By Ben Solis
Gongwer News Service
A Department of Insurance and Financial Services decision requiring insurers to reimburse hospitals and physicians under the no-fault auto insurance reform fee schedule created in 2019 was struck down recently by a Court of Claims judge.
In an order issued Friday for Auto-Owners Insurance Company v. DIFS (COC Docket No. 24-000152), Judge Christopher Yates ruled that the department incorrectly interpreted the Michigan Supreme Court's Andary v. USAA decision.
The order came after oral arguments in the matter on a motion for summary disposition and injunctive relief. Yates granted the motion for summary disposition filed by the plaintiff insurance companies and ruled the insurers were entitled to declaratory relief. The motion for injunctive relief was denied but Yates opened the door for the plaintiffs to submit a proposed declaratory relief judgment draft under the court's seven-day rule.
Although the order is sparse on details, Yates ruled from the bench that DIFS's conclusions were wrong when it said Andary did not apply to all of the fee schedule reductions that were forged from the Legislature's 2019 overhaul of the no-fault law. Yates found that the analysis and rationale on the high court in Andary was clear and that none of the fee schedule limitations in the 2019 changes could be applied retroactively to claims of people injured before the law changes.
DIFS attempts to limit Andary to only the two provisions at issue in the case were therefore unfounded, Yates ruled.
The lawsuit argued DIFS's position that amendments to the No-Fault Act enacted on June 11, 2019, to the personal injury protection benefits be applied to individuals who were injured before that date runs contrary to other court precedents, mainly the Andary decision.
Andary mainly involved two key fee-schedule issues: caps on attendant care provided by family or friends and a 55 percent cap on certain rehabilitation services provided by catastrophic care clinics.
There are several other fee schedule factors in the law, including reimbursement rates for hospitals and physicians.
The insurance companies argued that they would face enforcement actions from DIFS if they refuse to apply the other portions of the fee schedule to those injured prior to June 2019. However, if they enforce those provisions, they would then be subject to litigation from claimants and providers who seek additional benefits, the insurance companies argued in the suit.
The DIFS bulletin in question was said to have created considerable confusion among insurers who had correctly interpreted Andary as prohibiting retroactive application of any benefit reductions contained in statute.
DIFS threatened legal action if companies refused to retroactively apply benefit reductions contained in the law, and the lawsuit at hand followed (See Gongwer Michigan Report, September 25, 2024).
The companies indicated their intention to sue over the fee schedule interpretation in mid-2024 (See Gongwer Michigan Report, June 11, 2024).
Yates ultimately disagreed with DIFS's reading of the law.
The Coalition Protecting Auto No-Fault called the decision a big win for thousands of crash survivors.
"It is perplexing and indeed troubling why DIFS would attempt to dilute the protections of the Andary case for that large population of patients," CPAN President Tim Hoste said in a statement. "DIFS has proven time and again that they care more about insurance company profits than the consumers they are supposed to protect. Fortunately, DIFS's efforts were soundly rejected by the Court of Claims, and as a result, some of the stability created by the Supreme Court's decision in Andary has been restored. That is a big relief for thousands of catastrophically injured accident victims throughout Michigan."
The Michigan Brain Injury Provider Council called the ruling another example of insurance chaos in Michigan created by the new law.
"In an odd twist, it was the insurance companies complaining about the interpretation and guidance of DIFS, further cementing the failed legacy of the 2019 law," said Tom Judd, executive direct of MBIPC, in a statement. "Chaos will surely continue in the court system as uncertainty remains for many issues stemming from the ramifications of the reform law, but two things remain unchanged – the law has done nothing to reduce insurance rates, and it has emboldened the delay and deny tactics of auto insurance companies, resulting in a crisis in care for catastrophically injured drivers."
Judd went on to say that "ending both this chaos and the crisis in care can only come through legislative action."
"MBIPC is optimistic that there are enough lawmakers that want to work in a bipartisan way to end this sad chapter in our state's history by passing reasonable solutions ensuring people have access to the benefits they are paying for," Judd said. "If DIFS is truly interested in being 'committed to ensuring continuity of care for those injured in auto accidents' as Director Anita Fox stated, then they should be part of solution development rather than continuing their recent history of opposing any changes to the 2019 law."
