Thursday, June 26, 2008

No-Fault Intoxication Exclusion Cut Back by NYS Legislature

While everyone's focus was on the direct DJ/late notice/prejudice bill, the NYS Legislature passed a bill last week that prohibits no-fault insurers from excluding basic economic loss benefits for health care services for a person who is injured as a result of operating a motor vehicle while in an alcohol intoxicated or drug impaired condition.

Senate Bill # S8294-A passed the Senate on June 17 by a 61-0 vote, and passed the Assembly on June 19. It awaits the Governor's signature or veto, and if signed, will become law 180 days afterwards and will apply to all policies issued, renewed, modified or altered on or after the effective date.

The bill amends Insurance Law § 5103(b)(2) to read as follows:
§ 5103. Entitlement to first party benefits; additional financial security required.

(b) An insurer may exclude from coverage required by subsection (a) hereof a person who:

(2) Is injured as a result of operating a motor vehicle while in an intoxicated condition or while his ability to operate such vehicle is impaired by the use of a drug within the meaning of section eleven hundred ninety-two of the vehicle and traffic law, provided, however that an insurer may not exclude from the coverage required by subsection (a) of this section basic economic loss as defined in paragraph one of subsection (a) of section five thousand one hundred two of this article. Notwithstanding any other law, where the covered person is found to have violated section eleven hundred ninety-two of the vehicle and traffic law, the insurer has a cause of action for the amount of first party benefits paid or payable on behalf of such covered person against such covered person. (Added language underlined.)
For those of you who don't have it memorized, Insurance Law § 5102(a)(1) defines basic economic loss to include:
(1) All necessary expenses incurred for: (i) medical, hospital (including services rendered in compliance with article forty-one of the public health law, whether or not such services are rendered directly by a hospital), surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical therapy (provided that treatment is rendered pursuant to a referral) and occupational therapy and rehabilitation; (iii) any non-medical remedial care and treatment rendered in accordance with a religious method of healing recognized by the laws of this state; and (iv) any other professional health services; all without limitation as to time, provided that within one year after the date of the accident causing the injury it is ascertainable that further expenses may be incurred as a result of the injury.
If this bill is signed by the Governor, the intoxication exclusion will no longer apply to these kind of professional health care expenses. Ambulance and hospital bills will be payable even if the eligible injured person is legally intoxicated. Follow-up medical care will also be payable. Lost earnings (5102[a][2]) and other reasonable and necessary expenses (5102[a][3]), however, may still be excluded under the intoxication exclusion.

Note that the bill gives insurers the right to sue EIPs found guilty of violating Vehicle & Traffic Law § 1192 to recover the first-party benefits paid or payable on behalf of those EIPs. Those will be interesting actions. Collateral estoppel effect from the criminal conviction?

The sponsor's memorandum states that the purpose of this bill is:
To make certain that health care providers are compensated for their services regardless of the fact that the insured was injured as a result of operating a motor vehicle in an intoxicated condition and to allow insurers a right of recovery where the injured person is found guilty of operating a motor vehicle while in an intoxicated condition or while his ability to operate a motor vehicle is impaired by the use of drugs or alcohol.
The sponsor's memorandum gives the following as justification for this bill:

Section 2805-b of the Public Health Law and the federal Emergency Medical Treatment and Active Labor Act (EMTALA) require health care providers such as hospitals, emergency room physicians, nurses and surgeons to provide emergency medical services to persons in need of care, and screening, stabilization and treatment of persons seeking medical care at hospitals. At the same time, New York's No-fault auto insurance law allows insurers to deny reimbursement when insureds are injured while operating a motor vehicle in an intoxicated condition. It is grossly unfair to permit health care institutions and professionals to provide lifesaving care, and then provide no compensation. Health care providers offer the life-saving services that are needed when a person is in a motor vehicle accident. In addition, there is no evidence that current No-fault standards deter drunk driving; they simply penalize health care providers for the irresponsible and dangerous behavior of others. This bill would correct the gross inequity by providing for No-fault medical reimbursement for these dedicated professionals and institutions when they provide care pursuant to state and federal guidelines.

The current exclusion on No-fault benefits also represents a serious barrier that prevents individuals with substance abuse problems from getting the treatment they need. Health care providers who test accident victims for blood alcohol levels usually in emergency rooms - risk the loss of tens of thousands of dollars in insurance reimbursement. Without testing, individuals with substance abuse problems are not required to seek counseling or treatment. Instead, they continue their self-destructive behavior and may harm or kill others in the future. This bill will eliminate the financial disincentives health care providers face when considering whether to perform tests that could force individuals with substance abuse problems into confronting their illness. This bill will also eliminate the gross inequity of an insurance system that penalizes health care professionals and institutions for providing life saving care that is required by law.

