Publication

12 August 2026

No-Fault Medicare Opt-Out Denial? Look Again. You Just Might Find Coverage

A no-fault insurer’s Medicare opt-out denial may not be the end of the claim. The key question is whether the opt-out was legally effective in the first place.

This year, the Michigan Court of Appeals gave healthcare providers an important reason to look behind those denials. In Northland Radiology, Inc v Allstate Fire & Cas Ins Co, ___ Mich App ___; ___ NW3d ___ (2026) (Docket No. 374214), the Court held that an election to opt out of PIP medical coverage under MCL 500.3107d (the Medicare opt-out statute) is ineffective unless the statutory requirements are actually satisfied. If the election is ineffective, the policy is treated as providing unlimited PIP medical coverage, absent another valid defense.

The Case

The named insured in Northland had Medicare and elected to opt out of PIP medical coverage. Her son, whom the Court analyzed as a resident relative, had Medicaid, which is not qualified health coverage, and had not been identified as a resident relative or documented as having the required coverage when the named insured renewed the policy and executed the opt-out. The no-fault insurer nevertheless denied the provider’s claim based on the Medicare opt-out.

The Court of Appeals reversed, ruling that all the statutory requirements must be satisfied for the opt-out to be effective—including the requirement that the named insured’s spouse and all resident relatives have qualified health coverage or PIP medical coverage under another policy.

Why It Matters

For providers, the practical point is important: do not assume that a denial is valid where the insurer states “the insured opted out of no-fault medical coverage in favor of Medicare.”

If the named insured did not make an effective election, the law currently says that the consequence is not limited to the particular resident relative who lacked coverage. The entire policy is treated as providing unlimited PIP medical coverage.

Northland is a published, precedential decision. The insurer’s application for leave to appeal remains pending before the Michigan Supreme Court (Docket No. 170265), but the decision remains binding precedent in the meantime.

What Healthcare Providers Should Ask

When an insurer denies a claim based on a Medicare opt-out, work with the patient and your legal team to determine who was living in the named insured’s household when the election was made. Ask:

  • Who were the named insured’s spouse and resident relatives at the time of the election?
  • Did each have qualified health coverage or PIP medical coverage under another auto policy?
  • What opt-out forms and health-coverage documentation did the insurer receive?

If those answers are unclear or the underlying documentation does not support an effective election, there may be a basis to challenge the denial.

One caveat: the Court expressly declined to decide whether the insurer could assert a fraud defense and seek rescission of the policy. That issue is separate and does not automatically defeat the provider’s claim.

Questions? Please contact any member of the Miller Johnson Medical Reimbursement Group.