When Paying a Bill Twice May be Required

E & W Acupuncture P.C. and Donegal Mut. Auto Ins.

AAA Case No. 412009031623, Arbitrator Stacey E. Charkey
Amount in Dispute: $1,603.10, reduced by the Applicant to $981.62

The assignor was allegedly injured in a motor vehicle accident and received acupuncture treatment from the provider applicant.   The assignor executed an AOB form to the provider  on 08/08/08, and the provider began submitting bills to Donegal, which issued payment to the provider.  On one bill however, instead of issuing payment to the provider, Donegal sent a check to the assignor, who, not wishing to look the good fortune horse in the mouth, took the check and cashed it.  The provider, however, continued to demand payment from Donegal.

Arbitrator Charkey ultimately held that Donegal was obligated to re-issue payment to the applicant provider, despite the fact that this would result in a double payment.  Arbitrator Charkey stressed the importance of the AOB form to the no-fault claim process, citing to both case law and Regulation 68-C, which requires a provider to submit either Form NF-3 or Form NF-AOB in order to receive direct payment from an insurer.  It was also pointed out that Donegal was “fully aware” of the assignment in this matter where it had previously made payment to the provider assignee and there was no evidence the assignment had been revoked.

Finally, Arbitrator Charkey stated that though the assignor was clearly paid in error, the error was on the part of Donegal, which had unspecified “remedies” to recoup that payment from the assignor.

Award:  $981.62

The lesson here is the importance of making sure that once an assignment of benefits has been properly executed, payment must issue directly to the assignee so as not to mistakenly give assignors a windfall.  This could result in needless suits over unjust enrichment, one of the “remedies” that Arbitrator Charkey mostly likely alludes to in her award.