Alas, the days of playing "hide the toxicology report" appear to be coming to an end. We must wait to see whether the Insurance Department will promulgate a new prescribed PIP endorsement with a revised intoxication exclusion. In any event, if the bill is signed, all New York auto policies issued, renewed, modified or altered 180 days or more later will be deemed to include the revised and limited intoxication exclusion.

Update (September 29, 2008) -- On September 25, 2008, Governor Paterson VETOED this bill. See my post regarding that veto here.

17 comments:

STM said...

I'll drink to that!

Hugh Fustercluck said...

Well it's about time. I hope that this is an indication that the Legislature may someday address another inequity in the law: the exclusion for intentionally caused injuries. Just because some poor despondent individual decides to jump in front of a car, or because some poor misguided gang member decides to use his car as a weapon to plow into his rivals, or because a destitute criminal uses his car to smash through the front window of a furrier, is not a good reason to deny no-fault benefits to innocent and well-deserving medical mills and storefront docs-in-a-box.

Instead of punishing these innocent clinics, the real culprits should be punished: insurance companies and their base of policyholders.

Hugh Fustercluck said...

Oh, I forgot to add: [raised fist sign] Right on, m-----f-----!

Anonymous said...

Perhaps the biggest no brainer in legislative history.

Two wrongs do not make a right.

Denying medical treatment to a person because they were drunk behind the wheel is reprehensible.

Jeff F.

Anonymous said...

@cluster

Lets see now... Comparing intoxation to homicide. Hmm. I can go in so many directions on this one. Let's try this for starters:

So what you are saying Culster, is that if your child was injured in a car wreck, was DUI, and his insurer denied him medical benefits, you would not help your child?

Jeff F.

Hugh Fustercluck said...

If it were up to me, drunk drivers would be left right where they were found. Drunk driving itself is reprehensible. So reprehensible, in fact, that they should forfeit medical treatment. Drunk drivers are killers, and restoring them back to health is like releasing a murderer from prison, to become a danger to society again. But the point is moot because nobody is ever going to deny medical care to a drunk driver. They just don't deserve it, is what I'm saying. Remember what Tony Soprano did to Christopher after Chris wrecked the car and almost killed them both, because he was doped up? That's what drunk drivers deserve.

Anonymous said...

"So reprehensible, in fact, that they should forfeit medical treatment."
@cluster:

It would be ironic if your patently self-serving bizarre system of ethics were to bite you in the ass someday.

In light of the astronomical profit margins of the NYS auto carriers-- which I would be happy to provide you data with respect to-- the issue is not what the drunk driver is "getting away" with when merely receiving medical treatment, but what the carrier is getting away with by unethically refusing coverage.

It's up to all of us-- on both sides of the field-- to fight back when business interests seek to strip us of our humanity.

Culster has lost his battle--with himself-- by attepting to use reactionary plays to subvert morality.

Roy A. Mura said...

Perspective.

The New York State Legislature in orignally enacting 5103(b)(2) told no-fault insurers it was okay to exclude BEL benefits for drunk drivers who injured themselves. NY no-fault insurers didn't make up that exclusion in an "unethical" effort to maximize their profits. Some insurers doing business in New York, in fact, have chosen NOT to include the intoxication exclusion in their PIP endorsements. The exclusion has always been among those that are optional. Presumably in response to a powerful hospital lobby, the Legislature has now, however, changed its mind, at least as respects health care benefits.

In other states, insurers afford only med pay benefits limited to $5,000 or so for drunk drivers who injure themselves. That's it. Is that morally irresponsible? I don't think so. Medicine isn't socialized (yet); neither is insurance (yet). Libertarians have for years rued mandatory financial responsibility laws. New York no-fault is such a law.

Last observation: is is immoral to deny coverage for health care costs to the hospitals/doctors, but not immoral to deny LOE and ONE to the EIP? Not a question of morality it seems to me. Not to the NYS Legislature either, it seems. It's a matter of transferring economic resources or wealth, twinged with a bit of social engineering.

Hugh Fustercluck said...

