Foe of Insurance Law Takes Fight to New Front

The following article appeared in The Philadelphia Inquirer on Saturday, July 21, 1990.

By Jodi Enda (Inquirer Harrisburg Bureau)

As president of the Pennsylvania Trial Lawyers Association, Leonard A. Sloane vigorously fought auto insurance legislation as it worked its way through the Capitol this past year. The bill passed anyway.

As a private lawyer, Sloane now has moved his battle to a different arena – the Delaware County courthouse – where he has filed a class-action suit seeking to change the way part of the new law is being enforced.

The suit, filed July 3 in the Court of Common Pleas, contends that doctors’ fees for treatment of some accident victims are being slashed unconstitutionally.

It says that a new cap on medical expenses is being illegally applied to doctors’ bills for motorists whose insurance policies were in effect before the crux of the new law kicked in July 1.

While scores of suits have been filed against the new insurance law, this one is particularly noteworthy because Sloane lobbied against the law and because he is a well-known lawyer in the state, according to other lawyers involved with the insurance issue.

One such lawyer, who asked not to be identified, said trial lawyers “are using their best-known attorneys to argue the critical areas of the case.  They want to put their best foot forward. He’s a visible member of the trial bar.”

Sloane, who specializes in personal-injury cases, said yesterday that his suit was in no way tied to his role with the Trial Lawyers Association.  His stint as president ended July 7.

“This is me as a practicing attorney in Media who has been bombarded with these files,” he said. “These are all my personal clients. I just happen to be in a situation where I decided to take the bull by the horns.”

In the suit, filed in the name of accident victim {name omitted} of Sharon Hill, Sloane contended that Keystone Insurance Co. improperly cut payments to a Drexel Hill physician for treatment to {name omitted} after part of the new law took effect April 15.  That section of the law limits accident-related medical expenses to 110 percent of Medicare fees for comparable services “at the time the services were rendered.”

The State Insurance Department has told insurers to pay the new reduced fees for doctors who provided treatment to accident victims after April 15.  Sloane argues that the reduced fees should apply only for insurance policies renewed after the law took effect, and not to policies that were in place earlier this year.

“The situation is coming to my attention left and right and upside down and sideways,” Sloane said. “What’s happening is everyone who had previously been treated by doctors, who had an ongoing physician-patient relationship, whose bills were being paid for months to years, all of a sudden the insurance companies are sending letters to the doctors and to me that they are not going to pay the same amount that they were paying.

“I’m just concerned that doctors will stop treating.”

Sloane said that between March 24, when {name omitted} collision occurred, and April 15, Keystone paid {name omitted} doctor the entire amount of his bills.  In the following month, the suit says Keystone paid {Dr.’s name omitted} only $1,088 of his $3,030 bill.  By cutting his doctor’s payments, Keystone violated the terms of {name omitted} insurance policy, the suit maintains.

The suit also is being fought on behalf off all other accident victims whose insurance policies were in effect before the new law was, but whose physicians’ payments were reduced anyway.  Sloane said there was no way to know how many people that would include.

Keystone, for its part, contends that it was following the law in chopping payments to {name omitted} doctor.

“When the law stated that it goes into effect and you only pay X dollars, that’s when you do it,” said Birch Clothier, a Keystone vice president and corporate attorney.

Rep. Richard Hayden (D., Phila.), who shepherded the insurance bill through the House, said Keystone was applying the law correctly.  He said supporters of the legislation were trying to prevent the escalation of medical costs from accidents that occurred in the past but for which treatment could continue for years.

“It doesn’t surprise me that someone has challenged the retroactivity of the law,” Hayden said. “What’s a little bit out of the ordinary is that the trial lawyers, in conjunction with the insurance industry, were instrumental in trying to fashion the answer to auto insurance [rates] on medical costs.

“In fact, the 110 percent cap [relating to] Medicare came from in part at the suggestion of health care experts retained by the trial bar,” he said.  “I find it ironic that the same people who brought us that as a solution are now in some way trying to undo it as part of the answer.”

Sloane countered— “The trial lawyers didn’t propose this law. The trial lawyers responded to it.”