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filed: March 13, 1987.


Appeal from the Order entered March 19, 1985, Court of Common Pleas, Allegheny County, Civil Division at No. GD84-20463.


Michael P. Malakoff, Pittsburgh, for appellant.

John C. Conti, Pittsburgh, for appellee.

Cirillo, President Judge, and Cavanaugh, Wickersham,*fn* Rowley, Wieand, Olszewski, Del Sole, Popovich and Johnson, JJ. Del Sole, J., files a dissenting opinion.

Author: Johnson

[ 361 Pa. Super. Page 372]

Once again, we are presented with a narrow issue under the Pennsylvania No-fault Motor Vehicle Insurance Act, (No-fault Act) Act of July 19, 1974, P.L. 489, No. 176, § 101 et seq. 40 P.S. § 1009.101 et seq., repealed by the Act of February 12, 1984, P.L. 26, No. 11, § 8(a), effective October 1, 1984.

On this appeal, we must determine whether a collateral insurer under the No-fault Act is obligated to reimburse an automobile accident victim for the difference between (1) the amounts accepted by the health care providers in full satisfaction of their bills and (2) the amounts shown as customary charges on bills provided to the victim for use in obtaining a double recovery. We conclude that the amount which a provider of goods and services accepts in exchange for the goods or services provided represents the best gauge of the reasonable charges actually incurred. Accordingly, we affirm the order denying recovery of unobligated customary charges.

In 1982, the victim, Lynn Hauck, was injured in an accident while a passenger in a motor vehicle. She was entitled to no-fault benefits under her father's insurance policy with Ohio Casualty. She also enjoyed Blue Cross/Blue Shield (BC/BS) coverage under a separate medical benefits group policy held by her father. The father had not elected, under Section 203(b) of the No-fault Act (40 P.S. § 1009.203(b)), to make the BC/BS group insurance the primary insurer in the event of medical claims, a process which would have resulted in a lower premium on the Ohio Casualty policy.

A victim may twice recover the charges incurred for medical care, when, as here, the victim may have BC/BS or other similar coverage which is available to pay the same

[ 361 Pa. Super. Page 373]

    charges for which the no-fault insurer is liable. Steppling v. Pennsylvania Manufacturers Association Insurance Co., 328 Pa. Super. 419, 477 A.2d 515 (1984).

As a result of the injuries sustained, the victim received medical treatment and services resulting in total billings of $25,265.69. Blue Cross/Blue Shield paid $10,475 in accordance with reduced payment agreements it had with the health care providers. Pursuant to the agreements between BC/BS and the providers, the reduced payments were accepted by the providers as fully discharging all of the billings which occurred as a result of the care which had been rendered the victim.

The victim thereafter submitted written claims to the collateral insurer, Ohio Casualty, for $25,265.69. Ohio Casualty paid the victim $10,475, the same amount already paid by BC/BS to the providers in full satisfaction of all claims.

The victim instituted this class action against Ohio Casualty, seeking: (1) declaratory relief that she and other class members were entitled under the No-fault Act to the full amount billed by providers; (2) an injunction prohibiting Ohio Casualty from paying less than the full amount billed; (3) damages equal to the difference between amounts paid and the full amounts of the bills in each instance; (4) interest on those amounts; and (5) costs and reasonable attorney fees. Ohio Casualty responded with preliminary objections in the nature of a demurrer and a motion for a more specific pleading. The Honorable Silvestri Silvestri sustained the demurrer, denied the motion for a more specific pleading and dismissed Hauck's complaint without leave to amend. This appeal followed.

We believe that this case must be determined by construing the language contained in Section 103 of the No-fault Act, which provides in pertinent part:

§ 103. Definitions

As used in this act:

"Allowable expense" means reasonable charges incurred for, or the reasonable value of (where no charges are

[ 361 Pa. Super. Page 374]

    incurred), reasonably needed and used products, services, and accommodations for:

(A) professional medical treatment and care;

(B) emergency health services;

(C) medical and vocational rehabilitation services;

Looking to this section, the victim argues on appeal that the measure of allowable expense must be the reasonable value of medical treatment and care. She would have us ignore the reasonable charges incurred, and focus on the "reasonable value" language; since BC/BS paid all of her medical bills, the dispute in this case should not involve any charges directly incurred by the victim. Her contention is that Ohio Casualty should not be permitted to limit its payable benefits simply because she did not incur any economic loss and did not pay the reasonable value of the service rendered to her. She also argues ...

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