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The “New” Michigan Assigned Claims Plan for No-fault Benefits

In 2012, the Michigan Legislature passed and Gov. Snyder signed into law, a new Michigan Assigned Claims Plan for No-fault Benefits. The new law modifies the administration of the Michigan Assigned Claims Plan. Formerly, the plan was administered by and through the Secretary of State. Now, under the new law, it is administered through the Michigan Automobile Insurance Placement Facility. The administrative transfer became effective on December 17, 2012. From this day forward, all potential MACP claims shall be submitted to the new MAIPF. You can read more about the MAIPF here. And the Application for No-Fault Benefits under the plan can be found here (and also can be found on the website). For more questions or information regarding the new MAIPF, please contact us directly.

Authored by L. Page Graves

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No-Fault Insurance Medical Service Providers Beware

No-fault insurance medical service providers must be aware and cautious of the status of a patient’s no-fault PIP claim. Particularly, if the patient has filed a lawsuit and the medical provider has elected not to intervene or file its own, joint action. That is because if the patient ultimately settles his/her PIP claim for future care and signs a release, that will forever bar the medical service provider from claiming payment for services for future care. That is exactly what happened to a medical provider who attempted to collect unpaid charges after the patient released future PIP benefits, in Michigan Head & Spine Institute, P.C., v. State Farm Mut Auto Ins Co, ___ Mich ___ (2013), released on February 12, 2013. See opinion here.

Authored by L. Page Graves

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IMPORTANT NO-FAULT UPDATE FOR MEDICAL SERVICE PROVIDERS AND MVA VICTIMS WHO ARE MINORS AND/OR SUSTAIN TRAUMATIC BRAIN INJURY

Yesterday, the Michigan Supreme Court did away with the long-held rule of protecting minors and the infirm in no-fault claims.   This legal issue has literally been a political ping-pong match with the balance of the court changing so much since 1999.   Since 1973 — when the no-fault act was enacted — it had always been the rule to protect this class of persons.

In 2006, however, AAA of Michigan got its request granted when the new court created a new rule that no longer protected minors and the infirm.  This directly impacted medical providers because their unpaid claims approaching one year were now at risk.  If not paid or a lawsuit filed, those unpaid claims became barred under no-fault.  Resorting to Medicare or Medicaid or writing off as bad debt were the only remaining options.

The old no-fault law protecting this class of persons was restored in 2010 when the U of M Hospital challenged the new rule.  But now the political ping pong has been hit back in Joseph v ACIA .  Once again, children, the infirm and their medical service providers must adhere to the one-year-back-rule for no-fault claims.

Authored by L. Page Graves

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A health system’s actual procurement costs for surgical implants is subject to disclosure for payment consideration by auto no-fault insurers.

Patients of Bronson Methodist Hospital, in Kalamazoo, Michigan, were involved in motor vehicle accidents and sustained traumatic, orthopedic injuries requiring surgical implants.  Pursuant to the no-fault act (MCL 500.3107(1)(a)), Bronson submitted its charges incurred by the patients to the liable no-fault auto insurer (Auto-Owners Insurance Company) for payment.  The no-fault insurer paid the health system’s charges except for the line item for the implants.  For payment consideration and pursuant to a different section of the no-fault act (MCL 500.3157 and MCL 500.3158), Auto-Owners requested that Bronson disclose its actual cost to acquire the implants.  Bronson refused to disclose this proprietary information.  Consequently, Auto-Owners refused to timely issue payment for the full amount of the implant charges submitted.  Bronson filed suit to compel payment of the charges incurred by the patients for the implants.

During the course of the litigation, Auto-Owners (relying on CorVel Corporation, its retained audit/review company’s recommendation) issued payment for what it maintained was in line with what the health system actually paid for the implants, plus a 50% mark-up.  At the trial court, Bronson requested the court to rule that it was not obligated to disclose its proprietary information and that it was entitled to be paid the full charge incurred by the patient.  The trial court agreed.  Auto Owners, therefore, appealed the decision.

In a Published Opinion dated February 16, 2012, the Michigan Court of Appeals reversed the trial court and held that a health system’s actual procurement costs for surgical implants is subject to disclosure for payment consideration by auto no-fault insurers.  The court, however, limited the application of its newly announced rule solely to “durable medical supply products at issue here.”

What this means for patients and providers.

First, the Bronson case is binding law now in Michigan.  It will remain so unless and until our Michigan Supreme Court says otherwise.  An appeal to the Michigan Supreme Court is discretionary and not guaranteed because the Supreme Court may decline Bronson’s request which effectively means it agrees with the current rule.  Bronson has 42 days to preserve a timely application to appeal the decision.  MCR 7.302(C)(2).  At this time, no application has been filed yet.  You can track the appellate history of this case here.

Second, as you see in this case, Bronson did not disclose the amount of its hard costs and yet, it still was paid a portion of its bill.  For health systems, generally, that will be the likely outcome going forward when a health system decides to continue its internal policy to withhold the proprietary data.  If the hospital decides to pursue the balance bill in litigation, however, then the data will be subject to disclosure.

