The purpose of this bulletin is to remind insurers of their responsibilities when performing medical reviews to evaluate, adjust, and reimburse medical expenses or settle bodily injury claims, including personal injury protection claims. The bulletin is also intended to remind insurers of their responsibilities when using the services of a medical review organization to process these claims.
The Texas Department of Insurance (Department) expects all property and casualty insurers to conduct medical reviews in good faith and use fair claim settlement practices when performing medical reviews or using the services of a medical review organization to process bodily injury claims. For example, an insurer should not direct or encourage any person who processes personal injury protection claims, including a medical review organization, to reach a particular conclusion in an evaluation. The Insurance Code does not prohibit property and casualty insurers from using medical review organizations for the purpose of furnishing technical assistance to the insurers' licensed adjusters in the processing of such claims. Any insurer that uses a medical review organization or any similar organization to process claims should ensure that the organization is properly reviewing medical information. Further, any person who adjusts, or leads others to believe that he or she adjusts claims, must hold an adjuster's license.
Insurance Code §1952.151 requires that automobile liability insurance issued in Texas providing personal injury protection must provide for the payment of "all reasonable expenses" arising from accidents. Other statutory and policy provisions relating to liability insurance govern additional coverages, including uninsured motorists/underinsured motorists, medical payments, and third-party bodily injury. Further, Insurance Code §§541.060 and 542.003 and Texas Administrative Code, Title 28, §21.203 require all insurers to attempt in good faith to effectuate "fair and equitable" settlements of claims and not engage in unfair settlement practices.
The Department will not support attempts by medical providers to charge amounts over and above what is usual and customary in their communities or geographic areas, but the Department will vigorously enforce the rights of insureds to receive the benefits to which they are contractually entitled.
The Department will investigate allegations of unfair claims settlement practices, both in the context of individual cases and in the context of general business practices, and will take appropriate enforcement action when evidence of unfair claim settlement practices is demonstrated .
Questions regarding this bulletin may be directed to David Nardecchia, Director, Personal & Commercial Lines Division, at 512-305-7544 or firstname.lastname@example.org.
Commissioner of Insurance