Chiropractor on Trial, PIP Abuse, and Other Thoughts

The Kentucky Law Review reported on a Courier Journal article discussing the beginning of the criminal fraud trial of Dr. Paul Hollern, described by the article as someone "who once headed a chiropractor-training empire from Louisville." The trial is taking place in U.S. District Court for the Western District, styled United States of America v Paul Hollern, Case No. 3:06CR-82-S.

While not specifically mentioned, the issue of "health care fraud" got me thinking about PIP and the potential for abuse. The lack of standard contractual arrangements or laws to limit PIP payments, renders the insurance an absolute goldmine compared to other forms of insurance. PIP pays 100% of a billed procedure, while typical insurance pays a reduced rate based on the provider contract or law. This creates an incentive to bill as many procedures to PIP. It also encourages the so called race to the PIP payout.

I recently saw where the pharmacy of a national megachain "advertised" that it could fill automobile accident prescriptions without the need for a co-pay. This implied that the prescription would be submitted under PIP, allowing the pharmacy 100% recovery on medication. I have also seen medical records where it appears providers have engaged in extensive workups and expensive diagnostic testing on questionable clinical symptoms that do not appear to warrant those types of evasive procedures. While some will argue the need for and type of care is best left to the professionals, the nature and evasiveness of the treatment, from what has previously been seen, would indicate this is a recent phenomenon related to maximizing PIP recovery before other providers.

Of course, it could be argued that the insurance company could always deny the claim. However, the requirement that the treatment be reasonable and necessary is often too broad and vague to overcome. This tactic also pits the carrier against its own insured, who is usually an innocent party to billing practices. In the end, the insured is the one who suffers when the PIP is exhausted unreasonably. (Notice I didn't say on unreasonable procedures. While the procedure itself may be appropriate, the lack of a therapeutic effect isn't). Why is the burden placed on the insured, and not the doctor, if payment is denied?

The question that comes to my mind is has PIP become some kind of health care welfare? Does it by its very nature encourage excessive and expensive treatment? I am not trying to imply that there is anything illegal about billing PIP for medical care related to automobile accidents, especially care a provider can show is reasonable and necessary. I am simply wondering whether the the current procedure best serves the injured party or gives them the full amount of coverage for which they paid. The potential for abuse is certainly obvious. I also wonder whether the insured would forgo paying a small co-pay for medications or other care, if in the long run they knew it meant they would receive more value for their coverage. If not, is some type of fee schedule appropriate? Is greater control over the amount of payments, either by the insurance company or the insured, the better practice?