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PIP Clarification
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Kentucky Department of Insurance Issues PIP Fee Discount Clarification

On October 4, 2013 the Kentucky Department of Insurance (DOI) issued bulletin 2013-04 regarding Motor Vehicle Reparations Act commonly known as Personal Injury Protection ("PIP”) or Kentucky No-Fault Benefits. The bulletin clarifies that the law allows for negotiated payment rates for Kentucky No-Fault benefit payments; however, it does not allow for an insurer to arbitrarily and unilaterally reduce provider fees.


The current portion of the Motor Vehicle Reparations Act clarified in the October 4 bulletin reads as follows:


304.39-245 Reparation obligor's request for or negotiation of reduction or modification of charges.

A reparation obligor may request or negotiate a reduction or modification of charges from a provider of services to a secured person. In no event shall a provider of services which agrees to a reduction or modification of the charges bill the secured person for the amount of the reduction or modification. Nothing in this section is intended to prohibit a provider of services from billing charges to a secured party if the charges are not paid by a reparation obligor because the reparation benefits have been exhausted.


The October 4, 2013 DOI bulletin states that a Reparations Obligor (PIP Carrier) cannot pay a provider less than the amount the provider billed for Automobile No-Fault Benefits, unless the PIP Carrier can produce a written agreement between the insurer or third party administrator (TPA) and the provider allowing the discount. The insurer must also identify the agreement on the explanation of benefits when a reduction is made and the agreement must state that it is applicable to Kentucky No-Fault Benefits. Questions regarding the bulletin can be directed to Russ Hamblen via email: at the Kentucky Department of Insurance. The bulletin can be found here: PIP Bulletin


If you have had your claim payment reduced by a PIP Carrier without an agreement with the carrier or TPA, please file a complaint with the KY DOI at:

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