Auto No-Fault Medical Provider Changes Under New Car Insurance Law

doctor with arms crossed in white coat and stethoscope

Recently, Grand Rapids auto accident lawyer, Tom Sinas, was invited in for an interview with WKTV Journal In Focus to discuss a few of the impacts of the 2019 auto no-fault reform, including no-fault medical provider changes. Tom notes that the reform was the largest and most comprehensive overhaul of the no-fault system since its inception in the 1970s. The overhaul set forth a series of changes coming into play at specific times. The biggest upcoming change, effective July 1, 2021, will impact the myriad of medical providers and specialty care facilities that care for those injured in Michigan motor vehicle accidents.

Phases of No-Fault Changes

Tom first touches on the first phase of no-fault changes, which went into effect almost immediately following the 2019 reforms. He notes that the average consumer would likely not have noticed any changes until the second phase began in the summer of 2020 when consumers had to choose their new auto insurance options. In the second phase, for the first time in history, Michigan drivers could opt for no-fault PIP benefits in increments less than lifetime/unlimited. Additionally, in this phase, certain consumers with Medicaid or Medicare coverage could potentially opt out of no-fault PIP benefits coverage altogether.

The medical benefit is the most comprehensive portion of auto no-fault benefits, and choosing a medical benefit level for a life event you cannot plan for is difficult at best. While the world was simultaneously gripped by the many impacts of the novel coronavirus pandemic, Michigan consumers were also faced with having to make incredibly complex decisions regarding their auto insurance coverage. Additionally, while no-fault benefits are certainly a form of auto insurance, these comprehensive benefits also function as health insurance. Determining which level to choose is all the more complex due to that fact alone. For consumers, determining what coverage would be best for them and their family in the unfortunate event of a car accident is almost impossible to predict, yet was a requirement in the second phase.

Tom Sinas interview with WKTV Journal in Focus to discuss medical provider changes under the new no-fault law, the PIP “choice” conundrum, and COVID’s impact on the civil justice system.

No-Fault Medical Provider Changes Effective July 1, 2021

Provider Fee Schedule

The third phase of the reformed auto no-fault law went into effect after July 1, 2021, and has the most significant impact on auto no-fault medical providers and people injured in a motor vehicle collision. This phase of the new auto no-fault law imposes a set of fee caps on those who provide care to injured Michigan auto accident survivors. When signing the reformed legislation into law, Michigan legislators and the Governor determined a schedule of fee caps, setting a limit of how much providers could be paid for their services to injured people.

Medical providers – particularly those who care for the most severely injured, such as spinal cord injury victims, brain injury victims, and those with other complicated and comprehensive medical care needs – are now faced with the reality that, since July 1, 2021, their reimbursement amount could be cut by as much as 45%. Any small, mid-sized, or large business likely could not survive on 45% less revenue than the year before.

As a Michigan auto accident law firm, Tom shares a few personal stories of the panic we are currently seeing in the medical provider and injury communities, with good reason. Handling hundreds of auto no-fault claims year-in and year-out, we understand firsthand how detrimental these fee caps could be to our many exceptional and skilled care facilities and providers throughout the state, and we share their concern over these upcoming no-fault medical provider changes.

Retroactive Fee Schedule Application?

Tom goes on to describe the unfortunate retroactivity component of this no-fault change. If insurers have their way, every person injured in a Michigan motor vehicle accident may be subject to these new provider fee caps. This includes those injured in future car crashes, as well as those already injured. Even people who have an auto insurance policy issued long before 2019 are now threatened to be subjected to this fixed provider rate. The amended 2019 no-fault law essentially sought to take away every injured person’s right to access fully reimbursed medical care. Additionally, it imposes an arbitrary set of fee schedules and leaves providers to figure out how to stay afloat on their own. This is the massive change that came into effect after July 1, 2021.

Our firm has challenged the insurers’ attempt to apply the restrictions in the new No Fault law to persons injured before the effective date of the statute, and the Michigan Court of Appeals has ruled that some of the new law’s restrictions do not apply retroactively, that is to persons who were injured before the law became effective. This case remains before the Michigan Supreme Court. 

Attendant Care Caps Under New No-Fault Law

Many people need care in their homes, and oftentimes family members of seriously injured individuals choose to render that care themselves. This means those with serious injuries can be cared for and provided for by a loved one as opposed to a stranger coming into the home. For over 40 years since the auto no-fault system was enacted, whichever family member rendered care to the injured person could be paid a fair market rate for however many hours they worked. As part of the third phase of the new auto no-fault law that came into effect July 1, those family members will now only be paid up to 56 hours/week. Many families have completely altered their lives to provide this care to their family, and now under the new attendant care caps, they may have to adjust their care and ultimately resort to stranger care for their family member.

What Can Be Done About These Provider Changes?

Legislation pending in Lansing as of the writing of this article seeks to fix some of these issues. Our firm filed a lawsuit seeking to challenge the constitutionality of some of these provisions under the new auto no-fault law. The result of this suit is pending before the Michigan Supreme Court.

You can read more about our lawsuit challenging the constitutionality of the provider fee schedule here, about the attendant care caps here, and an update on the lawsuit itself here.

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