IT'S NOT THE INSURED'S UNPAID PIP CLAIM. IT'S YOURS, PROVIDER.

In Spine Care Delaware, LLC v. State Farm Mut. Auto. Ins. Co., No. 17-1816, 2018 WL 810112 (D. Del. February 9, 2018), the United States District Court for Delaware applied Delaware law, naturally enough, to a provider's unpaid Personal Injury Protection benefits (PIP) claim.  Delaware law is just like every other jurisdiction's PIP law in requiring PIP benefits of the kind that this provider conferred upon the policyholder.  So, also naturally enough, the unpaid PIP provider sued the PIP carrier to get paid for conferring the PIP benefits covered by the PIP coverage at issue.

The thing is, the PIP provider in effect sued in the name of the policyholder, akin to asserting a bad faith claim against the carrier as an assignee of the policyholder.  The provider's reasoning apparently went something like this:  PIP benefits are required in an insurance policy by statute; we, the provider, provided the PIP benefits to the policyholder; therefore, we, the provider, are entitled to be paid for providing the PIP benefits.  So far, so good, except ....

A provider's claim for unpaid PIP benefits belongs to the provider, not to the policyholder.  So, the provider's claim in this case was temporarily dismissed.   Undoubtedly the newly enlightened provider will amend its complaint or refile to assert its own injury so that the unpaid PIP claim can proceed.

The District Court in Delaware put the matter concisely at the beginning of its very well-reasoned opinion:

    A medical provider challenging an insurer's handling of a patient’s medical claims must plead why it can recover an insured's claim. It is not the insured whose insurance claim is delayed or denied. We cannot simply assume the medical provider suffered injury caused by the insurer's conduct. As the medical provider presently fails to plead an identified injury through the insurer's treatment of at least one identified insured's claim, we grant the insurer's motion to dismiss without prejudice for the medical provider to amend its claim.

Spine Care Delaware, LLC v. State Farm Mut. Auto. Ins. Co., No. 17-1816, 2018 WL 810112, at *1 (D. Del. February 9, 2018).

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