The Michigan Court of Appeals has strengthened medical service providers’ rights under the Michigan No-Fault Act. On October 22, 2015, the court published a recent decision which upheld Covenant Medical Center’s claim against State Farm. Specifically, Covenant had notified State Farm of its billings and its claim for payment. Unbeknownst to Covenant, State Farm then negotiated a settlement with the patient. When Covenant filed its lawsuit to collect, State Farm attempted to avoid liability because the insured patient had released State Farm from any liability. In rejecting State Farm’s disingenuous ploy to avoid liability, the court relied upon the plain language of the no-fault statute, section 3112, which makes plainly clear that when the insurer has written “notice of the claim of some other person”, the insurer’s liability is not extinguished. Critical to the court’s holding and application of the statute was the fact that Covenant’s written notice preceded State Farm’s settlement with its insured. The case is titled Covenant Medical Center v State Farm and can be found here. For more information about this case and how it can either help or harm medical service providers, please contact us for a free consultation, in that regard.
Authored by L. Page Graves