Washington Case Law Update: Washington Court of Appeals Sets the Stage for a Change in PIP Billing Practices


Attorney Katie Buxman

Washington Case Law Update: Washington Court of Appeals Sets the Stage for a Change in PIP Billing Practices 

From the Desk of Katie D. Buxman: Some insurers use automated software to adjust their PIP payments to match the standard rate for specific procedures in specified geographic areas. Some states, such as Oregon, have prohibited this practice. Is Washington the next state to follow that trend? Read on to find out.

Claims Pointer: In this class action lawsuit, a chiropractic clinic brought a Consumer Protection Act claim against an insurer for its use of software to determine the reasonableness of PIP payments. After the lawsuit was dismissed by the trial court, the court of appeals reversed and reinstated the lawsuit. It concluded that the chiropractic clinic properly alleged a violation of Washington’s CPA because the insurer failed to individually examine claims to determine whether they were reasonable and necessary. This case may be the first step Washington courts take towards eliminating an insurer’s ability to use software such as Fair Health to determine the reasonableness of PIP payments to providers.  

Folweiler Chiropractic PS (“Folweiler”) is a chiropractic clinic based out of King County, Washington. In 2016, Folweiler filed a class action lawsuit against American Family Insurance Company (“American Family”) alleging violations of Washington’s Consumer Protection Act. Folweiler alleged that, from 2012 to 2016, it treated numerous patients with PIP coverage provided by American Family and was directed to bill American Family directly. However, Folweiler alleged, rather than accepting and paying each bill, American Family processed the bills through a payment database maintained by Fair Health which compared Folweiler’s bills to the same procedures in the same zip code and reduced such bills to the 80th percentile of payments in the database. Folweiler argued that American Family’s use of the software violated its duty to...

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