The Colorado Court of Appeals recently ruled against State Farm Mutual Automobile Insurance Company by reversing an earlier ruling that allowed the use of a computer database to determine medical cost reimbursements.

According to the Colorado Court of Appeals, Pauline Reyher was injured in an auto accident and treated under her State Farm no-fault insurance policy, which at the time required State Farm to pay for all reasonable and necessary expenses for medical services related to auto accidents.

Dr. Wallace Brucker treated Reyher and submitted the charges to State Farm for reimbursement. State Farm then processed the charges through Sloans Lake Auto Injury Management medical database and recalculated the amount to be paid to Brucker. State Farm in turn compensated Brucker for an amount they considered reasonable, after consulting the database that showed other physicians in the area charged less for similar services.

The only problem? Brucker was the only treating physician in the area who performed the services Reyher required. That led Reyher and Brucker to bring suit against State Farm and Sloans Lake for breach of the no-fault act.

The case will proceed to trial court for further proceedings.

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State Farm At Fault in No-Fault Lawsuit

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