Assigned Claims Plan FAQ’s

Assigned Claims Plan FAQ

Is the KACP Primary over Medicare and/or Medicaid?

YES. KACP’s position is that PIP provided through Kentucky Assigned Claims Plan is primary over Medicare and Medicaid, thus Medicare and Medicaid liens presented to servicing carriers can be considered from available KACP PIP funds of the Servicing Carrier.

Kentucky Motor Vehicle Reparations Act and Kentucky Revised Statute is pre-empted by Federal Law. The Kentucky Assigned Claims Plan is considered a third party who can be subrogated by Medicare/Medicaid. Federal Law states Medicare/Medicaid is the payor of last resort.

42 USC 1396k and 42 USC 1396a(a)(45) “Federal Medicaid law requires: ‘that the State or local agency administering such plan will take all reasonable measures to ascertain the legal liabilities of third parties (including health insurers, group health plans)(as defined in 607(1) of the Employee Retirement Income Security Act of 1974 [29USC 1167(1)]) Service Benefit Plan, and Health Insurance Maintenance Organization) to pay for care and services available under the plan.’”

42 USC 1396(a)(25)(A) “State plans are required to identify such other sources and, ‘where such legal liability is found to exist after medical assistance has been made available[,]…the State or local agency will seek reimbursement for such assistance to the extent of such legal liability.’” 42 USC 1396a(a)(25)(A-C).

KRS 205.510 (16) defines “third party,” as, “An individual, institution, corporation, company, insurance company, personal representative, administrator, executor, trustee, or public or private agency, including, but not limited to, a reparation obligor and the assigned claims bureau under the Motor Vehicle Reparations Act, Subtitle 39 of KRS Chapter 304, who is or may be liable to pay all or part of the medical cost of injury, disease, or disability of an applicant or recipient of medical assistance provided under Title XIX of the Social Security Act, 42 U.S.C. sec. 1396 et seq.;”
KRS 205.520 (5). “The Kentucky Medical Assistance Program shall be the payor of last resort and its right to recover under KRS 205.622 to 205.630 shall be superior to any right of reimbursement, subrogation, or indemnity of any liable third party.”

What Kentucky Statute includes authority for the Kentucky Assigned Claims Plan?

Pursuant to the authority contained in Chapter 304 of the Kentucky Revised Statutes and the duty contained in Subtitle 39, Section 170, the Commissioner of Insurance has promulgated and adopted the Assigned Claims Plan.

Who are members of the plan?

Every reparations obligor which qualifies with the Kentucky Department of Insurance to provide basic reparations insurance as security pursuant to KRS Chapter 304, Subtitle 39, shall become and remain a participating member in the Assigned Claims Plan as a condition of its continued approval by the Executive Director as an authorized provider of security for basic reparations insurance in compliance with KRS Chapter 304, Subtitle 39.

Who are servicing insurers and what role do they play?

All claims received by the Bureau shall be handled through Servicing Insurers.

Upon receipt of notice of a potential claim under the Plan, the servicing insurer receiving the assignment shall act promptly to determine the eligibility of benefits claimed. If the person is found ineligible, notice of ineligibility and the reasons shall be promptly communicated to such person or the legal guardian of that person, with copy to the Assigned Claims Bureau. If the person is determined eligible, benefits required by KRS Chapter 304, Subtitle 39 shall be paid promptly.

The servicing insurer shall have the same rights and obligations in the handling of any assigned claim as if it had issued a policy of basic reparation insurance complying with KRS Chapter 304, Subtitle 39. Each servicing insurer shall be entitled to full reimbursement from the Plan for all amounts paid as benefits pursuant to the Plan, and in addition thereto, shall be paid a handling fee to be set forth in the rules and regulations developed by the Governing Committee.

What persons are entitled to benefits under the plan?

KRS 304.39-030 (1) “If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060 (4).”

KRS 304.39-160 (1) “A person entitled to basic reparation benefits because of injury covered by this subtitle may obtain them through the assigned claims plan if…”

  1. Basic reparation insurance is not applicable to the injury for a reason other than those specified in the provisions on converted vehicles and intentional injuries;
  2. Basic reparation insurance applicable to the injury cannot be identified;
  3. Basic reparation insurance applicable to the injury is inadequate to provide the contracted for benefits because of financial inability of a reparation obligor to fulfill its obligations;
  4. A claim for basic reparation benefits is rejected by a reparation obligor for a reason other than that the person is not entitled under this subtitle to the basic reparation benefits claimed.
What persons are not entitled to benefits under the Plan?