Finally, in deciding whether to initiate that balance bill case, health systems must be able to demonstrate with other evidence that there is more to the overall cost to delivering an implant to a patient besides its raw, wholesale cost.  What about the costs to store/maintain its purity from contamination before actual use?  What about insurance costs to protect against its loss from contamination or fire before use?  This list of added over-head to the delivery of the implant  is incomplete but it is intended to help illustrate how health systems should begin analyzing and developing their case response.  Recognize, too, that a built-in profit is o.k..  A jury gets that.  It also understands over-head.  So, what is the total over-head to deliver the implant?  That answer is what will justify a health system’s cost-to-charge ratio.

You can read the Published Court of Appeals opinion here.

Authored by L. Page Graves

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A Camping Trailer No Longer Qualifies for No-Fault Insurance Coverage Once It Is Parked At The Camp-Site And Is Being Used As Accommodations

A family towed their camping trailer and set it up at their designated camp site.   After the camper was set up, one of the family members entered it to retrieve her glasses for reading.  While exiting the camper, she slipped on the steps and suffered bodily injury requiring medical care.  She applied for no-fault benefits under the no-fault law allowing coverage for no-fault benefits when one is injured while entering or exiting a parked motor vehicle.  MCL 500.3016(1)(c).  Her auto insurer denied her claim.  The Michigan Court of Appeals held that no-fault insurance did not apply reasoning that once the trailer was set up at the camp site, it no longer met the no-fault act’s definition of “trailer” (MCL 500.3101) and was not being used in its intended, transportational function.  Instead, it had converted into an accommodation and therefore, lost its nexus to being a motor vehicle under the act.  MCL 500.3105(1).

What this means for injured persons and medical providers:

This case is important to Michiganders and medical providers because of our proud heritage of recreating and enjoyment of our natural resources.  Camping is inherently part of our proud history.  Thus, this case importantly illustrates when a camping trailer loses its transportational function as a motor vehicle and becomes a stationary object not related to transportation.   And as a consequence, when no-fault insurance ceases to apply when injuries occur while using the camper as a camper.  In this instance, an injured person’s other health or accident medical coverage becomes primary.

(NOTE:  This case does not address the factual scenario of suffering bodily injury while setting up or breaking down the camper at the camp site.  More than likely, that type of fact setting would trigger no-fault liability because the camper is still in its/or is returning to its motor vehicle status.).

You can read this Opinion here.

Authored by L. Page Graves

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The battle to save Northern Michigan jobs and to preserve Michigan’s Auto No-fault Insurance resumes in 2012

In the 1992 and 1994 Michigan statewide elections, many remember the no-fault insurance industry’s ballot initiatives (Proposals C and D) which sought to dramatically convert Michigan’s auto no-fault insurance system into managed care funded by tax payers.  These efforst were resoundingly defeated by the people of Michigan.  See the Official election results here.

After 17 years of dormancy, the no-fault insurance industry viewed Michigan’s current political landscape and climate ripe again to institute its wish list to keep more premium dollars while shifting the burden of paying for accident victims’ medical care to the taxpayers, i.e., the state and federal treasury (Medicaid and Medicare).  Instead of asking and involving the people of Michigan directly at the ballot booth, the no-fault industry has used its political influence to package its desired goals into Michigan House Bill 4936.

For a thorough summary and analysis of the bill’s current devastating impact on patient and provider rights and our local economy, see Part 1, Part 2, Part 3, by Tim Smith, of Smith & Johnson, Attorneys, P.C.

To understand the real life impact that our current no-fault system provides for and how it would drastically change, meet and listen to Katie’s and Katlin’s stories about how our no-fault system has changed their lives for the better.

Fortunately for now, HB 4936 has stalled thanks primarily to the efforts of the Michigan Health & Hospital Association and the Brain Injury Association of Michigan who have educated Michigan legislators about this important issue.  Locally, Munson Medical Center has similarly contributed to educating the public and northern Michigan legislators (Senator Howard Walker and Representative Wayne Schmidt) too, on how changes in the bill will impact both injured persons and the local economy.

The battle is not over, however.  The effort to pass HB 4936 will begin again with the opening of the 2012 Michigan legislative session.  That is why your voice needs to be heard.   To assist you, Munson Medical Center has further created a sample letter for you to adopt and send to your local legislator here.  Make a difference and be heard: save people and save Northern Michigan jobs.

