Delaware task force weighs PIP, collateral-source rule and care-paths to curb medical costs

The Automobile Insurance Reform Task Force met in hybrid format and turned a 30-minute session into a detailed review of medical-cost drivers, focusing on personal injury protection (PIP), the collateral-source rule and alternatives such as care-paths.

Chair Senator Spiroz Pantomino opened the session and asked members to prioritize recommendations that could be included in the task force report. Mindy summarized a distributed handout, saying the group faces “two separate problems”: providers charge similar services at different prices across payers, and “there’s a bubble under the collateral-source rule” where plaintiffs can receive amounts that exceed what providers are likely paid, which she said drives up premiums for all policyholders.

Provider representatives pressed for recognition of collection realities. Doctor Colon said a provider brief shows PIP is not equivalent to other payers and that collecting payment is difficult: “there’s no way to verify how much PIP is left,” he said, adding that providers face sequencing and verification barriers and often accept letters of protection or discontinue care if payment is uncertain. Colon cited provider-collection differences (his brief notes roughly 15% collections for some PI auto bills versus stronger collections under other payers) and warned that reforms must address who pays and when.

Insurance-sector participants urged caution about collateral-source reform. Paul Tetrault recommended considering modifications used in other states; Stephen Marford of the Delaware Travelers Association stressed precedent and equity concerns, saying Delaware Supreme Court decisions treat the collateral-source rule as protecting injured people from being prejudiced by insurers.

Members also discussed care-paths as an alternative to fee schedules. Holly described care-paths as standardized courses of treatment used elsewhere and flagged that they are “quite different than a fee schedule.” Provider speakers agreed care-paths require an adjudicatory mechanism; Doctor Wong warned that without adjudication capability care-paths could cause new disputes and fiscal costs.

What happens next: The task force did not adopt formal policy at this meeting but directed discussion toward producing recommendations and an appendix of supporting documentation. Members asked staff to refine options that address payment sequencing, verification and the adjudication mechanism needed for care-path models.

Quotes: “We have two separate problems,” Mindy said, and later: “It’s the bubble as we like to call it.” Doctor Colon: “There’s no way to verify how much PIP is left.” Stephen Marford: “The collateral source rule is to protect the injured person.”

The task force scheduled its next meeting for Feb. 9 to continue work on remaining items.