No Fault’s 1-Year Timing Rules and Tolling: Can a Medical Provider Even Stop the Clock From Running?

The Michigan no-fault act contains many important deadlines.  If any of these deadlines are missed, a medical provider may be unable to collect payment for the services provided to a patient eligible for no-fault benefits.

First, written notice of the injury must be provided to the responsible no-fault insurer within 1 year of the date of the accident.  This deadline is generally firm and has few exceptions.  This written notice can be provided by someone other than the medical provider, but a medical provider should always confirm as soon as possible that the insurer has received this notice and that a claim has been opened.

Second, a medical provider must file a lawsuit against the responsible insurer within 1 year of the date of the accident.  This deadline, too, is generally firm with 1 exception: if the written notice was provided to the insurer or the insurer has paid any benefits for the injury, a medical provider can file its lawsuit within 1 year of the date the provider last treated the patient.  This is no-fault’s “Statute of Limitations” for filing a lawsuit.

Finally, if a medical provider files a lawsuit, the provider cannot recover for any claims older than 1 year before the date the lawsuit is filed.  This last timing requirement is called the “One Year Back Rule.”

Each of these timing requirements is complex.  And they cannot be ignored.  But in narrow circumstances, they can be now be extended through a “tolling period” created by our Legislature as part of the 2019 amendments to our no-fault act.

What is tolling and how does it work?  Imagine an alarm clock that is set to ring precisely 1 year after a medical provider treats a no-fault patient.  If the provider does not file suit against the insurer before the alarm sounds, the claim will be barred.   But if the written notice of the injury has been timely given to the insurer (within 1 year of the accident) or the insurer has made a previous payment on a claim for benefits (to anyone), the medical provider can temporarily pause the ticking of the alarm clock – it can hit the snooze button.  The alarm clock can stop running from the time the medical provider submits its claim until the date the insurer formally denies the claim.  When the insurer issues the formal denial, the clock starts running again.

But importantly, a medical provider’s ability to “hit the snooze button” is only available if the provider pursues its claim with “reasonable diligence.”  Reasonable diligence has not been defined by our Legislature or our courts, but we can assume that it means that a provider should proceed without delay in billing the responsible no-fault insurer after it provides a medical service.  Timely billing and continued pursuit of payment gives the provider the best chance for taking advantage of tolling.

BEST PRACTICE:  While tolling may be available, it should be relied upon sparingly.  If a provider must rely upon tolling to preserve its claim for benefits, then the 1-year deadlines that ordinarily apply to the pursuit of no-fault claims have already come and gone.  Reliance upon tolling should be the exception, not the rule.  Providers are strongly encouraged to file suits, on both denied claims and claims where payment have been delayed, well before 1 year of the date of service for which payment is sought. While tolling might save a time-barred claim, it should not be used as the primary means for calculating when a lawsuit should be filed.  The risks are too great that a court might disagree that tolling applies to a provider’s particular claim.

Please contact Dick Hillary or any of the attorneys in Miller Johnson’s Medical Recovery Group for questions about this alert or for a review of any of your claims at mjmedrecovery.com.  We are here to help.