Understanding Personal Injury Insurance Law For Today’s Health Care Provider: The Ins and Outs of PIP Coverage

By Richard H. Adler, Attorney at Law

Background. “Pip” is an abbreviation for personal injury protection insurance. It is just one part of an auto insurance policy that today’s health care provider needs to be aware of when treating patients with injuries.

The personal injury protection part of a policy is actually a contract between the insured (your patient) and the insurer (the insurance company). Activation of pip benefits for your patient does not depend upon who was at fault in the accident, only that your patient was involved in an auto accident and was in a car that had automobile insurance. The Washington Legislature passed a law mandating that all motorists in the state of Washington must be offered auto insurance, including pip coverage. The only way not to have pip coverage is for the insured to reject the coverage in writing. Typically, it has been our experience that well over 90 percent of all individuals involved in accidents who have auto insurance coverage have pip coverage.

Three Components of pip Coverage. All pip policies of all insurers in the state of Washington have to satisfy mandatory minimum requirements of coverage set by law and regulation. Interestingly, there is not much difference between policies issued by State Farm, Farmers, Allstate, Pemco, Amica, Mutual of Enumclaw, Liberty Mutual, etc., when it comes to providing the pip safeguards required by Washington law.

All pip policies in Washington have three components: medical benefits, wage loss benefits, and loss of services.

Medical: Pip covers, at a minimum, medical expenses of any licensed health care provider (ambulance, hospital emergency room, diagnostic tests, CT or MRI scans, medical, osteopathic and chiropractic visits, orthotic devices, medications, physical therapy, massage therapy, etc.) for three years from the date of the accident or up to $10,000, whichever comes first. The health care provider is required to demonstrate through their chart notes and documentation that the treatment provided is “reasonable, necessary, and related” to the motor vehicle accident.

The $10,000 in medical coverage applies to each person in the car. For example, if there are two people in the same car and both are your patients, then each person has a $10,000 benefit. They do not share the $10,000 in medical coverage.

Though the mandatory minimum pip is $10,000 and is the one you’re most likely to encounter, there are many policies (for a very slightly higher premium) that provide benefits up to $35,000.

Wage Loss: Your patient’s pip coverage contains benefits for wage loss reimbursement. Again, similar to the medical provision, the wage loss provision has to meet mandatory minimum requirements in Washington law. Wage loss is calculated at 85 percent of the actual income loss, up to a maximum of $200 per week. However, there is an exclusion in all policies for the first 14 days from the date of the accident. If your patient earns $100 per week and is disabled from work for the first four weeks following the accident, the insurer would not have to pay the first two weeks but would have to pay the last two weeks. For the last two weeks, the insurer would pay 85 percent of $100, or a total of $85 per week. In a second example, if your patient earned $1,000 per week and was disabled for the first four weeks after the accident, the insurer would be excluded from paying benefits for the first two weeks, but would pay for weeks three and four. The insurer would pay 85 percent of the $1,000 up to $200 per week. In order for a patient to obtain the pip wage loss benefit, it is required that they produce written verification from their doctor regarding their work restriction(s).

Loss of Services: The third provision contained in the pip policy is not often appreciated or activated by the health care provider or patient. The loss of services benefit allows for reimbursement of expenses that are necessary for household help. Again, mandatory minimum requirements in Washington law state that all pip policies contain the loss of services section at $40 per day, not to exceed $200 per week. Similar to the wage loss benefit, the insurance contract requires that the treating doctor authorize the patient to hire household help as part of the rehabilitation plan. For example, if someone presents with an acute low back injury, the provider may want to restrict that person from household activities such as vacuuming since that may cause an exacerbation of the condition.
Practical Considerations.

  1. Every health care provider’s office should make sure that their intake questionnaire includes questions about the vehicle the patient was in, the automobile insurer of that car, the insurance policy number, and the pip adjuster’s name, address, and phone number.
  2. Contrary to many health providers’ practices, it is not necessary to get permission or “the blessings” of the pip adjuster to provide treatment, order a diagnostic test, or refer for a second opinion. It is covered. Pip coverage is not an HMO benefit. Automobile insurance and HMO policies are very, very different types of insurance contracts and policies. From the provider and patient’s point of view, pip is superior to any health care plan for many reasons:

    a. Pip insurance allows more discretion for the health care provider.
    b. Pip involves no copayment from the insured.
    c. Pip involves no deductible for the insured.
    d. Pip requires no preapproval by the insurer.
    e. There are specific Washington Administrative Code regulations requiring the pip insurance carrier to pay the provider’s bill within a “reasonable period” amount of time following performance of health care services.
    f. The pip insurer is responsible for 100 percent of the bill. There is no preferred provider discount.

Although a patient has pip insurance coverage, in some cases the patient may try to direct that the doctor’s office not contact his or her automobile insurance company. Sometimes the provider’s office will get an objection from the patient indicating that since the accident was not his or her fault, the insurance company should not be involved (because of unspoken fear that insurance rates may go up or coverage will be canceled). This concern can be handled effectively by knowing two pieces of additional information:

  1. The law in Washington is very clear that no policy of insurance can be canceled, nonrenewed, denied, or have the rate increased unless the policyholder (your patient) was determined to be at fault in the accident. RCW 46.52.130 provides in relevant part:
    Any insurance company or its agent receiving the certified abstract shall use it exclusively for its own underwriting purposes and shall not divulge any of the information contained in it to a third party. No policy of insurance may be canceled, nonrenewed, denied or have the rate increased on the basis of such information unless the policyholder was determined to be at fault. . . .
  2. If the patient does not want to have the bill sent to the pip carrier and would prefer to have the bill sent to his or her health insurance; e.g., Regence or Blue Cross, you need to point out to the patient that there is a specific exclusion in all health insurance policies in Washington that states, “if the patient is involved in a motor vehicle accident and there is pip coverage, pip coverage is the primary coverage and the secondary health insurance will not have to pay until the pip is exhausted or terminated.”