22 July 2022

Insurance Priority Is (Still) Not a Basis to Pend an Otherwise Payable No Fault Claim

The no fault act contains rules of insurance priority for persons who are injured in motor vehicle accidents. And for any given accident there may be several no fault insurers who are in the order of priority to pay the injured person’s no fault benefits. But it is not always clear which insurer is highest in priority. Michigan no fault law has always recognized this reality and says that it is unreasonable for a no fault insurer to delay an otherwise payable no fault claim solely on grounds that another insurer may be higher in the applicable order of priority. The Michigan Supreme Court’s recent decision in Griffin v Trumbull Insurance Company,___Mich___(2022) re-affirms this principle.

In Griffin, Trumbull Insurance Company insured a motorcyclist who was injured in an accident that involved a motor vehicle. And under the rules of insurance priority applicable to Mr. Griffin’s accident, the no fault insurer of the owner of the involved motor vehicle was higher in priority than Trumbull. Mr. Griffin and his attorney diligently worked to identify the motor vehicle owner’s insurer but they came up empty. So Mr. Griffin claimed no fault benefits with Trumbull, who pended the claim. Due to Trumbull’s delay, Mr. Griffin was forced to file suit before one year statute of limitations expired. During the litigation the parties discovered that Harleysville Insurance Company insured the owner of the involved motor vehicle. Harleysville was legally higher than Trumbull in the order of priority. But it was too late for Mr. Griffin to make a claim with Harleysville because the one-year statute of limitations had already expired. So the trial court dismissed Mr. Griffin’s suit against Trumbull.

The Michigan Court of Appeals upheld the trial court’s decision. But the Michigan Supreme Court reversed the judgment and sent the case back to the trial court for more proceedings. The Supreme Court concluded that no fault claimants must exercise due diligence when investigating applicable insurance, and presenting their claims for payment. But the law does not require a claimant to rule out every theoretically possible avenue for coverage, or to do the impossible. Likewise, lower in priority insurers may not pend otherwise payable claims due to concerns over priority. And if they do, as Trumbull discovered, they may end up liable to pay the claims.

Griffin offers two take-aways for healthcare providers:

  1. Diligently work to identify no fault coverage applicable to your patient’s medical charges. But don’t let perfect be the enemy of good. Claim benefits through any identified lower in priority insurer and hold that insurer accountable for a response.
  2. Be mindful of the one-year deadline. Harleysville was the highest priority insurer in this case. But it avoided Mr. Griffin’s claim entirely due to a timing defense. So healthcare providers should optimize their process to escalate pended or denied no fault claims at the 180 day mark.

Please contact Andrew Oostema or any of the attorneys in Miller Johnson’s Medical Recovery Group for questions about this alert, of other healthcare provider reimbursement question.  We are here to help.