Michigan Court of Appeals; Docket #349944 Unpublished
Judges Gadola, Sawyer, and Riordan; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Allowable Expenses: Incurred Expense Requirement [§3107(1)(a)]
In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order dismissing Plaintiff Kara Peters’s first-party action against Defendant Auto Club Insurance Association (“Auto Club”). Primarily at issue in this case was a billing statement from Peters’s medical providers which indicated an outstanding “insurer balance” of $83,855.20, but an outstanding “patient balance of “$-.” The trial court held this billing statement to mean that Peters had not “incurred” any charges for purposes of the no-fault act, because she had not been billed directly. The Court of Appeals reversed the trial court’s ruling, holding that Peters “incurred” the charges from her providers at the moment she accepted treatment, “even if payment was expected from an insurer rather than from [Peters],” as was perhaps suggested by the aforementioned billing statement.
Peters was injured in a motor vehicle collision while traveling as a passenger in a vehicle owned by Auto Club’s insured. She received treatment thereafter from Insight Physical Therapy and Neuro Rehab Center (“Insight”), a portion of which was mistakenly paid by Medicaid and not Auto Club. Peters then filed a first-party action against Auto Club, arguing that it had failed to pay the PIP benefits to which she was owed. Auto Club moved for summary disposition, arguing that Peters had not “incurred” any charges for purposes of the no-fault act. In support of its argument, Auto Club adduced an invoice from Insight which set forth an “Ins Bal” of $83,855.20, and a “Pt Bal” of “$-.” The trial court ruled that the balance amounts set forth in the invoice indicated that the Insight bill was not an obligation of Peters—“ ‘[i]n other words, it wasn’t incurred’ ”—and therefore not an obligation of Auto Club. As a result, it granted Auto Club’s motion for summary disposition.
The Court of Appeals reversed the trial court’s summary disposition order, holding preliminarily that “charges for healthcare . . . are ‘incurred’ when a person injured in a motor vehicle accident becomes liable for them by accepting medical treatment or service, even if the treatment or service is covered by an insurer.” In this case, Peters “incurred” the charges set forth in the invoice at the moment she accepted treatment, and the fact that the billing statement suggested that Insight expected payment from an insurer, as opposed to from Peters directly, did not mean that Peters did not “incur” them.
"In this case, Auto Club argued that the Insight billing statement demonstrated that plaintiff was not being charged for the services, and therefore the services had not been ‘incurred.’ The trial court agreed and granted Auto Club summary disposition regarding the Insight charges. The trial court found that ‘[t]here is no admissible proof . . . that plaintiff was ever billed directly for the Insight PT and Neuro Rehab expenses.’ The trial court also observed that when a healthcare provider accepts payment from a health insurer as payment in full, the charges incurred by the injured party are limited to the reduced amount accepted by the provider. See Bombalski v Auto Club Ins Assoc, 247 Mich App 536, 546; 637 NW2d 251 (2001). Here, however, the only evidence presented to support Auto Club’s contention that plaintiff had not incurred the charges was the Insight billing statement. The Insight billing statement states the charges amount as $95,791.20, payments as $1,376.53, adjustments as $10,559.47, ‘PT bal’ as $-, and ‘Ins Bal’ as $83,855.20. The billing statement, however, does not demonstrate that Insight did not expect to be paid in full for the invoiced amount, nor that Insight accepted the Medicaid payment as payment in full for services provided to plaintiff.
Auto Club asserts that if Insight intended to seek payment from plaintiff, it would not have listed the patient balance as zero on the billing statement, but would have listed both the patient balance and the insurance balance as $83.955.20. The billing statement, however, does not demonstrate that Insight was not seeking payment for the services provided to plaintiff; rather, viewed in the light most favorable to plaintiff, the billing statement suggests that Insight expected payment for the services billed, albeit from an insurer. The Insight charges thus were ‘incurred’ by plaintiff when she was treated, even if payment was expected from an insurer rather than from plaintiff. See Clark, 309 Mich App at 397. Whether Insight thereafter accepted the payment by Medicaid as payment in full for services provided to plaintiff is not demonstrated by the billing statement, and thus, on the record before us a genuine issue of material fact exists on which reasonable minds could differ."