What an incredible election season this is. Not only are the national elections drawing great interest (people are already voting absentee in record numbers), but state and local elections are also of great importance. The nation has recently been riveted by the hearings over the United States Supreme Court Justice opening created by the passing of the legendary Ruth Bader Ginsberg. In Michigan, on November 3rd, we will be choosing TWO SUPREME COURT JUSTICES. We recommend:
- Reelect Chief Justice Bridget McCormack.
We have not had a Democratic majority on the Court in over 20 years. We anticipate many questions about the new law will be going to the Supreme Court over the next couple of years. Both Bridget McCormack and Elizabeth Welch are brilliant attorneys and have great judgment and temperament. They will be huge assets to our Michigan Supreme Court. Please cast your vote for McCormack and Welch! NOTE: THE SUPREME COURT CHOICES ARE FOUND ON THE NON-PARTISAN PORTION OF THE BALLOT. DON'T MISS IT!
II. DEVELOPING ISSUES UNDER THE NEW LAW
A. PIP CHOICE
PIP "Choice" went into effect on July 2, 2020. Since then, unlimited coverage is no longer mandatory. Various coverages are now optional from unlimited to $500,000 to $250,000 to $50,000 or even nothing at all. We have already begun to see new cases where the injured person is covered by less than unlimited no-fault. There are many implications from this change. Here are a few:
1. Determining Coverage. Providers must now determine the applicable level of coverage. The easiest way is to simply ask the patient to show a current declaration sheet. Also, the insurance company can be called for confirmation. Unfortunately, currently there is no rule requiring the insurer to disclose this information. Some insurers are being obstructive. Obviously, there needs to be a rule requiring complete disclosure as to the applicable limits.
2. Priorities. An important caveat to the above is that people won't always be claiming coverage under their own policies. For example, people who are injured while passengers in certain vehicles for hire or employer owned vehicles, as well as motorcycle riders, do not claim no-fault benefits from their own policy. Rather, they claim from the policy of the vehicle involved in the crash. This has always been the case. However, in the past, we always knew that the coverage would be unlimited. Now we will need to know the priority rule and the PIP choices covering those vehicles just to know what coverage is available to the injured person. We anticipate a great degree of chaos as we try to determine which insurer is of highest priority, and then what the coverage choice is for that highest priority insurer.
3. Cost of injuries exceeding coverage. We now face the nightmare of bad choices in PIP coverage. We are already seeing cases where the costs of catastrophic injury will exceed the coverage chosen. Providers will be fighting amongst themselves as to which one gets paid first out of the limited proceeds. Again, and unfortunately, there is currently no rule for this situation. That is, there is no rule governing who gets paid first. Therefore, more than ever before, providers need to be deliberate and aggressive in protecting their rights. Legal referrals must be made sooner than before.
4. Tort liens against the negligence actions of our patients. Because the cost of medical services may exceed the available no-fault limits, providers should also consider seeking assignments from their patients as to the patients' tort claims (i.e., suing at-fault drivers in addition to seeking no-fault insurance coverage). The new no-fault law permits such tort claims for "excess" economic loss; that is, for medical benefits beyond the insurance limits.
B. FEE SCHEDULES: JUMPING THE GUN
We have been seeing a number of letters to providers from insurer review companies demanding that the provider produce its chargemaster in effect as of January 2019. The new fee schedules for non-Medicare services are based on the provider's January 2019 chargemaster. However, that fee schedule does not go into effect until July 1, 2021. Until then, charges are governed by the reasonable and customary charge analysis that has long existed in the law.
C. ALERT AS TO CASHING CHECKS
It sure is nice to receive a check in the mail intended as payment of an outstanding bill! But caution is urged when the payment you receive is less than you expect. Read on to understand why.
A check that bears the words "FINAL PAYMENT" or language to that effect, once cashed by you, could constitute a full, final and complete release of all amounts owed to you. It may amount to an "Accord and Satisfaction" of your claim and could mean you lose all right to seek more.
So, what is a provider to do upon receipt of a check from a patient or his attorney that is less than the expected amount? Inspect the check for any conspicuous terms indicating that the insurance company, the patient, or his attorney intends it as Final Payment. Contemplate if the amount is sufficient to discharge the claim. If yes, you may accept the check and close the account. If not, do not cash or deposit a check that includes terms of that kind. Contact the insurer or the patient/attorney and tell them the claim will not be discharged.
You can further help protect yourself by including a statement on your bill in which you designate all payments must be sent to a specific person, office, or place. That designated recipient should be well attuned to look for "Final Payment" language. Moreover, if any payment is sent elsewhere, including "Final Payment" language and inadvertently cashed, it will not be an Accord and Satisfaction because the check was not received by that designated person, office, or place.
D. UTILIZATION REVIEW
Utilization Review (UR) is a brand new procedure under the new law. Whereas fee schedules regulate fees that are charged by providers, UR, as the name implies, seeks to regulate the the nature and quantity of services rendered. Of course, insurers have always been obliged to do this, and have, of course done so. What's new is that there is a new appeal procedure available within the Department of Insurance and Financial Services (DIFS). Also new is the standard by which claims will be reviewed: "Medically Accepted Standards." The most recent iteration of the UR rules defines "Medically Accepted Standards" to mean "...the most appropriate practice guidelines for the treatment, training, products, services and accommodations provided to an injured person. These practice guidelines may include generally accepted practice guidelines, evidence-based practice guidelines, or any other practice guidelines developed by the federal government or national or professional medical societies, boards, and associations." R61(i). We expect the UR rules and procedures to go into effect by the end of the year. Many questions remain unanswered. One of the most important is whether the rules provide an alternative or exclusive method to challenge insurer decisions. We believe that the UR rules are alternative, and that providers will still be permitted to engage in civil litigation. As with so much of the new law, time will tell.
III. CASE LAW DEVELOPMENTS UNDER THE EXISTING LAW: ADULT FOSTER CARE FACILITIES
AFC facilities are strictly regulated under Michigan law. MCL 400.704, et seq. Among the characteristics of AFC facilities are: (a) they provide room and board (i.e., not just occasional snacks); (b) they provide personal care; and (c) they provide care for a minimum of three persons in the same facility. Facilities that qualify as AFC facilities must be licensed. However, facilities that do not qualify as AFC facilities are not subject to licensure. Insurance companies have often mistaken Semi Independent Living Programs (SILPs) for AFC facilities. In a number of cases, insurers have refused to pay benefits to SILPs on the theory that, to the insurer, the SILP "looks like" an AFC facility. A body of law is now developing making clear that SILPs are distinct from AFC facilities, and that SILPs do not require licensure. This has not been finally answered by appellate authority yet, so we can expect further mischief from our insurance friends.