Oregon SC: PIP benefits do not include insured’s transportation costs

By Jessica Karmasek | Feb 28, 2017

SALEM, Ore. (Legal Newsline) - A majority of the Oregon Supreme Court this month upheld the decisions of a trial court and an appeals court, declaring that personal injury protection benefits, under state law, do not include an insured’s transportation costs to receive medical care.

The state’s high court, hearing the case en banc, ruled 4-3 that plaintiff Stephanie M. Dowell was not entitled to reimbursement for the transportation costs she incurred to obtain medical care, as part of her PIP medical benefits.

PIP is an extension of car insurance that covers medical expenses and, in many cases, lost wages.

In Oregon, auto insurers must provide PIP benefits to their insureds for certain automotive injury-related expenses, regardless of who is at fault in an accident.

However, a trial court concluded that state PIP statutes do not require insurers -- in this case, defendant Oregon Mutual Insurance Company -- to pay for such costs and granted summary judgment for Oregon Mutual. Dowell appealed, and a state appeals court affirmed.

The state Supreme Court, in its Feb. 16 opinion, affirmed both courts’ rulings. Justice Lynn Nakamoto authored the majority opinion. Justice Martha Lee Walters dissented and filed a separate opinion, in which justices Richard C. Baldwin and David B. Brewer joined.

The PIP medical benefits at issue in this case consist of “all reasonable and necessary expenses of medical, hospital, dental, surgical, ambulance and prosthetic services incurred within one year after the date of the person’s injury, but not more than $15,000 in the aggregate for all such expenses of the person.”

“We are not persuaded by plaintiff’s argument that a failure to read ORS 742.524(1)(a) to include an insured’s transportation expenses incurred for traveling to and from medical providers would frustrate the legislative policy of ensuring prompt reimbursements for an injured person’s expenses and thereby reducing litigation between drivers,” Nakamoto wrote for the majority.

“We reject plaintiff’s suggestion that the purpose of PIP benefits is to ‘provide for broader, not more restrictive, coverage.’ That proposition may be supported by Colorado law, which plaintiff cites as authority, but there is nothing in the legislative history of ORS 742.524(1)(a) that suggests that the legislature’s purpose in enacting the PIP benefits statute was to fully compensate injured motorists on a no-fault basis.”

In 2008, Dowell was injured in a motor vehicle accident. Among other expenses, she incurred $430.67 in transportation costs to attend medical appointments and to obtain medication. She then applied for PIP medical benefits under her insurance policy.

Oregon Mutual paid for her medical care, but declined to pay for her transportation expenses to obtain medical care.

Dowell filed a complaint for breach of contract, both for herself and on behalf of others similarly situated.

Oregon Mutual responded by moving for summary judgment, arguing that ORS 742.524(1)(a) did not require it to pay for transportation costs.

Dowell argues health care is not available without traveling to a doctor or hospital, and those travel costs are especially burdensome to rural residents who may have to travel a significant distance.

She also argues, in her appeal to the Supreme Court, that the appeals court’s decision will encourage insurance companies to deny injured persons payment for medication, medical supplies and medical equipment.

The high court, in its ruling, noted that while the legislative history is “not as detailed as it could be,” the evidence available indicates that the lawmakers considering the statute “understood the rationale for the legislation included reducing litigation while maintaining reasonable insurance premiums.”

“Both legislators and the insurance industry voiced concerns about the effect of PIP benefits on increases in premiums for auto insurance,” the majority wrote. “And, specifically as to the medical PIP benefits, the discussion in legislative committee hearings in 1971, concerning ‘medical bills,’ ‘medical payments’ and ‘medical expenses,’ focused on medical care.

“The descriptions of what the PIP medical benefit was intended to cover were not limited to healthcare providers’ services; instead, they more broadly described the medical benefit.”

The court continued, “Thus, the legislative history is consistent with our reading of the phrase ‘expenses of medical *** services’ in ORS 742.524(1)(a) as including (1) the cost of professional services provided by licensed or certified healthcare providers and (2) medications and medical supplies and equipment that they have prescribed for the injured motorists that they treat.

“Accordingly, we agree with the trial court and the Court of Appeals that the legislature did not intend transportation costs for medical care to be a benefit under the PIP statutes.”

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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