist.
3
were intentionally $990 less than the total of Hartunian's
billings, Pilgrim did not notify Hartunian or his patient of its
intention not to pay the $990 within ten days of the submission
of the bills. Pilgrim based its nonpayment on its determination
that the charges exceeded an amount that was reasonable in
comparison to other medical providers in the same geographic
area.
After approximately twelve months of demanding payment to
no avail, Hartunian commenced suit in the District Court on
November 7, 2008, seeking the unpaid $990 portion of his
billings, as well as damages and costs pursuant to G. L. c. 93A
and G. L. c. 176D. Faced with suit, Pilgrim then issued a
payment of $990 to Hartunian's counsel and filed a motion for
summary judgment on all counts of the complaint. The motion was
allowed on those counts relating to breach of contract and
declaratory judgment and denied with respect to the remaining
counts. After a bench trial, Pilgrim was found liable to
Hartunian for violation of G. L. c. 93A and G. L. c. 176D.
Pilgrim filed a timely notice of appeal to the Appellate
Division, which affirmed the judgment.
Discussion. We are unpersuaded by Pilgrim's assertion that
its refusal to make payment cannot be considered an unfair
business practice as a matter of law because it disputed the
obligation in good faith. This argument ignores the trial
4
judge's findings, supported by the record, detailing the breach
of Pilgrim's obligation under G. L. c. 90, § 34M, fourth par.,
to make payment of PIP benefits within ten days or,
alternatively, to notify the submitting physician or the
claimant of its intention not to pay. Pilgrim also failed to
have the patient examined by a practitioner licensed in the same
medical specialty as Hartunian, an orthopedist, during an
independent medical examination (IME). Instead, a physical
therapist examined the insured, and Pilgrim denied Hartunian
payment on the basis of that examination, among other reasons.
Pilgrim asserts that its use of an IME performed on its
behalf by a physical therapist precludes the judge's finding of
bad faith as a matter of law. Relying on the Supreme Judicial
Court's decision in Boone v. Commerce Ins. Co., 451 Mass. 192(2008) (Boone), it points to the fact that both physical
therapists and orthopedists are licensed under G. L. c. 112,
arguing that, therefore, reliance on a physical therapist's
opinion regarding the need for continuing treatment by an
orthopedist has been legislatively defined as good faith
reliance. In Boone, the Supreme Judicial Court held that under
G. L. c. 90, § 34M, third par., an insurer can refuse to pay a
medical bill based on an IME conducted by a physician who need
not necessarily be licensed under the same section of G. L.
c. 112 as the physician submitting the bill. Boone, supra at
5
196. By contrast, when the insurance company's refusal to pay
is based "solely" on "a medical review of the bill or of the
medical services underlying the bill," the review must be
conducted by a practitioner licensed under the same section of
G. L. c. 112. See G. L. c. 90, § 34M, fourth par., as inserted
by St. 1989, c. 271.
While an IME performed by any physician selected by the
insurer may be sufficient to satisfy the requirements of § 34M,
third par., we reject Pilgrim's assertion that Boone, or any
other authority, stands for the proposition that compliance with
§ 34M automatically insulates an insurer from a claim of unfair
settlement practices under c. 93A. The ability of the reviewing
practitioner to assess the need for further treatment is a
function of training, experience, and, in many cases, specific
area of medical expertise. Indeed, Boone recognized that not
all practitioners licensed under § 112 could appropriately
render a medical opinion in all other specialties licensed under
§ 112; rather, the court acknowledged that licensees "cannot
lawfully practice outside the scope of their professional
registration." Boone, supra at 198.3 Reliance on a different
specialty raises a factual question of the insurer's good faith
3
As an example, Boone states that "[O]rthopedic surgeons
and chiropractors cannot . . . render medical decisions about
dentistry." Boone, supra at 198.
6
especially where, as here, the reviewer's area of practice
requires less training and education than that of the submitting
physician, rather than the reverse.4
The only witness at trial, a PIP claims representative from
Pilgrim who was not the individual who handled the Hartunian
claim, testified that Pilgrim's determination that Hartunian's
billings were unreasonable was also based on a review of those
billings by a computer program. Neither the specific results of
that review nor any evidence about the program was introduced in
evidence. In any event, use of a computer program does not
excuse failure to comply with the clear requirements of G. L.
c. 90, § 34M, fourth par.; on the contrary, its use as a
substitute for a practitioner's review of billing statements and
underlying services provides an additional basis for an
inference of Pilgrim's lack of good faith under c. 93A.5
Accordingly the judge found, with support in the record,
that Pilgrim forced Hartunian to file suit, and that the delay
in payment did not comply with the requirements of § 34M and was
4
We note that in Boone, the insurance company relied on an
IME conducted by an orthopedic surgeon to refuse payment to a
chiropractor.
5
By contrast, in the case of Barron Chiropractic &
Rehabilitation, P.C. v. Norfolk & Dedham Group, 469 Mass. 800,
801-802 (2014), the insurer appropriately had the IME performed
by a licensed chiropractor where the chiropractic services were
questioned.
7
neither reasonable nor in good faith.6 There was no error in
tripling the award of lost interest resulting from the delay, or
in the award of attorney's fees.
Hartunian may submit a petition for appellate attorney's
fees to this court in the manner prescribed in Fabre v. Walton,
441 Mass. 9, 10-11 (2004), within twenty days of the issuance of
this opinion. Pilgrim may respond to the petition within twenty
days of said filing.
Decision and order of the
Appellate Division
affirmed.
6
As the careful review of the Appellate Division panel
notes, the judge considered Pilgrim's behavior in the context of
G. L. c. 93A, § 11, noting that Pilgrim's actions mirrored those
prohibited by G. L. c. 176D. The judge did not rule, contrary
to Pilgrim's assertion, that a violation of G. L. c. 176D was
per se a violation of c. 93A, § 11.