Opinion ID: 710232
Heading Depth: 2
Heading Rank: 3

Heading: Allowable Expenses

Text: 60 The No-Fault Act allowed persons injured in automobile accidents to recover allowable expense[s]. The Act defined such expenses in relevant part, as follows: 61 Allowable expense means reasonable charges incurred for, or the reasonable value of (where no charges are incurred), reasonably needed and used products, services and accommodations for: 62 (A) professional medical treatment and care; 63 (B) emergency health services; 64 (C) medical and vocational rehabilitation services; 65 (D) expenses directly related to the funeral, burial, cremation, or other form of disposition of the remains of a deceased victim, not to exceed one thousand five hundred ($1,500) dollars; ... 66 40 Pa.S. Sec. 1009.103 (repealed). The parties agree that the attendant care in dispute here does not fall under the category of emergency health services. 5 Lisa does contend, however, that her attendant care needs do fit within the definition of professional medical treatment and care and medical rehabilitation services. 6 67 The district court concluded that the Pennsylvania Supreme Court's decision in Drake v. Pennsylvania National Mutual Casualty Ins. Co., 529 Pa. 44, 601 A.2d 797 (1992), controlled its analysis. The court held that, under Drake, attendant care provided by accredited non-family, professional medical treatment and care providers is an allowable expense under Section 103 of the Act, Memorandum Opinion at 11, and therefore granted summary judgment to Lisa on her attendant care claim. 7 68 Travelers argues that Drake is not controlling; that attendant care services are not an allowable expense under the Act even if provided by accredited care-givers; and that it therefore has no obligation to pay for such services. In Drake, Millard Fertig suffered serious spinal injuries when the automobile he was driving was struck from behind by another car. As a result of the injuries, Fertig was rendered quadriplegic. He received in-patient hospital care for approximately two months and then was released to his home with special equipment and nursing care. However, within a year of the accident, he was admitted to a nursing home where he remained until his death approximately 5 years later. 69 Fertig's automobile was covered by insurance under the No-Fault Act and his carrier paid all of the costs of his medical treatments. However, approximately three years before his death, the carrier filed a state-court declaratory judgment action to determine its obligation to pay for Fertig's room charges in the nursing home under the No-Fault Act. The carrier argued that it was not liable for the room charges because Fertig was receiving only custodial care at the home rather than medical or rehabilitative treatment. Drake, 601 A.2d 797, 798-799. 70 At trial, the carrier presented medical testimony that Fertig had reached the point in his rehabilitation where he was no longer a candidate for physical therapy and was receiving only maintenance and supportive care. Id. 601 A.2d at 799. However, one physician testified that Fertig needed periodic review of his bladder and bowel functions, that he required skilled nursing care or his condition could regress, and that even though he was not a candidate for rehabilitation he needed medical and nursing care because of his condition. Id. 71 The trial court found that Fertig's medical condition required the care he was receiving at the nursing home and that Fertig's no-fault carrier had to pay that cost under the Act. Accordingly, the trial court ordered the carrier to pay for all of Fertig's charges at the nursing home including that portion of the charges that resulted from only custodial care. 72 On appeal, the Pennsylvania Superior Court reversed, holding that under Reilly v. SEPTA, 507 Pa. 204, 489 A.2d 1291 (1985), no-fault carriers have no obligation to pay for expenses that are merely custodial. See Pennsylvania National Mutual Casualty Ins. Co. v. Fertig, 382 Pa.Super. 335, 555 A.2d 208 (1989). In so deciding, the Superior Court quoted Reilly stating: [s]ervices which do not reduce the disability of the victim or restore his functioning, being custodial in nature, would not be recoverable under the No-Fault Act.... 555 A.2d at 209, (quoting Reilly, 489 A.2d at 1303). The Pennsylvania Supreme Court then granted allocatur: 73 [t]o consider whether such custodial care might be 'medical care' payable by the insurer as an allowable expense under 40 P.S. Sec. 1009.103 even though Reilly held that it was not the responsibility of the insurer because it was not rehabilitation under Sec. 103. 74 601 A.2d at 799. 75 The Pennsylvania Supreme Court ruled that the Superior Court's reliance on Reilly had been misplaced and reversed. 601 A.2d at 800. The court reasoned that Reilly only held that custodial care that was not rehabilitative was not recoverable as medical and vocational rehabilitation services. However, [i]t was never suggested that custodial, non-rehabilitative care might nonetheless be 'medical care' recoverable from a no-fault carrier as another type of allowable expense, namely 'professional medical treatment and care.'  Id. 76 The Court noted that the purpose of the No-Fault Act was to provide prompt and adequate basic loss benefits to victims of motor vehicle accidents and to guarantee that accident victims receive prompt and comprehensive professional treatment. Id. The court also noted that under Pennsylvania's Statutory Construction Act, 1 Pa.C.S.A. Sec. 1928(c), the No-Fault Act must be liberally construed to effectuate its purposes, erring in favor of coverage for the insured in close or doubtful cases. Id. (emphasis added). 