For thousands of auto accident victims and their families, Michigan’s no-fault insurance system was a saving grace, providing essential lifetime care and access to needed therapies and treatments. Sadly, Michigan’s new auto insurance “reform” package, passed in 2019, is about to dismantle this system, leaving limited access to care for accident survivors and others.
There is a lot that is wrong with this law that we hope to correct. But there is one key element that we CAN and MUST fix right now. We need to eliminate the provision that caps provider fees at 55% of what they charged in 2019.
A major goal of the new law was to limit the ability of providers to charge excessive fees to insurance companies so that they, in turn, would reduce premiums for Michigan drivers. Excessive fees were allowed under the old no-fault law because there were no caps. But, instead of allowing providers to charge insurers the same reasonable rate they charge for services when they are not covered by no-fault auto insurance (for example, a brain injury suffered at home) the new law enacts a blanket fee reduction of 45% of what the provider charged for the service in 2019.
Essentially, because of past bad actors, ALL providers will have their fees reduced to unsustainable amounts. Under this new cap, 9 out of 10 post-acute centers do not have confidence they can continue to operate.
In an effort to make this reduction less severe, the law contains a provision that, IF Medicare has a fee schedule for the service, then providers may bill insurance up to 200% of that fee.
What the legislators who crafted this new law may not have realized is that most post-acute brain injury rehabilitation and home care services ARE NOT on Medicare schedules and would therefore only be reimbursed at 55%.
Accordingly, the new law creates a dire financial situation for rehab and home care providers whose income will be slashed by 45% on July 1, 2021 when it goes into effect. Without access to these services, patients with horrific injuries from life-altering accidents will lose access to care, and face chaos and disruption in their recovery process. People who have been relying on the benefits of the no-fault insurance for decades would have them stripped away.
So what can we do?
We can advocate for HB 4486 which offers a budget-neutral solution that would enable the continued care of auto accident survivors – without rewriting the entire fee schedule, adding costs to the system, or changing any other element of auto no-fault reform.
HB4486 removes the 55% cap but maintains the other cost cutting measures of the bill, including limiting fees to no more than 200% of the amount payable by Medicare, but not exceeding the average amount charged by the provider for the treatment on January 1, 2019. If there is no amount payable by Medicare, the fee charged must still be reasonable and not exceed the amount the provider customarily charges for “like” treatment and services in cases not involving insurance.
With this simple fix, over 6,000 Michiganders relying on these types of services will continue to receive them and thousands of jobs will be saved. The many benefits of this proposed bill include:
Preserves access to specialized rehabilitative care for people with serious injuries sustained in auto accidents — often as a result of somebody else’s negligent driving.
Saves thousands of caregiver jobs, according to a recent survey by the Michigan Brain Injury Provider Council. (Source cited below)
Maintains cost controls implemented as part of the 2019 insurance reform legislation.
Offers a fair and reasonable cap on providers — no more than 200% of what Medicare will pay, just as the reforms dictate. Providers are still held to their 2019 rates, if these rates are lower than the new fee schedule.
Allows ethical practitioners to remain in business.
Does not add costs to the system, while maintaining the long-term beds and services required to meet the needs of Michigan’s patient population.
Time is of the essence—even if the bill is passed quickly and immediate effect is granted, the 90-day waiting period puts additional strain on small businesses trying to keep their doors open to continue providing care.
Please call the following State Representatives and urge them to support HB4486
Rep. Ryan Berman (D39) 517-373-1799
Rep. Mike Mueller (D51) 517-373-1780
Rep. Andrea Schroeder (D43) 517-373-0615
Rep. Mark Tisdel (D45) 517-373-1773
Rep. John Reilly (D46) 517-373-1798
Script for Calling Representatives:
I am deeply concerned about the impact of Michigan’s new auto insurance law which will devastate access to care for accident victims and families. Set to go into effect on July 1st, the new law cuts post-acute rehab reimbursement fees by 45% which will leave 9 out of 10 rehab facilities at risk of closing. Please support House Bill 4486 which offers a fair and reasonable cap on providers, without adding costs to the system.