Michigan Court of Appeals; Docket # 335656; Published
Judges Jansen, Cavanagh and Cameron; Unanimous Opinion by Judge Cavanagh
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Coordination with Other Health and Accident Medical Insurance [§3109a]
When PIP Claims Through the Assigned Claims Facility May Be Reduced by Benefits from Other Sources [§3172(2)]
Procedures Applicable to Disputes Between Two or More Insurers [§3172(3)]
Obligation of Assigned Insurer to Pay Claim Promptly [§3175(1)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous published opinion by Judge Cavanagh, the Court of Appeals held the trial court properly denied Defendant Titan Insurance Company (“Titan”) motion for summary disposition, finding that Titan was required to pay Plaintiff William Batts’ (“Batts”) PIP benefits and defendant’s reasons for refusing to do so were unreasonable.
Batts, a military veteran, was injured when the motor scooter he was riding struck a vehicle that failed to stop at a stop sign. The vehicle was not identified. Batts was treated for his injuries through the Veterans Administration (VA) and non-VA medical providers, including Serenity Personal Care, an assisted-living facility. Batts did not have no-fault insurance, nor did he have a policy available to him through a resident relative. Thus, Batts filed a claim with the Michigan Assigned Claims Plan, which assigned his claim to defendant-Titan Insurance Company. Titan refused to pay benefits on the ground that Batts was entitled to healthcare benefits through the VA. Batts filed this action, seeking no-fault coverage. Titan moved for summary disposition, arguing that Batts, as a military veteran, had health “insurance” through the VA system and this system was similar to an HMO in that Batts was required to receive medical treatment from the VA. Therefore, Titan asserted that, under the coordination of benefits provision of MCL 500.3109a, it was not liable for the cost of Batts’ medical care outside the VA system. Titan also maintained that, because benefits through an assigned claims carrier are coordinated under MCL 500.3172(2) and Batts had healthcare coverage through the VA, it was not liable for Batts’ medical expenses. Batts responded by moving for summary disposition, arguing the VA is not a health insurance company but, rather, is a medical provider of last resort for veterans unless they have a service-connected injury. Batts asserted that 38 USC §1729 says the VA is not an “insurer” because it grants the federal government the right to be reimbursed for the cost of medical care provided to veterans for non-service-related injuries. Specifically, Batts maintained that 38 USC §1729 states that, when a veteran receives medical care for non-service-connected injuries in a motor vehicle accident, no law of any state and no contract provision shall prevent recovery by the United States for the care or services furnished to the veteran. The trial court denied defendant’s motion for summary disposition.
The Court of Appeals affirmed the denial of summary disposition for Titan and also held that Batts’ motion for summary disposition should have been granted. According to the Court, Batts was not required to seek and receive all his medical treatment through the VA system.
In making its ruling, the Court of Appeals examined the trial court’s findings, noting that Titan had to make prompt payment under MCL 500.3172(3)(b) and MCL 500.3175(1). However, Titan alleged that pursuant to the coordination of benefits provision in §3109a, it was not responsible for medical expenses incurred by Batts either inside or outside the VA system. Section 3109a states: “An insurer providing personal protection insurance benefits under this chapter may offer, at appropriately reduced premium rates, deductibles and exclusions reasonably related to other health and accident coverage on the insured.”
Looking to the language of §3109a, the Court of Appeals said it clearly refers to “coordinated” policies – that is, policies that coordinate the insured’s no-fault and health insurance coverage in exchange for a reduced insurance rate. Under coordinated policies, the Court explained, the no-fault insurer is only liable for medical expenses incurred for care or services not available from the insured’s health insurer, which is the primary insurer. However, because Batts in this case had not purchased a no-fault policy, §3109a did not apply. Accordingly, the Court found that Titan’s arguments based on Tousignant v Allstate Ins Co, 444 Mich 301 (1993), and Owens v Auto Club Ins Ass’n, 444 Mich 314 (1993), were without merit. Both of those court decisions involved no-fault policies with coordinated benefits as allowed by §3109a, the Court observed. Therefore, to the extent the trial court held that Batts’ claim was subject to §3109a, but that Batts was still entitled to recovery because the medical services were unavailable from the VA, the Court found the trial court’s decision was erroneous because §3109a was inapplicable.
The Court of Appeals continued by rejecting Titan’s claim that Batts’ eligibility to receive healthcare services through the VA constituted a “benefit source” that relieved Titan of its obligation to pay. The Court said:
“[B]ecause the VA system, like private hospitals and medical facilities, does not provide free medical services to veterans for nonservice-related injuries, entitlement to seek medical services from the VA cannot be deemed a ‘benefit source’ that relieved defendant of its obligation to pay PIP benefits to plaintiff.”
In conclusion, the Court of Appeals further rejected Titan’s argument that it was entitled to a set-off against federal benefits to which Batts was entitled. According to the Court, because the United States is entitled to reimbursement for all medical services provided to Batts, a military veteran, Titan was not entitled to a set-off for the medical services provided to Batts by the VA for his accident-related injuries.
Based on the foregoing, the Court of Appeals affirmed the trial court’s denial of summary disposition for Titan and remanded for entry of an order granting summary disposition for Batts.