Categories

  • Motorcycle occupants (KRS 304.39-040 (4))
  • Anyone having rejected their tort limitations (KRS 304.39-060 (8))
  • Owner/Occupants (KRS 304.39-160 (4))
  • Converters (KRS 304.39-190)
  • Intentional Injuries (KRS 304.39-200)

Additional:

  • He intentionally caused or attempted to cause injury to himself or another person, or
  • He was injured while maintaining or using a converted vehicle unless used in the good faith belief that he is legally entitled to do so, or
  • He has rejected or is deemed to have rejected the limitations on his tort rights pursuant to the No-Fault Act;
  • Such person was the owner occupant of the motor vehicle subject to the Kentucky No-Fault Act, which was not insured in accordance with that Act.
  • Such person qualifies for benefits under a policy of insurance or plan of self-insurance that provides benefits required by the
  • Kentucky No-Fault Act, and such benefits have not been denied such person.

The information provided is for reference purposes only, is not intended to be all inclusive and should in no way be construed as all encompassing. Each claim submission is reviewed based on its own merits and the documentation supplied. Plan staff reviews claim applications for preliminary eligibility only and the assigned servicing carrier makes the final determination as to whether the injured party meets coverage and eligibility requirements.

What information is needed to file a claim?

All persons making application for benefits under the Plan shall do so on forms prescribed by the Governing Committee and shall do so within the time limitations prescribed by KRS Chapter 304, Subtitle 39. All applications shall be directed to the Assigned Claims Bureau. Applicants for benefits shall cooperate with the Bureau or the servicing insurer to which the claim is assigned and shall among other things, provide upon request:

  • Full information regarding the accident in which the person was injured.
  • Full information relevant to the eligibility of the person to claim benefits under the Plan.
  • Full information establishing the necessity and reasonableness of medical expense incurred and for which claim is made.
  • Full information establishing the necessity and reasonableness of earnings lost.
  • Full information which would establish the identity and, except for immunity granted by KRS Chapter 304, Subtitle 39, probable legal liability of any person or persons alleged to have been the proximate cause of the accident in which the applicant was injured.

An original, complete, signed and dated Kentucky No-Fault Application and Supplement to the Application for Benefits must be submitted and mailed via US Mail to the Assigned Claims Plan. In addition, the following information will assist in providing timely response to the claim:

  • A complete listing of all group health insurance carriers and any other eligible source for medical payments.
  • Signed medical and wage authorizations.
  • List any and all vehicles owned by the person making application and everyone in the household. If they are insured, list the insurance carrier.
How are benefits determined?

The benefits to which any injured applicant under the Plan is entitled shall be those contained in KRS Chapter 304, Subtitle 39 subject to all applicable deductions, offsets, limitations, or reductions contained therein.

Are benefits otherwise available under Assigned Claims affected by the payment of health insurance, workers compensation or other benefits?

YES. 304.39-160 (3): Except in the case of a claim assigned under subsection (1)(d), If a person receives basic reparation benefits through the assigned claims plan, all benefits or advantages he receives or is entitled to receive as a result of the injury, other than by way of succession at death, death benefits from life insurance, or in discharge of familial obligations of support, are subtracted in calculating net loss.

Of course, that statute having been duly adopted by the Kentucky General Assembly and it not having been addressed or interpreted by any binding reported appellate decision of any court in the Commonwealth of Kentucky, it is the law on this issue and it clearly and unequivocally states that “all benefits or advantages [that a PIP Claimant] receives or is entitled to receive as a result of the injury… are subtracted in calculating net loss”. As such, the subtracting of those benefits is not discretionary, but must be “subtracted in calculating net loss”.

KACP does agree with its interpretation of Kentucky law on this issue, as set forth above. Any dispute regarding this PIP claim handling matter needs to be addressed between the party and the servicing carrier and not the KACP. KRS 304.39-170(2) states the Servicing Carrier hall have the same rights and obligations in the handling of any assigned claim as if it had issued a policy of basic reparation insurance.

According to State Auto v. Outlaw, Ky. App., 575 SW 2d 489 (1978), a PIP carrier does not owe PIP unless and until it receives “sufficient information to determine both the fact and the amount” of the PIP loss claim. Without the information to determine “net loss”, “the amount” owed as PIP cannot be determined.