Home Civil Law No-Fault Reimbursement Rates Pulled Out Of Thin Air | Michigan Auto Law

No-Fault Reimbursement Rates Pulled Out Of Thin Air | Michigan Auto Law


The new fee schedule consists of everlasting reductions in No-Fault reimbursement charges for medical suppliers who take care of automotive accident victims and takes impact on July 1, 2021. The drawback is these charge schedule reimbursement charges are fully arbitrary. Lawmakers actually pulled them out of skinny air and we anticipate they are going to trigger vital havoc and disruption.

The drawback with these new and fully arbitrary No-Fault reimbursement charges is that it’ll trigger Michigan automotive accident harm victims to be be disadvantaged of entry to important medical care. The nature of the charge schedule means it should really hit probably the most severely injured automotive accident victims the toughest as a result of it will likely be the rehabilitation services for spinal twine harm and TBI survivors and residential and residential care services that shall be most affected as these medical suppliers shall be pressured to slash their charges by 45% – although the providers and remedy for these catastrophic accidents might want to stay on the identical stage. Many of those medical rehabilitation services shall be pushed out of enterprise or pressured to make substantial cutbacks to high quality of care, entry to care, and staffing as this new arbitrary 45% discount in No-Fault reimbursement charges slashes their potential to supply providers practically in half.

The 112-page invoice proposing the plan for everlasting reductions in No-Fault reimbursement charges that may finally be signed into regulation appeared out of skinny air. It was launched for the primary time earlier than the complete House by Rep. Roger Hauck (R-Union Township) on Friday, May 24, 2019 – instantly after the House had rejected the plan that had been handed by the Senate and had been really useful for passage by the House Select Committee on Reducing Car Insurance Rates.

Without holding any public hearings or ready for legislative analyses from the House and/or Senate Fiscal companies, the complete House handed Rep. Hauck’s new invoice and despatched it to the Senate – the identical day.

In roughly 30 minutes time, late within the afternoon on Friday, May 24th, the Senate handed Rep. Hauck’s invoice – even supposing the senators had by no means beforehand seen the 112-page invoice and the truth that Rep. Hauck’s plan for decreasing No-Fault reimbursement charges was vastly totally different from the one the Senate had accepted two weeks earlier.

Six days later, on March 30, 2019, in a extremely publicized, media-heavy ceremony on the Mackinac Policy Conference on Mackinac Island, Gov. Whitmer signed Rep. Hauck’s invoice into regulation.

No surprise lobbyists for the insurance coverage corporations in Michigany have been extensively ureportedly to be celebrating and having drinks that evening! The boondoggle of all boondoggles was simply jammed into the brand new auto No-Fault regulation laws.

There’s just one manner proper now to repair this colossal mistake. Lawmakers must take up and move the legislative repair proposed in House Bill 4486 and Senate Bill 314.

As of this writing, there isn’t any indication that this may occur.

Limitations on No-Fault reimbursement charges

Under the No-Fault reform charge schedule that takes impact on July 1, 2021, the No-Fault reimbursement charges for the medical suppliers who deal with and take care of automotive accident harm victims – however whose providers will not be coated by Medicare – shall be lowered to 55% of what they charged on January 1, 2019. (MCL 500.3157(7)(a))

After July 1, 2023, the share drops to 52.5% forever.

Providers that fall into this class embrace rehabilitation services that deal with spinal twine harm survivors and traumatic mind harm survivors, services that present residential care, companies that present residence well being care and attendant care suppliers.

Medical suppliers whose remedy and coaching for automotive accident victims is roofed by Medicare shall be topic to reductions of their No-Fault reimbursement charges which might be calculated as a share of the quantity payable under Medicare. (MCL 500.3157(2), (3), (6) and (7))

After July 1, 2023, a decrease, everlasting share takes impact.

Why are we slashing No-Fault reimbursement charges by 45%?

I’ve been an lawyer specializing in auto No-Fault regulation in Michigan for practically 30 years, and that I can emphatically state there was merely no motive to slash by 45% the No-Fault reimbursement charges for probably the most vital rehabilitation services that deal with and take care of our most severely injured automotive accident victims.

