Michigan Court of Appeals; Docket #351422; Unpublished
Judges Riordan, O’Brien, and Swartzle; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
When PIP Claims Through the Assigned Claims Facility May Be Reduced by Benefits from Other Sources [§3172(2)]
TOPICAL INDEXING:
Not Applicable
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s denial of the defendant Farmers Insurance Exchange’s (Farmers) motion for summary disposition, and remanded for entry of summary disposition in Farmers’ favor. The plaintiff, Victor Oliver, had medical insurance, but not automobile insurance, at the time of the subject motor vehicle crash, and applied for no-fault PIP benefits through the Michigan Assigned Claims Plan (MACP), who in turn assigned his claim to Farmers. The Court of Appeals held that Farmers was not liable for payment of the medical charges in question, however, because pursuant to MCL 500.3172(2), “PIP benefits payable through the assigned claims plan ‘shall be reduced to the extent that benefits covering the same loss are available from other sources’”—i.e. Oliver’s mother’s health insurer.
Oliver was injured in a motor vehicle crash while operating an uninsured vehicle that he did not own. He later filed a claim for PIP benefits through the MACP, and the MACP assigned his claim to Farmers, who ultimately denied payment of PIP benefits to Oliver. Oliver filed the underlying action against Farmers in response, and one of his medical providers ZMC Pharmacy, LLC (ZMC), sought and received permission to intervene. ZMC provided Oliver with more than $21,000 in prescription medications, and argued that Farmers had unreasonably refused to pay the charges Oliver incurred for those medications. Farmers moved for summary disposition, arguing that because Oliver was covered under his mother’s health insurance plan with Blue Cross Blue Shield at the time of the collision, and because Oliver’s health insurance covered prescription medications, MCL 500.3172(2) operated to reduce any amounts owed in PIP benefits “to the extent that benefits covering the same loss are available from other sources.” In essence, Farmers argued that it was not liable for the prescription medications charges because MCL 500.3172(2) is a coordination scheme and entitled it to offset any amounts owed in PIP benefits by any amounts available from Blue Cross Blue Shield. ZMC argued, in response, and in reliance on the Court’s previous decision in Spencer v Citizens Ins Co, 239 Mich App 291 (2000), that Farmers was liable for payment of the outstanding charges, and that Farmers could seek potential reimbursement from Blue Cross afterward. Ultimately the trial court denied Farmers’ motion
On appeal, Farmers argued that the trial court erred in denying its motion for summary disposition, and the Court of Appeals agreed. In reversing the trial court’s denial, the Court of Appeals distinguished this case from Spencer, noting that although Spencer featured a similar scenario, it did so in the context of two no-fault insurance carriers. Thus, “[i]n that context, the assigned insurer must pay the PIP benefits and seek reimbursement from the higher priority no-fault insurer.” Spencer did not, however, speak to a scenario involving a no-fault insurer and a health insurer, and in this case, since prescription medications were clearly covered under the Blue Cross Blue Shield policy, MCL 500.3172(2) language providing that, “[PIP] benefits . . . payable through the assigned claims plan shall be reduced to the extent that benefits covering the same loss are available from other sources,” operated to reduce Farmers’ obligation to pay Oliver’s outstanding balance with ZMC to zero.
This Court has unequivocally held that MCL 500.3172(2) is a coordination statute. “‘[B]enefits through the assigned claims carrier are coordinated under MCL 500.3172(2).’” George v Allstate Ins Co, 329 Mich App 448, 451; 942 NW2d 628 (2019), quoting Batts, 322 Mich App at 282. Because it is a coordination statute, “under MCL 500.3172(2), an insurer providing benefits under the assigned-claims plan is generally entitled to a setoff for any other benefits covering the same loss that are received by or on behalf of the injured party. The only statutory exception to the right to a setoff is if the benefits covering the loss are received under either Medicare or Medicaid.” Id. at 452 (emphasis in original).
ZMC relies on this language to support its argument that Farmers, as the assigned-claims insurer for Oliver’s PIP claim, cannot refuse to pay plaintiff’s PIP benefits because it discovered that benefits covering the same loss were available from another source. The fault in ZMC’s argument is that Spencer involved a dispute regarding which of two no-fault insurance carriers was higher in line of priority for payment of the plaintiff’s PIP benefits. In that context, the assigned insurer must pay the PIP benefits and seek reimbursement from the higher priority no- fault insurer. Id. at 305-306. In contrast, the present case does not involve two no-fault-insurance carriers; the question is how an assigned insurer must proceed when it discovers that benefits covering the same loss are available from another benefit source other than a higher priority no- fault insurer. In this case, the other benefits source is a health-insurance carrier, not a no-fault- insurance carrier. Spencer, which controls when two no-fault insurers dispute which is the higher priority no-fault insurer, does not control on the present facts and does not mandate a ruling in ZMC’s favor.