Authored by L. Page Graves

 

 

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Opening a tailgate to a motor vehicle trailer triggers no-fault insurance coverage

Facts & Ruling By Court:

A man was hauling waste to a landfill using his attached trailer.  The tailgate would not open freely.  The man pushed on the tailgate and it sprung open, causing him to lose his balance.  He fell down into the landfill and suffered bodily injury requiring medical care.  The no-fault act provides coverage for instances when your car is parked and your injury was a direct result of physical contact with equipment permanently mounted on the vehicle.  MCL 500.3106(1)(b).  The man’s auto no-fault insurer refused to pay his medical expenses because it believed that the stated rule did not apply arguing that the tailgate did not constitute “equipment” mounted on a vehicle as contemplated by the statute.  (Note that the no-fault act includes in its definition of a “motor vehicle”, “a trailer” [MCL 500.3101(2)(e)]).  The Court of Appeals disagreed with the defendant no-fault insurer and ruled in favor of the injured person, holding that that the tailgate did constitute “equipment” under the law.  Left unanswered, the Court said that a jury must now decide whether the man’s injury suffered had a causal relationship to his opening of the tailgate “that is more than just incidental.”

What this means for injured persons and medical service providers:

First, in bodily injury scenarios factually similar to this case involving the opening of equipment mounted on a vehicle, submit your claim for payment for medical expenses to your no-fault insurer.

Second, the court’s decision illustrates that factual questions about the cause of an injury are not decided arbitrarily by a person’s no-fault insurance company or the court.  Instead, such questions must be decided by fair-minded and unbiased jurors of your peers.  Therefore, do not be deterred by a blanket denial by an auto insurer; instead, rightfully challenge its denial.

You can read this Opinion here.

Authored by L. Page Graves

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Michigan’s highest court decides a medical service provider’s defense against an attorney’s fee lien in a no-fault PIP recovery, leaving unanswered several procedural questions.

Facts & Ruling by Court:

A man was catastrophically injured in a car accident and was taken to the Detroit Medical Center for care.  The patient’s medical expenses were covered by the No-Fault law.  Before the patient was discharged and before the DMC issued an itemization of charges to the patient’s no-fault insurer, the patient’s lawyer claimed an attorney’s charging  lien (MCL 500.3148) against the charges incurred arguing that he facilitated in procuring coverage and payment.   The DMC refused to honor the lien arguing, in part, that there was no attorney-client relationship between it and the patient’s attorney.  The Michigan Supreme Court ruled that the DMC was not liable to pay the patient’s attorney fee.  That said, the Court was silent about whether the attorney fee lien was validly asserted against the DMC’s charges recovered; ducking to answer this pressing question, the Court instead held that the DMC could pursue the balance of its charges directly against the patient.

What this case means for injured persons and medical service providers:

  1. It reaffirms medical provider’s longstanding position that the relationship between the patient and provider is one of creditor (provider) and debtor (patient).  Thus, regrettably, it seemingly pits providers against patients instead of the liable auto no-fault insurance company.
  2. The Court held that no common fund was created which seemingly overrules Aetna Cas & Surety Co , 116 Mich App 630 (1982), which has the effect of undercutting the entire basis that attorneys have relied upon in enforcing a lien against the funds recovered.
  3. Regarding an attorney-client relationship between an attorney and a provider, the Court does say that there must be some kind of explicit waiver or “unequivocal acquiescence.”  This will like spur more litigation.  At worst, however, medical providers can argue that it reaffirms the meaning of ethics opinion C-226.  On that note, it is incumbent that medical providers be proactive when there is attorney contact: send the form letter making clear that there is no attorney-client relationship and they are not authorized to pursue the provider’s charges.
  4. The ultimate quandary this Order creates is how does the medical provider now collect its bill that the attorney has retained?  The Order does not contain any remand language on procedure.  These important procedural questions remain unanswered.

Your can read the Supreme Court Opinion here.  Your can read the Court of Appeals Opinion, that led to this decision by the Supreme Court, here.

Authored by L. Page Graves

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Auto no-fault insurance no longer applies to process of closing your car door

Facts & Ruling by Court:

An adult was placing personal items into her motor vehicle which was parked.  She had reached into the passenger side of the vehicle with its door open.  In one fluid motion, she stood back up to regain her upright balance and stepped away from the car while also shutting the door with her hand.  It was at this point that she slipped and fell on a patch of ice beneath her feet and suffered bodily injury requiring medical care.  The no-fault law provides coverage when a person is “entering” or “alighting” from a parked motor vehicle [MCL 500.3106(1)(c)].  The Michigan Supreme Court ruled that the injured person was not “alighting” from her motor vehicle because, it reasoned, she was in no way reliant upon the vehicle itself to maintain her balance.  The Court said she had already alighted and that closing a car door is not part of the alighting process.

 

What this means for injured persons:

 

This is new law created by the Court.  Closing the door used to be considered a part of the alighting process since the no-fault act was enacted in 1973.  Now it is not.  Therefore, in fact patterns identical to this case, injured persons are no longer covered by their auto no-fault insurance which they must purchase as mandated by law.  Instead, coverage for their medical care falls to any other accident or health coverage applicable (e.g., BC/BSM, Medicare, Medicaid, etc.) or private pay.

 

What this means for Medical Service Providers:

 

In fact patterns identical to this case, medical providers can no longer pursue auto no-fault coverage in cases just like this.  Instead, they must submit their claims to the patient’s applicable health coverage.

 

You can read this Opinion here.

 Authored by L. Page Graves

 

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