It needs to be famous that in all the controversy and deliberations over No-Fault reform in 2019, there was no proof – no reviews and no research that have been ever revealed or ever offered that confirmed that these important medical suppliers who take care of catastrophic mind harm and spinal twine harm accident victims have been overcharging or price-gouging. Zero proof. Not one little bit of testament, nothing. But on account of this new regulation, No-Fault reimbursement charges for all medical suppliers who supplied providers not coated by Medicare will now have their charges minimize practically in half beginning on July 1, 2021.

In distinction to those vital care medical suppliers in Michigan, there have been reviews and testament earlier than committee hearings about how some medical suppliers charged significantly extra for surgical procedures, MRIs, CT scans and ER visits when the invoice was being paid by No-Fault auto insurance coverage versus Medicare (or Worker’s Compensation). For instance, the Citizen Research Council’s analysis confirmed that: (1) the cost for a neck CT scan in Detroit was $1,820.09 when No-Fault was paying and $261.50 when Medicare was paying; (2) the cost for a shoulder surgical procedure in Grand Rapids was $3,041.06 when No-Fault was paying and $654.87 when Medicare was paying; and (3) the cost for a low again MRI in Lansing was $2,057.55 when No-Fault was paying and $452.56 when Medicare was paying.

Yet, regardless of the obtrusive lack of proof of wrongdoing, lawmakers arbitrarily and unwarrantedly handed a charge schedule that would scale back No-Fault reimbursement charges by 45% for medical suppliers with no historical past of overcharging or price-gouging and whose remedy, rehabilitation and providers are important to automotive accident sufferer’s potential to recuperate, heal and survive.

Slashing No-Fault reimbursement charges threatens important entry to medical care

Slashing No-Fault reimbursement charges will go away automotive accident victims with much less shopping for energy to pay for the medical care and remedy they should heal and survive, which implies they could need to forgo important surgical procedures, diagnostics, rehabilitation and attendant care until they will pay out of pocket for the portion of their suppliers’ expenses which might be not coated by No-Fault.

Slashing No-Fault reimbursement charges can also pressure medical suppliers to exit of enterprise, leaving automotive accident victims actually with nowhere to show, even when they will discover the cash to pay for his or her care.

The Michigan Brain Injury Provider Council has estimated that this slashing of No-Fault reimbursement charges under the brand new No-Fault charge schedule might deprive as many as 6,000 severely injured automotive accidents of important medical care and remedy.

In simply the final week, print and TV information has reported that many suppliers are already planning to shut their doorways or drastically limit the providers they provide by the tip of June: (1) Hope Network TBI rehab services gained through a win’t have the ability to take sufferers at 55% of charges (Crain’s); (2) 1st Call Home Healthcare (supplier of attendant care) closes 6/30 (Crain’s); (3) Health Partners Homecare (residence well being company) closing (Crain’s); (4) Centria Home Rehab will stop catastrophic harm care by 6/30 (Letter); (5) Aspire Rehabilitation Services (which incorporates residential care) closes 6/30 (Fox 47); and (6) Origami Brain Injury Rehabilitation will restrict providers to “less serious catastrophic injuries” (Detroit News)

Rep. Hauck’s invoice with everlasting reductions appeared actually out of skinny air

We could by no means know why everlasting reductions in No-Fault reimbursement charges have been arbitrarily and punitively imposed on the medical suppliers who take care of and deal with spinal twine harm and traumatic mind harm survivors and automotive accident victims requiring 24/7 attendant and medical care.

But we do know the way it occurred.

It occurred as a result of Rep. Roger Hauck (R-Union Township) pulled a brand new 112-page invoice seemingly out of skinny air proper earlier than the eyes of the complete House of Representatives.

To perceive how this occurred – and what occurred afterward – you will need to begin firstly:

  • The regulation that we now know as No-Fault Reform 2019 began off as Senate Bill 1, which was launched on January 15, 2019. It referred to as for the creation of a No-Fault medical charge schedule to impose reductions on medical suppliers’ No-Fault reimbursement charges, however SB 1 supplied no specifics.
  • After as many as eight hearings on No-Fault reform, the Senate Insurance and Banking Committee accepted a substitute invoice containing a Worker’s Comp-based charge schedule on May 7, 2019. That identical day, the complete Senate handed the 80-page S-1 substitute which stated that medical suppliers who deal with/rehab automotive accident victims are “not eligible for payment or reimbursement under this chapter of more than”: (1) the “amount payable for the treatment, training, product, service, or accommodation” under the Worker’s Comp charge schedule; or (2) for care or remedy not coated by Worker’s Comp “the average amount accepted by the person as payment or reimbursement in full for the treatment, training, product, service, or accommodation during the preceding calendar year in cases that do not involve” No-Fault auto insurance coverage.
  • The invoice was despatched to the House of Representatives what place on May 16, 2019, the House Select Committee on Reducing Car Insurance Rates adopted and really useful that the complete House move an 85-page H-1 substitute which contained the identical Worker’s Compensation-based charge schedule for decreasing No-Fault reimbursement charges as was contained within the Senate’s S-1.
  • On Friday, May 24, 2019, the complete House rejected the H-1 model of the invoice that had been accepted and really useful by the House Select Committee on Reducing Car Insurance Rates.
  • But the complete House did take up and vote on Rep. Roger Hauck’s new 112-page invoice on May 24th. Unlike the Worker’s Comp-based charge schedule within the payments handed by the Senate and accepted by the House Committee, Rep. Hauck’s new invoice proposed a Medicare-based charge schedule. It additionally proposed that No-Fault reimbursement charges be slashed by 45% – quite than averaged – for suppliers whose remedy and care shouldn’t be coated by Medicare.
  • As its final matter of enterprise for the day on May 24th, the House handed Rep. Hauck’s invoice and despatched it to the Senate earlier than adjourning at 4:10pm.
  • At 4:44pm that very same Friday, May 24th, the complete Senate was referred to as to order and took up Rep. Hauck’s invoice that had been handed by the complete House. After suspending the rule that the “bill be laid over one day,” the complete Senate handed Rep. Hauck’s invoice with out modification. The entire course of took roughly 30 minutes. The Senate adjourned at 5:14pm.
  • Six days in a while May 30, 2019, at a lavish ceremony on the Mackinac Policy Conference on Mackinac Island, Gov. Whitmer signed into regulation Rep. Hauck’s invoice and his Medicare-based charge schedule for the discount of medical suppliers’ No-Fault reimbursement charges.

Incomplete info led to discount of reimbursement charges under No-Fault charge schedule

The auto insurance coverage business made a vocal and loud case for No-Fault reform based mostly on discrepancies in medical prices relying on whether or not No-Fault or Medicare was paying. What was by no means mentioned, nonetheless, was how insurers’ delaying and stonewalling ways left suppliers with no selection however to cost extra.

Few have described this phenomenon so well – and so compellingly – because the late Oakland County Executive L. Brooks Patterson. In an “Open Letter” revealed in 2013 – when the Legislature was within the midst of deliberating over a earlier No-Fault reform invoice – Mr. Patterson acknowledged the next:

  • “Auto insurance providers also claim that they pay more for medical services than other providers such as Blue Cross and Medicare and further claim that they should pay the same rate. Some simple facts are that Blue Cross and Medicaid represent a larger scale of business to the medical industry than auto insurance. Also, Blue Cross and Medicare provide pre-approval for medical services, allow for electronic medical billing and provide payment within several days by direct deposit. This gives the medical providers’ confidence that they will be paid in a timely manner and reduces the cost of doing business.”
  • “By comparison, auto insurance companies do not provide preapproval for medical services, do not allow for electronic medical billing and often refuse to pay their bills and/or force the medical provider to retain legal representation in order to get their invoices paid. This causes great uncertainty by the medical providers that they will be paid at all for legitimate medical services that have already been rendered and increases the cost of doing business.”
  • “This topic is analogous to people with different credit scores wanting the same interest rate from a bank. Blue Cross and Medicare have the equivalent of a great credit score and auto insurance has the equivalent of a poor or low credit score. It’s unrealistic to think that these different entities could (or should) qualify for the same rate when one has a history of paying their bills promptly and the other has a reputation for slow payment at best and no payment without legal intervention in many well documented cases.”

Have a query? Call the automotive accident attorneys at Michigan Auto Law

If you might have been severely injured in a automotive crash and have questions on how the Michigan No-Fault medical charge schedule could scale back your care and remedy choices, you’ll be able to call toll free anytime 24/7 at (800) 777-0028 for a free one on one with considered one of our skilled auto No-Fault attorneys. You may also get assist from an skilled lawyer by emailing [email protected] or you need to use the chat function on our web site.


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