Challenges to the reasonableness and necessity of medical treatment do not fall within the scope of a bad faith claim under Pa.R.C.P. § 8371.

The plaintiff’s complaint included a § 8371 bad faith count based on the carrier’s refusal to pay medical costs it found to be unreasonable and unnecessary. In dismissing the bad faith count, the court ruled the allegations actually fell within the scope of § 1797 in that they challenged the reasonableness and necessity of treatment. Examples of such challenges include an alleged failure to pay first-party benefits, to evaluate coverage, or to act in a reasonable time and in good faith. This is distinguished from challenges to the review process itself, or a carrier’s abuse of the review process, which would appropriately fall within the scope of § 8371. It is important to determine at the pleading stage whether the insured is challenging the reasonableness and necessity of medical treatment, as opposed to the claim review process itself. A carrier’s potential exposure is greater under § 8371 (3% interest + punitive damages) than § 1797 (12% interest + attorney fees).

_{Case Law Alerts, 1st Quarter, January 2019}

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