No-Fault Insurance Change

The Covenant Medical Center Inc Vs State Farm Case and How It Could Affect Your No Fault Claim

The Supreme Court has made a major change concerning the rights of medical practitioners in no fault cases. Previous to this decision, medical practitioners could sue insurance companies independent from their patients, which, while beneficial to the medical practices themselves, this could potentially impair the injury victim’s claims. Medical practitioners would choose to try their own cases to win remuneration for medical costs of the patient without waiting for that patient to win their own case and compensate doctors on their own. They saw this as a form of protection for their bills, as, in some cases, when their patient won their case, they felt as if their medical bills were compromised. This new decision could affect their right to collect their bills separately, which could both potentially benefit and harm the patients.

How Could This Benefit Patients?

If the doctor’s own bills are included in the patient’s case, It is usually easier and less expensive to try the case as their testimony is required in order to support their own claims. However, when thero bills are not part of the patient’s case, they typically charge for their time to provide the testimony.

It is also easier for lawyers to negotiate a resolution when there is a larger amount at stake. When medical costs are taken out of a case, the amount in dispute can be significantly decreased which can make it harder to negotiate a settlement on behalf of the injury victim. Taking into account the percent that the law firm must charge to handle the case, the amount at stake without being able to leverage all the claims, including the medical costs, can affect the potential resolution.

How Could this Harm Patients/Medical Providers?

Due to this ruling, Medical Practitioners are left with fewer options to protect their own bills. In order to be compensated, they must obtain an assignment from the patient or, potentially sue the patient directly. Although the Supreme Court provided for the option of an assignment in the Covenant opinion, the auto insurance companies have been arguing that patients cannot assign their rights. Moreover, there is another issue when the patient has disappeared or is unwilling to cooperate in litigation. The second option has the potential to cause additional and unneeded financial and emotional harm to the patient. Overall, this decision has the potential to put both the patient and their medical care provider in a difficult position not to mention that there is a very real possibility of destroying the all important trust that you must have in any physician patient relationship.


The repercussions and consequences, both intended and unintended, of the Covenant vs State Farm case on First Party or No-Fault Litigation may take years to sort out. In the meantime, it falls upon the attorneys who represent the victims of automobile collisions and the medical care professionals who treat them to make sure they work together to ensure that their respective clients continue to receive the compensation that they deserve.


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