Two USAA units sought to toss two insureds' proposed class action accusing the companies of under-reimbursing their medical providers via claim handling software, telling a Washington federal court "there is no admissible evidence that plaintiffs' treatments were medically necessary and related to their auto accidents."

Seeking summary judgment Thursday against plaintiffs Caryn Jennings and Tricia Harder, USAA Casualty Insurance Co. and USAA General Indemnity Co. further maintained that the "use of vendors and computerized processing of bills to assist in the adjustment of medical bills is permitted under Washington law."

The dispute specifically centers on Jennings' and Harder's claims that USAA, via software from Auto Injury Solutions Inc., underpaid personal injury benefits under their auto policies, marking reductions to reimbursements with various codes that USAA refers to as "reason codes."

One of those reason codes related to charging differing rates for medical providers who are part of a preferred provider organization, or PPO, USAA highlighted Thursday, adding that PPO agreements "require providers to agree not to 'balance bill' their patients for the difference between their agreed-upon PPO rates and the billed amount."

"Plaintiffs' challenge to PPO reimbursements is bizarre," USAA said. "They do not dispute that their providers belonged to the PPO networks identified on the [explanations of reimbursement] or that their providers agreed to accept the PPO rates on the [explanations of reimbursement]."

However, USAA said there is "no evidence" that Jennings and Harder were balance billed for the difference between their providers' charged rates and the "agreed-upon PPO rates," and in turn, USAA maintained, the plaintiffs "cannot show any legally cognizable injury."

According to court filings, Jennings and Harder first sued USAA in state court in November 2023, and USAA removed the case to federal court the next month. The plaintiffs said that after they suffered injuries from automobile accidents in 2017 and 2018, USAA did not sufficiently reimburse their medical bills. They alleged that the insurer "systematically" rejects and underpays claims through software created by Auto Injury Solutions, which uses a "medical bill audit" process.

"Each year, defendants receive a staggering volume of medical billing information submitted for reimbursement," USAA said Thursday, saying they use the medical bill audit in turn to "evaluate whether any particular bill is reimbursable."

Each plaintiff had policies providing personal injury protection benefits of $10,000, their motion further states, with Jennings being reimbursed for roughly $9,000 and Harder for $6,000.

The plaintiffs specifically asserted claims for breach of contract and breach of covenant of good faith and fair dealing, with Harder asserting an additional claim under the Washington Consumer Protection Act.

The plaintiffs focused their claims on six separate reason codes. In addition to the PPO code, they said other codes included a "PR" code relating to physicians "engaged by AIS" who examined bills to determine if an insured's care was medically appropriate, a "DOC" code if certain documents weren't attached and codes for injuries and diagnoses resulting from an auto accident.

"The physician conducts only a cursory, hollow review of the provider notes and related documents contained in the AIS database and does not communicate with either the insured or the insured's provider," the plaintiffs further argued.

In its summary judgment motion, USAA further countered that plaintiffs' medical providers didn't "protest or appeal" the PR reimbursement decisions and that the plaintiffs haven't presented evidence that charges not reimbursed were medically necessary or related to their auto accidents.

With respect to Harder's Consumer Protection Act claim, only one DOC code applied to Harder's bills within the law's four-year statute of limitations, USAA continued.

"And the bill line to which that DOC reason code originally was applied was subsequently reimbursed (before suit was filed) at her provider's agreed-upon PPO rate," USAA added.

Thursday's motion for summary judgment comes before the plaintiffs have sought class certification, court records show. Their proposed class includes all persons who sought injury benefits under a Washington USAA policy who had their medical reimbursements reduced or denied via the six reason codes the plaintiffs identified, subject to the applicable statute of limitations.

In its notice of removal to federal court, the insurer said that because there is a six-year statute of limitations for breach of contract claims in Washington, "the class period for purposes of this notice of removal is November 16, 2017 through November 16, 2023."

Representatives of the parties did not immediately respond to a request for comment.

Jennings and Harder are represented by Jason T. Dennett, Cecily C. Jordan and Joan M. Pradhan of Tousley Brain Stephens PLLC and by Franklin D. Azar, Michael D. Murphy, Timothy L. Foster and Dezarae LaCrue of Franklin D. Azar & Associates PC.

USAA is represented by Kimberly A. Reppart of Forsberg & Umlauf PS and by Jay Williams, Paula Ketcham, Robert Boley, Devin Ross and Sarah Oligmueller of ArentFox Schiff LLP.

The case is Caryn Jennings et al. v. USAA Casualty Insurance Co. et al., case number 3:23-cv-06171, in the U.S. District Court for the Western District of Washington.