Let's not entertain the fantasy that anything the New York Legislature does is performed with any consideration of morality whatsoever. Our Legislature makes morality as much as factor in their lawmaking as callgirls do in complying with the varied requests of their clients, numbered 9 or otherwise.

The comment about the ethics of insurance companies in denying medical benefits to drunk drivers is simply irrelevant. As Mr. Mura correctly points out, the insurance companies did not write the exclusion into the law. They simply apply the law as it was written. Since when is it unethical to use a law for its intended purpose?

The relationship between insurance company profit margins and no-fault benefits for drunk drivers, which "anonymous" plats for us, is as specious as the relationship between one's astrological sign and their propensity to receive parking tickets -- and doesn't say much for "anonymous"'s legal reasoning skills.

I reiterate my savage and unrepentant opinion: drunks who cause car wrecks should be left exactly where they are found. And if it were my child, as "anonymous" posits in that appeal to emotion over logic which is such a tedious tactic of liberal types, then I would, of course, get medical care for him at my own expense, but I would also mourn the fact that my child was so reckless and irresponsible as to get behind the wheel of a car while drunk -- just as parents of drunken children have to do when they choose to veer around lowered railroad crossing gates and get T-boned by a Long Island Railroad commuter train.

Drunk drivers are killers. The cemeteries are littered with their innocent victims. Pardon me if I have no sympathy for them and don't care to see any effort made to keep them alive after they suffer the consequences of their criminal recklessness.

Anonymous said...

Not all drunk drivers are killers hu ghfuster cluck, I made it home just fine Saturday (afternoon I might add) without hurting myself or anybody else. Although I must admit I did veer torwards that cat . . .

Huge Fustercluck said...

Reply to "anonymous": Lots of drunks make it home without killing anybody. And sometimes gang members who fire into a crowd standing on a street corner don't hit anybody. Don't confuse the luck of the potential victims with morality on the part of the perpetrator.

Huge Fustercluck said...

Reply to "anonymous": Lots of drunks make it home without killing anybody. And sometimes gang members who fire into a crowd standing on a street corner don't hit anybody. Don't confuse the luck of the potential victims with morality on the part of the perpetrator.

Anonymous said...

Reply to "h ughfustercl uck"
A gang member who fires into a crowd has intent - mens rea - someone who may have a BAC over the arbitrary number set by the revenue raisers in government is trying to get home without hurting anyone and may get arrested for doing just that. Not comparable - next analogy.

Hufge Fustercluck said...

I agree that the legal BAC is an arbitrary number. Some people can hold their liquor much better than others. But notice, I didn't mention BAC -- I said "drunks." And by "drunk," I mean someone who is actually impaired, even if all they had was one of those chocolate covered cherrier with the liqueur inside. If you know you're impaired but get behind the wheel anyway, you have mens rea, in my humble but legally insignificant opinion.

Anonymous said...

Hugh - you actually said "Drunks who cause car wrecks" so I will cede your point there. Alcohol consumption, however, can really mess with the intent element of a crime - if it is sufficient to destroy the power to form specific intent. Basically, two wrongs don't make a right. How about fatigued drivers who cause accidents? What if they are on a cell phone? How about denying lung cancer patients who smoke medical treatment because some of their second hand smoke may have contributed to someone elses illness?

Huge Fustercluck said...

I have no problem with smokers. The causation process between smoking and disease is very long and very slow. And when it comes to second-hand smoke, I'm still curious as to how it is that second-hand smoke can allegely cause so much illness, and yet nobody has ever become addicted to second-hand smoke (nicotine is more addictive than heroin, remember?).

Anyway, yes, fatigue does cause car wrecks, and there is some relationship between cell phone use and car wrecks, but there is a general consensus that alcohol consumption and driving carries a moral taint, whereas fatigue and cell phone use are morally neutral (hey, even good people get tired and use cell phones, right?). Sure, there's some hypocrisy involved in these moral judgments, but if we took hypocrisy out of our moral judgments, life (and politics) would be very different, wouldn't it?

Anonymous said...

Either way, the drunk is still on the hook for the bills. Thus, this is merely Patterson's decision to keep the initial expense and risk the insured will not pay the bill on the Hospitals, rather than shifting it to the carriers.

Of course, this was a poor decision, since the insurer has a much closer nexus to the insured rather than a random hospital. Prior to the wreck, the insured paid no-fault premiums to the carrier, yet had no relationship to the hospital whatsoever.

I do not see the rationale behind Patterson's veto, someone please help me on this.

SunTzu