As I alluded to a few weeks ago, the Republican-led majority in the state legislature was back at it, trying to amend the Michigan automobile no-fault law to limit benefits at the behest of the car insurance industry.
This year was different however. Unlike prior legislative sessions, when previous no-fault bills stalled and never came to a floor vote, the newest reincarnations of “no-fault reform” moved quickly. Instead of taking testimony and holding normal hearings, the State Senate held no hearings provided little time for legislators to even read Senate Bills 248 and 249 before they were passed out of committee and given a floor vote. On Thursday, the bills passed mostly along party lines 21-17.
What do the bills do? A lot and it is all bad for patients but all good for insurance companies.
First, the bills limit what hospitals, doctors, physical therapy centers and all other medical providers can charge for the medical services they provide motor vehicle accident victims. Instead of receiving the reasonable and customary charge for medical services, medical providers will be forced to bill at the worker’s compensation fee rate, a much lower reimbursement fee schedule that unfairly punishes the doctors and hospitals that treat auto accident victims.
In addition, the proposals limit what care providers can recover for performing “attendant care”. Currently, people who perform personal care (feeding, clothing, supervising) to severely injured accident victims can recover an hourly rate that is reasonable and customary. Most of the time, the charge is agreed to by the care provider and insurance carrier.
Under the new proposal, care providers cannot recover more than $15 per hour for their work. This is true even if they work for an agency or company, and perform such skilled nursing services as changing catheters. Also it limits caregivers to one caregiver per claimant, which is unacceptable for quadriplegics and other catastrophically injured individuals. In addition, injured persons must pay a $200 per month deductible, a ridiculous charge given a person requiring attendant care cannot work in the first place.
It would also replace the Michigan Catastrophic Claims Association (MCCA), an organization of insurance carriers that pays for treatment that costs more than $530,000. Under the new bill, a new organization would be created run by a governor-appointed seven-person board. Although the organization would be subject to the Freedom of Information Act (FOIA), is would be completely controlled by the insurance carriers themselves.
Furthermore, it is unclear what happens to the money currently under MCCA control. Many observers including myself believe the MCCA is literally sitting on billions of dollars in assessments that has grown with interest over the years. Would this money simply be distributed to member insurance carriers when nobody is looking? Does the fund carry over to the new organization? No answers are provided in the bills.
The bills also create a so-called “Fraud Authority” that is not subject to the Freedom of Information Act. This authority would consist of 15 individuals (8 of whom are appointed by member insurance companies) who will purportedly be charged with investigating and eliminating fraud in the no-fault system.
The two bills make a mockery out of the Michigan no-fault system.
First, the bills contain no mandatory reductions in insurance premiums for Michigan motorists. Let me repeat that. Despite giving up a ton of benefits, there is no guarantee your insurance rates will decrease with the passage of these bills.
Second, there is no need to change the current system. The reason Michigan has expensive auto insurance is because Michigan has the highest collision coverage expenses in the nation. Collision coverage refers to the property damage to a vehicle, which is not addressed in these proposals. Instead, the insurance industry seeks to limit medical coverage on Michigan auto policies, which is the best value in the nation.
Third, the proposals create no fraud authority or bad faith law to monitor and investigate insurance carriers. Instead, the proposals only seek to stop claimant fraud. It provides no remedies for individuals irreparably hurt by insurance companies that lie and cheat their policyholders.
In addition, these bills only move the cost of treatment auto accident victims from the insurance companies to taxpayers. People will still continue to get into car accidents. However, instead of insurance carriers paying the claims, car accident victims will have to use Medicare, Medicaid or private health insurance to pay for care. Who do you think will pay for this?
These bills only place even more pressure on our nation’s health care system and our state’s budget.
The proposals now move onto the Republican-controlled state house. It is expected the House Insurance Committee will take up the bills as early as next week. It is imperative the House does the right thing and votes against these package of bills.
Auto insurance rates are high in Michigan, but these bills do absolutely nothing to solve the problem. Instead they merely are a cash giveaway to the insurance lobby while Michigan citizens foot the bill.
If passed, the new law will severely hurt hard working hospitals and doctors who treat auto accident victims. Perhaps more importantly, it will severely affect the catastrophically injured people who rely upon the current system to survive.