The Supreme Court published Neurodiagnostics, Inc. v. Kentucky Farm Bureau, which discussed whether a medical provider could assert a direct action against an insurance company to recover basic reparations benefits through an assignment by the insured.  The case arose out of two lawsuits filed by Neurodiagnostic’s, Inc. against Farm Bureau and State Farm Insurance Company, arising out of medical services performed on insureds for injuries resulting from two auto accidents.

The Supreme Court concluded:

Upon review, we conclude that the MVRA no longer affords a direct right of action by assignment to medical providers against reparation obligors. Instead, the control rests with the insured to direct payment of his or her benefits among the different elements of loss.

The Court noted the affect of the repeal of the assignment statute:

With this change in the law, the legislature recognized that it is a more efficient, economical, and equitable system to keep the provider out of the reparations process and afford the insured the control of how his or her benefits are paid because there is only a certain amount of money available for payment. If each and every medical provider obtained an assignment-as a matter of course-of any right to benefits under the MVRA, the insured’s benefits could be exhausted after an accident, leaving the insured no ability to decide at a later date that he or she would be better served by directing reparation benefits to cover some other element of loss, such as economic loss.

The MVRA no longer allows an insured to assign his or her claim for basic reparation benefits.  Instead, the insured directs those benefits, in any manner or means allowed by the MVRA, including directing payment of lost wages or other economic loss.

Editor’s Note:  Why is it so important for the PIP carrier to pay these bills as opposed to health insurance or the insured?  The answer is simple.  Under PIP, Neurodiagnostics, Inc., receives compensation for 100% of its bill versus the reduced rate usually paid by a health insurer or worse the amount paid by the insured out of the settlement proceeds.  How important has the race to the PIP payout become.  Important enough that medical providers will apparently try to sue the insurance companies directly to recover their bills.


The Supreme Court published Jones v. Cross, which dealt with whether or not the Sheriff’s Office was entitled to official immunity for the acts of its deputies, and if so, whether KRS 70.040 waives it.  Sheriff’s deputy injured two state troopers while attempting to catch an evading suspect.  The liability of the deputy was not an issue.  The liability of the Sheriff’s Office for the actions of his deputies was.

After reviewing the common law the Court declared the Sheriff’s Office immune from suit under the doctrine of absolute official immunity.  The true question was whether KRS 70.040 wiaved this immunity.  The Court found it had.  It noted:

A literal or plain reading of the statute clearly imposes liability on the sheriff in his official capacity for acts committed by his deputies . In construing a statute, words must be given their literal, usual, and ordinary meaning unless they have acquired a technical meaning .

The Supreme Court affirmed the appellate court’s opinion, overruling the trial court, which had found KRS 70.040 did not waive immunity.