Updated June 20, 2021
WHAT TO EXPECT FROM THE NEW MICHIGAN AUTO NO-FAULT
Michigan drivers, passengers and pedestrians have had a piece of mind knowing that if they were injured, tragically or otherwise, that they would have access to the best and necessary care, recovery and rehabilitation services that Michigan has to offer at no cost without benefit limitations, co-pays, deductibles or excluded “custodial” services. The new auto no-fault laws have changed for Michiganders, some hope for better but many agree it’s for the worse. These new changes come with the hope that the states auto insurance premiums will be lowered, but will also come at a cost to those who are seriously injured, their families and service providers. The new bill, Public Act 21 of 2019 was signed into legislation May 30, 2019 by Governor Whitmer and changes went into effect June 11, 2019. The second wave of changes take effect July 2, 2020 and the third in July of 2021. In this article, we will focus on the most critical impacts on survivors, their families and service providers injured before and after PA 21.
HOW NO-FAULT INSURANCE WORKS AND WHAT'S CHANGING?
The Michigan Catastrophic Claims Association (MCCA) is a private, non-profit unincorporated association that was set up in 1978 that would provide unlimited Personal Injury Protections (PIP) benefits for medical expenses resulting from an auto accident in Michigan under its auto insurance no-fault law (MCCA, 2021). Prior to the new bills, PA 21 and PA 22, the MCCA provided unlimited PIP benefits that covered medical expenses that included hospital stays, rehabilitation and therapy services, cost of wheelchairs and other adaptive equipment, home modifications, doctor’s visits, medical supplies and equipment, in-home attendant care, rent subsidies, worker’s compensation and transportation services. These services came at a cost to Michigan drivers in the form of a mandatory MCCA fee applied to insurance policies. The new auto law reform is supported because Michigan drivers will get a 55% reduction in the annual MCCA fee for insured vehicles and would be given coverage options, that allow drivers to choose their medical benefit amount or opt out of all medical benefits, which were not available prior to. The annual MCCA assessment fee required by drivers was reduced from $220 to $100 for those who choose an unlimited/limited Personal Injury Protection (PIP) coverage option. This discount is only guaranteed from July 1, 2019 through June 30,2021, after that they are free to increase their prices if they want. Their goal was to eliminate the MCCA assessment fee altogether, but the legislation is crafty because the loop-hole in the details say that this will happen only if the MCCA does not have a deficit. Right now, the MCCA is documented to have a $2 million deficit. What that means is if there is a deficit that rolls over in the previous year, drivers will still have to pay the MCCA assessment fee. The changes to Michigan auto no-fault will put limitations on benefits received which will result in inadequate, substandard care if injured and uncovered by unlimited coverage.
The changes that took immediate effect that critically impacts people injured after PA21 who don’t have a personal or household car insurance is the optional PIP cap of their lifetime care. Under the new auto no-fault law, PIP caps of different levels will then let drivers forfeit their right to unlimited medical coverage if they become injured in an auto accident. “As of June 11, 2019, these different levels of coverage include $50,000, $250,000, $500,000, and an unlimited option” (Michigan Auto Law). Once the person’s cap amount is reached, they would be required to sue the at-fault driver, get Medicaid, pay their own medical expenses or even declare bankruptcy. Drivers on Medicare will be allowed to opt out altogether. These new options will come with the exclusion of the MCCA fee (all except the unlimited option) and a reduction in policy prices.
PUTTING THINGS INTO PERSPECTIVE
These new PIP options are but a drop in the bucket in comparison to the cost if critically injured. For example, I am categorized as a high-level tetraplegic, with a spinal cord injury in the C1-C4 section of the spine. According to the National Spinal Cord Injury Statistical Center, for a person with an injury classified as a high-level tetraplegic, the first year of expenses are totaled at an average of $1,149,629 and nearly $200.000 each year after (NSCIC, 2020). These amounts total to $5,100,941 if you were injured in your mid-twenties as I was (NSCIC, 2020). At this rate, I predict that our state will become burdened by state-run nursing facilities and families will struggle to take care of loved ones or be torn apart. My fear is that without adequate and available resources for care, hope for recovery and rehabilitation will end for many before it can even manifest. For those who were injured prior to PA21, they will retain their lifetime benefits for care, recovery and rehabilitation, but in the third wave of changes they will face insurance limits placed on the services they use.
WHAT ELSE HAS CHANGED?
Another change that took effect on June 11th involved policy concerning the option to purchase Managed Care Policies. Consumers would receive a small discount in exchange for certain rights. Insurance companies would be allowed to monitor and adjust a person’s care and use preferred providers and networks of clinics and doctors. In other words, like Medicaid and Medicare, you can only get service from doctors or clinics assigned by the insurance company. This will limit a patient’s choices on service providers that suit their needs specifically.
Also effective immediately, no out-of-state residents injured in Michigan will be covered by a PIP policy, which means that they will be left high and dry to make a liability claim against the at-fault driver and only if they sustained a serious injury that impairs body function.