77 The court ruled that Fertig's nursing home accommodations would be covered under the No-Fault Act if the accommodations were necessary either as professional medical treatment and care or medical and vocational rehabilitation services. The court concluded that if the cost of Fertig's nursing home accommodations was an allowable expense, then the room charges, i.e., custodial care charges, were covered as well. Id. at 801. Although Reilly precluded no-fault coverage for non-rehabilitative custodial care, the court determined that entitlement for the cost of 'professional medical treatment and care' may include medically necessary nursing services even if the services may be characterized as custodial. Id. Thus, Fertig's nursing home accommodations were payable by his no-fault carrier as professional medical treatment and care, and constituted an allowable expense under the Act even if some of the services included in those charges were custodial in nature as long as the custodial services were necessary due to accident-related injuries. Id. 78 The analysis in Drake was based, in part, on language contained in Fertig's no-fault policy with the carrier. That policy covered reasonable charges incurred for professional medical treatment and care which included hospital and professional nursing services for diagnosis, care, and recovery.... Id. Here, there is no insurance policy because Lisa's claim was processed under the Assigned Claims Plan. Nonetheless, we do not believe that the absence of a policy which defines professional medical treatment and care is crucial to the resolution of this case. The Drake court noted that the No-Fault Act does not define professional medical treatment and care. Additionally, the court noted that neither the No-Fault Act nor 31 Pa.Code Sec. 66.102 (which sets forth a sample No-Fault insurance policy) excludes custodial care from the definition of professional medical treatment and care. Drake 601 A.2d at 801. 79 Under Drake, custodial services that are administered as part of professional medical treatment and care are an allowable expense under the No-Fault Act so long as they are required because of accident-related injuries. See also, American Motorists Insurance Co. v. Farmers Bank and Trust Co. of Hanover, 435 Pa.Super. 54, 644 A.2d 1232 (1994). 80 In Farmers Bank and Trust Co., American Motorists, the no-fault carrier, filed a petition for declaratory judgment seeking to be relieved of its obligation to pay for nursing home services which it characterized as custodial care. Id. 644 A.2d at 1233. Farmers Bank, the guardian of the estate of the person injured in the automobile accident, filed an answer and then moved for judgment on the pleadings, alleging that it was entitled to judgment as a matter of law because the no-fault carrier failed to raise the issue of whether the nursing home care was related to the accident. The trial court granted the motion for judgment on the pleadings and the no-fault carrier appealed. 81 A panel of the Pennsylvania Superior Court affirmed the trial court's grant of the motion for judgment on the pleadings. 8 In reaching that decision, the court commented as follows: 82 In Drake v. Pennsylvania Nat. Mut. Cas. Ins. Co., ..., our supreme court held that, under the No-Fault Act, there is no per se exclusion for expenses related to medical and nursing care which is custodial; and that the cost of custodial care was an allowable expense under the applicable no-fault automobile policy under the No-Fault Act, so long as it was necessary due to accident related injuries. Thus, the fact that the insured is receiving custodial care does not, of itself, relieve the insurer of the responsibility of the cost of his care. Rather, the insurer must, in terms of a motion for judgment on the pleadings, allege not only that the care is custodial, but also that the care in unrelated to the accident, in order to be relieved of the financial responsibility for the costs of this type of care. 83 644 A.2d at 1235 (citations omitted). Accord, Gallagher v. Harleysville Mutual Insurance Co., 421 Pa.Super. 192, 617 A.2d 790, (1992) (custodial services are compensable under Sec. 1009.103 as an allowable expense of a professional medical treatment or care.) 84 Travelers is arguing that custodial care in the form of attendant care is not compensable under the Act even if administered by accredited health care professionals. 85 It is beyond dispute that if Lisa were institutionalized in a rehabilitation center or nursing home Travelers would be obligated to pay the cost of custodial care that she received. See Drake, supra. Travelers' argument here is merely a restatement of the position that the Pennsylvania Supreme Court ruled against in Drake. The only distinction we perceive between Drake and its progeny on the one hand, and Lisa's claim on the other hand, is that Lisa has chosen to remain at home rather than be institutionalized. That choice cannot defeat her claim for No-Fault benefits. She needs attendant care because of her accident-related injuries, and Travelers cannot argue otherwise. Travelers' own expert opined that Lisa should have a licensed practical nurse available to her to change her Foley catheter and to supervise the attendant care so that it is done effectively or any time she runs into respiratory, skin, autonomic, or GU complications. Joint Appendix at 473a. In addition to nursing supervision of her general attendant care, Lisa needs review of her bowel functions, including periodic artificial stimulation. This attention to bowel and bladder functions is similar to the kind of care Fertig was receiving in the nursing home in Drake and is, we believe, the kind of care that led the Pennsylvania Supreme Court to find that Fertig's nursing home accommodations were professional medical treatment and care. 86 A contrary conclusion would mean that Lisa can only receive the attendant services she needs if she is taken from her own home and placed in a professional care facility such as a nursing home. Yet, such a result would not benefit either party to this dispute. It would add to Travelers' costs, and relegate Lisa to an institution. Accordingly, we find that the attendant care services needed by Lisa are an allowable expense under Section 103(A) of the No-Fault Act. 9 87 Nevertheless, after a careful review of the record, we are concerned that the district court did not adequately address the exact nature and type of attendant care services Lisa requires. It appears that the district court assumed that Lisa would need the attendant care services outlined in the EIH Evaluation, however the court never made a finding to that effect. See Memorandum Opinion at 5 n. 3. 10 It is, of course, entirely possible that the district court intended that the attendant care services at issue are those set forth in the comprehensive and detailed EIH recommendation attached to the counterclaim and a formal finding to that effect may, therefore, be all that is necessary. In its order dated October 14, 1994, the court simply declared that Lisa was entitled to payment for all  'allowable expenses' under the Pennsylvania No-Fault Motor Vehicle Insurance Act ... and [Drake ]. However, declaring that Travelers is liable for all payments required by law does not provide either side to this dispute the clarification the parties are entitled to. Accordingly, we will remand for a determination of the nature and type of attendant care services which are appropriate for Lisa's needs. If the district court concludes that those services are sufficiently set forth in the EIH report it may, of course, make a finding of fact to that effect.