Michigan HB 5854 is Bad for Healthcare Sector
By Monica P. Navarro*
On September 23, 2014, Representative Peter Lund introduced a House Bill which makes changes to the operation of the Michigan Auto No-Fault Assigned Claims Plan (the “Plan”). This Bill is bad for the healthcare sector in Michigan.
The Plan is a safety-net designed to make sure that persons who don’t own No-Fault insurance because they neither drive nor live with someone who drives will nonetheless recover no-fault benefits if they are injured in a motor-vehicle accident and there is no other auto insurance applicable to the claim. This safety-net is particularly important for minors who reside in households where there is no no-fault coverage and the elderly.
House Bill 5854 creates numerous barriers for persons injured in a motor-vehicle accident to qualify for No-Fault coverage by adding, but not defining with any certainty, many cumbersome technical requirements to receive benefits that will trip up claimants. The Bill also imposes an absolute requirement that all claims be submitted one year after the accident, regardless of whether the injured person is an infant or mentally incompetent person. The one year period, in particular, will hurt healthcare providers in Michigan if this Bill passes.
Currently, the No-Fault Act allows a medical provider to file suit against the servicing no-fault insurer within 30 days after notice of the assignment to that insurer is received. Under this Bill, the only way to protect eligibility for no-fault benefits and the healthcare provider’s right to reimbursement for services provided to an injured person is to file a lawsuit against the Plan within one year of the date of the accident. Thus, this Bill could result in a significant loss of reimbursements to healthcare providers, including physicians and hospitals. Further, in many instances, this Bill will shift the cost of caring for auto accident victims to private insurance and public programs which are not designed and are not suited for such a purpose, such as Medicare and Medicaid.
In a No-Fault system such as Michigan’s, auto insurers have an obligation to provide care for the victims of auto accidents. This Bill creates gimmicks that enable auto insurers to skirt that obligation, while passing off the costs of the avoided obligation to the healthcare sector at large. This is plain bad policy.
The fate of the Bill is uncertain in light of the shortened legislative session, but we should all be watching and hoping for its demise.
*Monica P. Navarro specializes in healthcare law and related litigation. She represents a wide array of healthcare entities and professionals. She can be reached at firstname.lastname@example.org
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