Oregon Farmers Insurance Lawsuit Overturned

In another ruling involving health care providers, the Supreme Court overturned the dismissal of a lawsuit against Farmers Insurance Co. for denying medical payments.

In a dispute over medical payments for traffic accident claims, the Supreme Court overturned the Oregon Court of Appeals and sent a lawsuit against Farmers Insurance Co. back to Multnomah County Circuit Judge Jean Kerr Maurer.

Five customers with automobile insurance policies sued Farmers, claiming it wrongly denied their medical costs resulting from traffic accidents because Farmers used a computerized review system instead of conducting an individual medical examination.

The court ruled that when a health care provider submits a claim for medical expenses it is presumed to be reasonable and necessary, and it is up to the insurance company to prove otherwise.

The court said the Legislature prohibited insurers from denying payment of claims without conducting a "reasonable investigation" of those claims, and the computerized review did not meet that requirement.

Justice Thomas Balmer noted in a separate opinion that the claim was part of a class-action effort to challenge similar practices by large insurance companies across the country.

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