Stiffler v. Insurance Commissioner of Pennsylvania

Citations: 786 A.2d 296; 2001 Pa. Commw. LEXIS 794

Court: Commonwealth Court of Pennsylvania; October 31, 2001; Pennsylvania; State Appellate Court

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Logan Stiffler petitioned for review of an order from the Pennsylvania Insurance Commissioner that upheld the Catastrophic Loss Benefits Continuation Fund's (CAT Fund) denial of his reimbursement claims for expenses related to special equipment needed for hunting. Following a motor vehicle accident in 1988, Stiffler became a T4-5 paraplegic and is eligible for CAT Fund benefits. Despite being able to operate a modified vehicle and receiving home health assistance, he can no longer ambulate in the woods as he did before the accident. Stiffler incurred approximately $11,000 in expenses while seeking a modified vehicle and found a Kale-Kart costing $14,881.34, which he requested reimbursement for from the CAT Fund's administrator, Inserveco. An independent medical examination concluded that using a Kale-Kart for hunting was merely a hobby without medical necessity. Consequently, Inserveco denied his request, a decision upheld by the CAT Fund's claims manager. Stiffler appealed the denial to the Insurance Commissioner, who affirmed the CAT Fund's decision, leading to his current appeal. Stiffler argues that the CAT Fund should cover the Kale-Kart as a necessary medical expense, but the court disagrees, noting that the definition of 'catastrophic loss benefits' under the now-repealed MVFRL is limited to reasonable and necessary medical treatment and rehabilitative services.

Section 1712(1) of the MVFRL mandates that insurers in Pennsylvania must provide first-party benefits for reasonable and necessary medical treatment and rehabilitative services. These services encompass a wide range of medical care, including hospital, surgical, psychiatric, chiropractic, physical therapy, and necessary medical supplies or devices. Section 1702 defines "necessary medical treatment" as services deemed essential by a licensed health care provider. 

In the case of Stiffler, an eligible claimant rendered paraplegic from an automobile accident, he failed to demonstrate that his expenses, including those for a Kale-Kart, constituted reasonable and necessary medical treatment. Instead, he argued that these expenses were for rehabilitative services. The Commissioner rejected this argument, interpreting rehabilitative services as those that enhance a person's ability to perform daily activities and promote independence. The Commissioner noted that Stiffler had reached his maximum medical improvement and that the Kale-Kart would not provide any rehabilitative benefit but would only support a hobby. 

The Commissioner emphasized the importance of maintaining the solvency of the CAT Fund, stating that coverage for recreational activities could jeopardize this obligation. Consequently, the order of the Commissioner was affirmed, confirming that Stiffler's condition and expenses did not qualify for the benefits sought under the applicable law. The Trust Fund, established to support catastrophic loss benefits, had specific criteria for coverage, which Stiffler did not meet.

Benefits for certain individuals remain payable despite the repeal of Trust Fund legislation, as the General Assembly established the CAT Fund and transferred funds from the Trust Fund to it. Stiffler received a special permit in 1996 from the Game Commission to hunt from a vehicle on designated roads. Inserveco informed him that under the Motor Vehicle Financial Responsibility Law (MVFRL), the CAT Fund would only cover medically necessary and accident-related services. His request for coverage was denied based on Dr. Morgan's report, which deemed the Kale-Kart as neither medically necessary nor reasonable. The Commissioner found that Stiffler did not prove the special equipment's costs were reasonable medical treatment or rehabilitative expenses. The review is limited to errors of law, violations of constitutional rights, or whether findings are supported by substantial evidence, as outlined in Section 704 of the Administrative Agency Law. There is no direct Pennsylvania appellate authority on this matter, though prior cases have addressed similar determinations of reasonable and necessary medical treatments, such as in Tagliati v. Nationwide Insurance Company. Dr. Morgan's independent examination concluded that Stiffler’s use of the Kale-Kart would be purely recreational, lacking any medical benefit.