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As time passes since the 2019 No-Fault reform became effective, Court of Appeals decisions continue to help us understand the meaning of the new law. This is to be expected. Remember that we didn’t start getting significant decisions on the original 1973 no-fault law until 1978 and beyond. This edition of our Enewsletter will focus on several such decisions, keeping in mind that more are on their way and coming down all the time.
I. THE “INCURRED” REQUIREMENT
One of the lesser known requirements under the no-fault law is that expenses must be “incurred.” This has generally been held to mean that the patient must be liable for the expenses claimed. We have had a couple of recent decisions that serve as cautionary tales on the need to pay attention to this requirement.
In Centria Home Rehabilitation v Allstate, a published decision from 2025, the Court of Appeals affirmed summary disposition for the defendant where plaintiff presented no documentary evidence to show that the provider ever charged their patient the amount claimed from the no-fault insurer.
In Estate of Richards et al v Grange Ins Co of Mich, an unpublished decision from 2025, the insurer argued that two service providers had not incurred their charges. The Court of Appeals agreed with the trial court that one of the providers (Spectrum) had written off their accounts for the plaintiff patient. Accordingly, the plaintiff had no legal responsibility for the Spectrum bill, and the bill was not incurred. However, the circumstances were different as to the other provider (the Detroit Medical Center). Though the DMC ledgers reflected a $0 balance, DMC produced evidence in the form of an affidavit from a billing representative that contradicted the billing ledgers and stated that DMC was expecting payment from defendant. So even though DMC was not directly pursuing their right to payment from their patient, the Court reversed the trial court and held that the DMC charges were still incurred.
There are at least a couple of takeaways from these cases:
- Make sure to have the patient sign some kind of financial responsibility document making clear that the patient is responsible for services rendered. It is important to be clear that services are not being rendered for free;
- Be careful when “zeroing” out an account, as it may be evidence that the patient no longer owes the charge and it is therefore no longer “incurred.”
II. PROVING THE “REASONABLENESS” OF YOUR CHARGES
All providers must have a strategy for proving that its charges are “reasonable.” For injuries from before June 2019, the only rate regulation is that the charges must be reasonable. For injuries after June 2019, providers must still prove the basic requirement that the charges are reasonable, though they will then be subject to the new fee caps. So the provider has the fundamental burden in litigation to prove that the charges are reasonable.
Case law has recognized a number of different methodologies for proving the reasonableness of charges. These include the market approach, which involves proving that the provider’s charges are consistent with those charged by similar providers for similar services in the local market place. Another methodology is to review the provider’s costs of doing business and the resulting profit margin.
However, there must be some methodology to prove the reasonableness of the provider’s charge. We witnessed a cautionary tale in Claims Management Consultants of Michigan v Auto Club Ins Ass’n, an unpublished decision from December 2025. Here, the plaintiff provided attendant care services to its patient. Plaintiff charged $58.80/hour for services. Defendant paid only $28/hour. Plaintiff testified that he paid caregivers a base hourly rate of $18 to $20/hour, plus other bonuses and benefits. But plaintiff did not provide proof as to why $58.80 was a reasonable hourly rate. Instead, plaintiff testified that he “set a rate I felt was fair.” Plaintiff did not do a market survey and offered no testimony about profit margins or the company’s general profitability. The Court of Appeals affirmed the trial court’s order of summary disposition in favor of the defendant. The Court summarized the law in this area as follows: “[T]his Court and our Supreme Court have explained that determining the reasonableness of charges is a fact-specific inquiry, which requires evidence of the actual costs incurred and whether the charges align with marketplace rates. Cit om...’A medical provider’s typical price cannot be deemed reasonable unless it reflects an amount that is actually being charged in the marketplace.’”
III. BILLING PROBLEMS AND PENALTY ATTORNEY FEES FOR
THE INSURER
The last case for this edition emphasizes the importance of paying attention to proper billing. In Life Skills Village v Farm Bureau, an unpublished decision from March 2026, the court found “evidence of significant overbilling and sloppy bookkeeping by plaintiff and noted that the court ‘personally [hadn’t] seen a case where bills have been so excessive.’” On that basis, the Court of Appeals approved a no-fault penalty attorney for the insurer in the amount of $47,212.50. This is a startling result proving that poor billing and bookkeeping practices can actually result in huge penalties. The takeaway is obvious: pay attention to your billing!
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