INSURANCE COMPANIES CONTROL YOUR CARE
One of the most critical changes to the no-fault system under PA 21 are going into effect on July 2, 2020 that will affect insurance coverage for Michiganders injured in auto accidents prior to and going further. As of July 2, The State Department of Insurance and Financial Services (DIFS) will establish criteria and standards for insurance companies to conduct a Utilization Review of patients’ medical services. Now, services that are prescribed by the patient’s doctor may be subject to the Utilization Review and providers will be required to give insurance companies information upon request and answer questions regarding not only products and services, but accommodations that are not usually associated with, are longer in duration, are more frequent, or extend over a greater number of days than usually required for the diagnosis or condition. Treating medical issues of patients with spinal cord and brain injuries are not always the same and may require different standards than normal in some cases. These types of limitations can severely impact one’s health and recovery.
WHAT’S COMING NEXT?
The third wave of changes that are most critical will take effect July 2, 2021. These new changes will limit family provided attendant care and health care providers will begin to be paid based on a Fee Schedule based on Medicare and Medicaid.
The new Michigan Auto No-Fault Reform limits family provided attendant care to 56 hour per week. This limitation is the same as the limitations for people injured in the workplace under the Michigan Workers’ Compensation law. This change is dramatic from the previous law that allowed family members to provide care for their loved ones who are catastrophically injured 24 hours a day. According to the new Michigan car insurance law, the 56-hours-per-week limitation applies only to attendant care provided to a car crash injury victim if the care is provided in the home and by a “family member.” Technically, under the new Michigan car insurance law, a “family member” is specified as someone related to the victim, lives in the home with the victim or is a business, social friend or acquaintance of the victim’s from before their car accident-related injuries. The new 56-hours-per-week limitation on in-home care does not apply to commercial agencies who provide attendant care services.
The was supposed to be a silver lining for families who do not use commercial attendant care services where they could contract with insurance companies for hours in excess of the 56-hour limitation. Family-provided attendant care is often significantly less expensive than the commercial agency rates. Therefore, it would be reasonable to believe that many insurance companies and claims adjusters would contract for family-provided care in excess of 56 hours per week if it is reasonably necessary and thousands of dollars cheaper than commercial attendant care. There hasn’t been much headway in that department. Families are worried that they will be in financial ruin and their loved will suffer life-altering, in some cases, deadly consequences.
Michigan drivers will now be offered an Attendant Care Rider option if they purchase a $50,000, $250,000, or $500,000 insurance policy. This option would provide a rider with coverage for attendant care up to $5,000 when the amount of attendant care for a named insured, spouse, or resident relative exceeds the Personal Injury Protection Insurance Coverage Allowable Expenses Benefits limit. $5,000 is but a drop in the bucket compared to the cost of agency provided attendant care. Attendant Care Rider is only available for the Personal Injury Protection Insurance Coverage Allowable Expenses Benefits limit options of $50,000, $250,000, and $500,000.
Fee Based Schedule
Doctor visits, lab procedures, physical therapy, occupational therapy, and speech therapy visits, hospital inpatient stays and many other services will be paid based on a percentage related to what Medicare pays. The percentage can be different based on the setting, and the amount providers are paid declines over the first few years. What that means for people injured prior to the new law is services that are not covered by Medicare like neurological rehabilitation, residential rehabilitation, home health care, transportation, recreational therapy, and vocational rehabilitation. are currently scheduled to be reimbursed at 55 percent of what a provider charged as of January of 2019.
HOW WILL THIS EFFECT THOSE INJURED PRIOR TO THE NO-FAULT REFORM?
When this new reform to Michigan Auto No-Fault was rushed through the legislative process, it left many people wondering how these changes would affect those who were already receiving benefits.
Many will have to eventually, cut back on their services or reach certain financial disaster and hardship. For example, an hour of home health care at a commercial homecare service has a charge of $28. If the insurer were to pay the service $15 per hour, the agency would not be able to pay its staff, provide benefits, insurance, training, and all other costs associated with running the business. This will be a devastating blow to families who rely on these types of services effected. Families will have to pay these balances or end their services.
Please advocate for a change to this “55% Exception Fee Schedule” because the impact on these services, even if unintended, is too severely a consequence. Remember, these changes won’t go into effect until July 2021, so recipients, families and service providers are in a uncertain, frightening frenzy.
WHAT WE’LL MISS
Who’s Grandfathered? What does that mean? A grandfather clause is a provision in which an old rule continues to apply to some existing situations while a new rule will apply to all future cases. Those exempt from the new rule are said to have grandfather rights or acquired rights, or to have been grandfathered in. Unfortunately, the grandfather clause will not be applied in the case of attendant care, therapy services and family attendant care hour limitations which is most important, in fact, dire in these critical hours leading up to the July 2nd deadline. The lack of these provided services will create a humanitarian crisis unseen in Michigan, perhaps our nation.
WHAT WE NEED TO DO
In the final hour, what you can do is reach out to our Michigan community leaders and legislators to revise these auto-reform laws and demand an injunction until the dust settles. A bill introduced by Rep. Ryan Berman (R), Rep. Phil Green (R), Rep. Julie Brixie (D), Rep. Robert Bezotte (R), Rep. Kelly Breen (D), HB4992, would revise limitations on benefits paid to providers and make insurance companies honor their contract with disabled Michiganders who were promised to receive unlimited lifetime care and medical services prior to the auto reform laws. With only days left, contact your senators, representatives, Gov. Gretchen Whitmer and other local elected officials and influential community leader to stand up for the disabled communities within our state.
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