Called It: The Michigan No Fault Act’s Utilization Review Medical Provider Administrative Appeal Process is Not Mandatory
The 2019 amendments to Michigan’s No-Fault Act changed the landscape for medical providers. One change was to vest medical providers with a statutory cause of action against an insurer who wrongfully denies or delays payment of a claim for motor vehicle accident related medical charges. see MCL 500.3112. That change was a huge win for the medical provider community. Court action is often the most effective way to resolve complicated coverage questions, and insurance reimbursement disputes.
Another change was the creation of utilization review standards. The scope of these standards is narrow and the legislature designed the standards to address two issues. First, to ensure that medical products and services are consistent with medically accepted standards. Second, to require insurers to price-audit no fault medical claims and filter payment or reimbursement through the MCL 500.3157 No-Fault fee caps. But what happens when an insurer denies all or part of a claim on grounds that care and treatment was overutilized? Or that the cost of that care and treatment was inappropriate under the MCL 500.3157 No-Fault fee caps? According to a recent argument from Auto Club Group Insurance Company in True Care Physical Therapy, PLLC v Auto Club Group Insurance Company Docket Number 362094 (Decided May 25, 2023), a medical provider must pursue an administrative appeal through the Michigan Department of Insurance and Financial Services to contest the insurer’s application of the No-Fault fee cap, or the insurer’s “overutilization” underpayment, before taking the insurer to court. But according to the Michigan Court of Appeals, not so. In True Care Physical Therapy, PLLC, the court ruled that it is the medical provider’s choice to use the administrative appeal remedy to challenge a utilization underpayment. The law does not compel a medical provider to resolve utilization underpayments in the administrative forum. Nor does the law condition medical provider court action on first exhausting administrative remedies available under the DIFS utilization review appeal process. The take-away is that medical providers always have the right to their day in court. The law gives medical providers full control to select the forum in which to resolve their utilization review disputes with insurers.
If you have any questions about this post, or any other medical reimbursement issue, please contact Andrew Oostema, or any other member of Miller Johnson’s Medical Recovery Group. We are here to help.