Kentucky Senate Moves No-Fault Reform to Help Control Costs for Consumers

FRANKFORT, Kent. - The Kentucky Senate passed Personal Injury Protection (PIP) reform legislation, SB 121, Monday that will help lower auto insurance costs via a fee schedule, fight fraud, and provide consumers higher wage loss benefits, according to the Property Casualty Insurers Association of America (PCI). The Kentucky House will now consider the legislation.

“Senate Bill 121 would help consumers by leveling the playing field between what auto insurers and other payors are charged for most medical procedures by utilizing the well-functioning, proven medical fee schedule, such as the workers compensation fee schedule,” said Jeffrey Junkas, assistant vice president, state government relations for PCI. “Except for exempted hospital care, this change would ensure the amounts charged for the same procedure are not drastically different just because the insured is getting the procedure due to an auto-related injury.” 

Currently, there often is a vast difference between what auto insurers pay for the same medical procedure. As an example, under PIP a CT scan costs more than $1,250 on average, while the same test costs only $340 under workers compensation – a 267 percent differential.

“Using a fair, proven fee schedule will help reduce fraud from overtreatment and overcharging,” said Junkas. “We hope the Kentucky House takes up the measure and ideally closes the blatant hospital charging loophole. We commend the bill’s sponsor, Sen. Rick Girdler, R-Somerset, and the Senate leadership for addressing auto insurance fraud, abuse and other cost issues.”

Senate Bill 121 also protects Kentuckians by prohibiting “balance billing” – the unfair practice of a medical provider aggressively pursuing a consumer for payment of amounts above the fee schedule/agreed-to amounts paid to satisfy the bill. Also, the bill raises the wage loss benefits from $200 to $400 per week.