Individuals had personal injury protection (PIP) policies from the plaintiff insurance company, and when they were injured, they received medical care from the defendant healthcare provider. To pay for their medical care, the individuals assigned their PIP benefits to the healthcare provider. The healthcare provider submitted claims for reimbursement under the PIP policies to the insurer.
Suspecting the healthcare provider of fraud, the insurer asked the healthcare provider for information regarding its ownership structure, billing practices, and regulatory compliance. The healthcare provider refused to provide this information. The insurer sought a declaratory judgment that the healthcare provider as the assignee of the PIP benefits was required to provide the information. The insurer argued that the terms of the PIP policies required the insureds to cooperate with the investigation of any claim under the policy and the defendant’s failure to supply the information violated the state’s PIP discovery statute. As relief, the insurer requested that either the healthcare provider provide the information or they would be ineligible to receive PIP reimbursement. The trial court granted declaratory judgment in favor of the insurer. The appellate court reversed.
The Supreme Court of New Jersey reversed the trial court and affirmed the appellate court’s decision, though for different reasons, holding that a healthcare provider who has received an assignment of PIP benefits from an insured is not obligated to furnish to the insurer broad information with respect to the provider's ownership structure, billing practices, and regulatory compliance.
With regard to the insurer’s claim that the healthcare provider violated the terms of the PIP policies, the court reasoned that because an assignee can have no greater rights than the assignor, an assignee can have no greater duties than the assignor. Under the PIP policy the insured had no duty to provide the insurer information about how the healthcare provider conducted business. Therefore, the assignee of the PIP policy, the healthcare provider, had no duty to provide the insurer information about the healthcare provider’s business practices.
With regard to the insurer’s claim that the healthcare provider violated the PIP discovery statute, the court held that the statute was limited to information regarding a patient's history, condition, treatment, and dates and cost of such treatment. The information the insurer requested on the providers' ownership structure, billing practices, and referral methods exceeded the statutory requirements.
See: Selective Ins. Co. of America v. Hudson East Pain Management Osteopathic Medicine, 2012 WL 2913768 (N.J., July 18, 2012) (not designated for publication).