Gongwer News Service
A Department of Insurance and Financial Services decision requiring insurers to reimburse hospitals and physicians under the no-fault auto insurance reform fee schedule created in 2019 was struck down recently by a Court of Claims judge.
In an order issued Friday for Auto-Owners Insurance Company v. DIFS (COC Docket No. 24-000152), Judge Christopher Yates ruled that the department incorrectly interpreted the Michigan Supreme Court's Andary v. USAA decision.
The order came after oral arguments in the matter on a motion for summary disposition and injunctive relief. Yates granted the motion for summary disposition filed by the plaintiff insurance companies and ruled the insurers were entitled to declaratory relief. The motion for injunctive relief was denied but Yates opened the door for the plaintiffs to submit a proposed declaratory relief judgment draft under the court's seven-day rule.
Although the order is sparse on details, Yates ruled from the bench that DIFS's conclusions were wrong when it said Andary did not apply to all of the fee schedule reductions that were forged from the Legislature's 2019 overhaul of the no-fault law. Yates found that the analysis and rationale on the high court in Andary was clear and that none of the fee schedule limitations in the 2019 changes could be applied retroactively to claims of people injured before the law changes.
DIFS attempts to limit Andary to only the two provisions at issue in the case were therefore unfounded, Yates ruled.
The lawsuit argued DIFS's position that amendments to the No-Fault Act enacted on June 11, 2019, to the personal injury protection benefits be applied to individuals who were injured before that date runs contrary to other court precedents, mainly the Andary decision.
Andary mainly involved two key fee-schedule issues: caps on attendant care provided by family or friends and a 55 percent cap on certain rehabilitation services provided by catastrophic care clinics.
There are several other fee schedule factors in the law, including reimbursement rates for hospitals and physicians.
The insurance companies argued that they would face enforcement actions from DIFS if they refuse to apply the other portions of the fee schedule to those injured prior to June 2019. However, if they enforce those provisions, they would then be subject to litigation from claimants and providers who seek additional benefits, the insurance companies argued in the suit.
The DIFS bulletin in question was said to have created considerable confusion among insurers who had correctly interpreted Andary as prohibiting retroactive application of any benefit reductions contained in statute.
DIFS threatened legal action if companies refused to retroactively apply benefit reductions contained in the law, and the lawsuit at hand followed (See Gongwer Michigan Report, September 25, 2024).
The companies indicated their intention to sue over the fee schedule interpretation in mid-2024 (See Gongwer Michigan Report, June 11, 2024).
Yates ultimately disagreed with DIFS's reading of the law.
The Coalition Protecting Auto No-Fault called the decision a big win for thousands of crash survivors.
"It is perplexing and indeed troubling why DIFS would attempt to dilute the protections of the Andary case for that large population of patients," CPAN President Tim Hoste said in a statement. "DIFS has proven time and again that they care more about insurance company profits than the consumers they are supposed to protect. Fortunately, DIFS's efforts were soundly rejected by the Court of Claims, and as a result, some of the stability created by the Supreme Court's decision in Andary has been restored. That is a big relief for thousands of catastrophically injured accident victims throughout Michigan."
The Michigan Brain Injury Provider Council called the ruling another example of insurance chaos in Michigan created by the new law.
"In an odd twist, it was the insurance companies complaining about the interpretation and guidance of DIFS, further cementing the failed legacy of the 2019 law," said Tom Judd, executive direct of MBIPC, in a statement. "Chaos will surely continue in the court system as uncertainty remains for many issues stemming from the ramifications of the reform law, but two things remain unchanged – the law has done nothing to reduce insurance rates, and it has emboldened the delay and deny tactics of auto insurance companies, resulting in a crisis in care for catastrophically injured drivers."
Judd went on to say that "ending both this chaos and the crisis in care can only come through legislative action."
"MBIPC is optimistic that there are enough lawmakers that want to work in a bipartisan way to end this sad chapter in our state's history by passing reasonable solutions ensuring people have access to the benefits they are paying for," Judd said. "If DIFS is truly interested in being 'committed to ensuring continuity of care for those injured in auto accidents' as Director Anita Fox stated, then they should be part of solution development rather than continuing their recent history of opposing any changes to the 2019 law."
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