No-Fault’s Failure in America

The Chiropractic community should be concerned about the “Pure No-Fault” initiative which will be on California’s, March 1996 ballot. There are several different features in the initiative that are obviously anti-chiropractic. Despite that, would No-Fault serve a useful social end?

Across the United States No-Fault has shown a persistent theme of failure and deception. Higher rates and fewer benefits for consumers have been the results.

Insurance companies, in order to control costs and generate greater profits, used their influence in state legislatures to create a system which would provide them with greater leverage over consumers with automobile accident claims. A consistent promise made by the insurance carriers was that No-Fault would provide more benefits for consumers at lower premiums. Neither promise has come true. Moreover, not a single new state has adopted No-Fault in the last 15 years. In fact, at least three states have repealed their No-Fault statutes.

Pennsylvania, Nevada and Georgia each experimented with No-Fault and found, through hard experience, that No-Fault did not keep its promises of lower premiums and improved benefits. All three states repealed their No-Fault laws and returned to the tort system.

Where No-Fault Hurts Worst

In 1973, No-Fault came to Michigan. In order to maintain a viable court claim, the victim has to prove, to the satisfaction of the jury, that he or she WAS hurt with a “serious” important bodily injury, such as fractures, scarring or herniated disc. Otherwise, the victim receives nothing except medical payment (if not disputed) and some loss of earnings.

Michigan’s med pay insurance companies usually order a quick “IME” in order to justify stopping care. There is no appeals process in Michigan when the insurance company stops payment for med pay benefits. The only option the Chiropractor has is to file suit. There is no bad faith sanction against the insurance company for intentional disregard of the patient’s well-being.

According to John Vos, a Chiropractic attorney in Michigan, insurance companies simply invite Chiropractors to sue them. Most Chiropractors are unable to afford the fees and the lengthy delays in order to get there bills paid. Consequently, the Chiropractic services are difficult to get or maintain for Chiropractic patients.

New York’s No-Fault is worse. No-Fault was imposed in New York in the early 1970′s and was revised again in 1974. Attorney James Hogan, a New York Chiropractic attorney, states that all Chiropractic is controlled by the worker’s comp board. For example, the x-rays that Chiropractors provide generally get paid 50% less than if the x-rays were taken by a medical radiologist. The Chiropractic fee schedule currently under No-Fault offers between $16 to $21.90 for an office visit. Again, because the patient’s are at the mercy of the insurance company, Chiropractic care is often discouraged by the No-Fault system.

No-Fault is not popular anywhere. In 1990 and again in 1994, the conservative state of Arizona voted twice in public referendums to reject No-Fault.

Big insurance tried to pass No-Fault by initiative in 1988 in California. Voters rejected No-Fault with over a 2-1 majority.

California’s No-Fault Proposal

No-Fault has not delivered its promises. It has not reduced premiums, nor has it improved benefits for consumers. It has been generally injurious to Chiropractors and their patients. Consumers have almost never benefited.

The California Pure No-Fault Initiative is the most radical proposal anywhere in the United States. In its mission statement the Pure No-Fault Act states:
“(4) limit the fees paid to health care providers…”

It would immediately reduce all Chiropractic -fees to the workers’ comp fee schedule. It would also provide the power to reduce fees through a political appoin tee, namely the Director of the Workers’ Comp Appeal Board. Additionally, it employs a bureaucratic Peer Review which could significantly delay Chiropractic benefits for over 150 days. The act requires that any Peer Review Organization be a designated HCFA organization. Unfortunately, there is not a single Chiropractic review organization which is affiliated with HCFA. It is possible that the Peer Review would be medically dominated and biased against Chiropractic doctors and their patients.

It is vitally important that the Chiropractic community educate, communicate and mo bilize against this initiative as never before.

Chiropractic personal injury patients are a vital part of any healthy practice. If insurance companies are permitted unfair leverage over personal injuries cases, significant numbers of patients will be denied care and Chiropractic participation could be greatly reduced in personal injury cases.

California Chiropractors have been burdened for years with the growth of managed care, the decline of major medical insurance and reductions of other forms of insurance. Chiropractors can organize and work with the California Chiropractic Association to defeat the Pure No-Fault initiative. California Chiropractors can reactivate their political muscle to help ensure that the public is not fooled into eliminating Chiropractic care of personal injury cases.

California Chiropractic Association Journal—December 1995