NO. 1575 Philadelphia, 1984, Appeal from the Order of May 23, 1984 in the Court of Common Pleas of Philadelphia County, Civil Action, At No. 933 October Term, 1983.
David M. McCormick, Philadelphia, for appellant.
James D. Rosen, Philadelphia, for appellee.
Beck, Popovich and Trommer,*fn* JJ.
[ 342 Pa. Super. Page 431]
The issue in this appeal is whether an insured who elected to make her basic loss benefits under the No-Fault Motor Vehicle Insurance Act*fn1 excess insurance to the primary medical insurance provided by her health maintenance organization ("HMO") may recover the full amount of medical expenses from her no-fault (excess) carrier when she voluntarily chose to obtain medical treatment from non-HMO physicians. We hold that such an insured may not recover the full amount of her expenses from her no-fault (excess) carrier and accordingly reverse the order of the trial court.
In 1979, appellee Saundra Carr applied for no-fault coverage for her 1979 Chevette. Section 203(b) of the No-Fault Act, 40 P.S. § 1009.203(b), provides that an insured who possesses other medical insurance may elect to make that
[ 342 Pa. Super. Page 432]
collateral coverage the primary source of basic loss benefits. Section 203(b) continues:
"In all such instances each contract of insurance issued by an insurer shall be construed to contain a provision that all basic loss benefits provided therein shall be in excess of any valid and collectible benefits otherwise provided through such program, group, contract or other arrangement as designated at the election of the owner or operator which shall be primary."
Section 203(c), 40 P.S. § 1009.203(c), then provides that such excess coverage shall be offered at a discount reflecting the diminished risk accepted by the no-fault carrier. Because appellee possessed other medical insurance, she made this election in her application and received a 40% reduction in premium for basic loss coverage.
Appellee was injured in an automobile accident on February 7, 1983. At that time her primary medical insurance was an HMO membership paid for by her employer, Rolling Hill Hospital. Before the accident appellee had received general medical and gynecological treatment from her HMO primary physician and an HMO-approved specialist. However, she chose not to visit her HMO primary physician for treatment for the injuries she sustained in the accident. Neither did she seek a referral to an HMO-approved specialist. Instead, she received treatment from a non-HMO physician who had been recommended to her by a friend. HMO denied payment for these medical services, and appellee sought reimbursement from her no-fault carrier, appellant Erie Insurance (hereinafter "appellant" or "Erie"). Appellant denied the claim on the ground that Erie, as the excess insurer, was not liable for medical treatment which appellee could have obtained through HMO-approved physicians. Appellee then filed suit against Erie ...