The following article was taken from the Thursday, August 30, 1990 edition of The Legal Intelligencer, published by Legal Communications, Ltd., Philadelphia, PA.

Ex-PaTLA President Challenging Insurance Law

By SUSAN M. WILSHUSEN

Portions of Pennsylvania's new auto insurance law intended to contain health-care costs are being challenged in a class-action suit filed by a well-known Philadelphia-area lawyer.

Leonard A. Sloane, past president of the Pennsylvania Trial Lawyers Association, said the original intent of the law was to provide "some relief in the areas of lawsuits, anti-fraud, rate and medical costs."

Long-Term Costs

But Sloane is challenging sections of the law intended to prevent the escalation of medical costs for accidents that have already occurred but which resulted in the need for long-term treatment.
The section limits accident-related medical costs to 110 percent of Medicare fees for comparable services during the time the services were provided.

Sloane filed a class-action suit July 3 in the Delaware County Court of Common Pleas on behalf of accident victims and insured motorists who are finding that they will receive reduced medical benefits on policies purchased before the law took effect July 1. The suit alleges that it is unconstitutional to reduce insurance companies' medical payments to doctors treating accident victims, claiming reduced fees should apply only to policies purchased or renewed after July 1, not to policies effective before then.

Sloane's suit was filed on behalf of Delaware County accident victim Clifford Phillips, whose full medical bills were paid by Keystone Insurance Co. between his accident on March 24 and April 15, the effective date of the cost-containment portion of the new law.

But the suit said that only $1,088 of a $3,030 bill was paid by Keystone the following month.
Sloane asserted that Keystone violated the terms of Phillips' insurance policy by reducing medical payments, while Keystone argued that it was simply following the law and applying it correctly.
Sloane said a policy statement issued by Insurance Commissioner Constance Foster suggested to insurance companies that the health care cost-containment provision could be interpreted in a way that would give insurers the immediate cost savings.

Sloane, who handles personal-injury litigation in private practice with the firm Caine DiPasqua Sloane Raffaele & Nigro in Media, fought the auto insurance legislation as it progressed through the state Legislature.

"I don't think the Legislature intended to have health care cost containment apply to a doctor-patient relationship which already existed before the effective date of the act." Sloane said a result of the law is "interference with the patient-physician relationship."

Sloane plans to file motions for summary judgment shortly.

Two other suits intended to change the law are pending. The Pennsylvania Medical Society suit is attempting to declare the law unconstitutional, while the insurance industry is attempting to have rate roll-backs and freezes overturned.