Michigan Court of Appeals; Docket #359410; Unpublished
Judges Cavanagh, Boonstra, and Riordan; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Allowable Expenses: Incurred Expense Requirement [§3107(1)(a)]
Coordination with HMO and PPO Coverages [§3109a]
TOPICAL INDEXING:
Not Applicable
SUMMARY:
In this unanimous, unpublished, per curiam decision, the Court of Appeals reversed the trial court’s denial of Defendant State Farm Mutual Automobile Insurance Company’s (“State Farm”) motion for summary disposition, in which State Farm sought dismissal of Plaintiff Shakhary Lofton’s action for No-Fault PIP benefits. The Court of Appeals held that Lofton—whose No-Fault coverage was coordinated with respect to medical expenses—could not pursue balance bills from two of his providers, because (1) the providers were not allowed to balance bill Lofton under their agreements with his health insurer, and thus Lofton did “incur” the charges which comprised the balances, and (2) because Plaintiff did not comply with the procedural requirements of his health insurance policy—i.e., that which required him to receive pre-approval or a referral before receiving various specific treatments—State Farm, as the secondary payor of Plaintiff’s medical expenses, was not required to pay for those treatments pursuant to Tousignant v Allstate Ins Co, 444 Mich 301 (1993). The Court of Appeals also held that State Farm was not required to pay for the charges Lofton incurred for various prescriptions, because there was no evidence that Lofton or his pharmacists billed Lofton’s health insurer before seeking payment from State Farm. Thus, Lofton failed to make reasonable efforts to obtain reimbursement for those prescriptions from his health insurance before seeking reimbursement from State Farm, as is required.
At the time he was injured in a motor vehicle accident, Shakhary Lofton had No-Fault insurance through State Farm, which was coordinated as to medical expenses with his Blue Care Network (“BCN”) Health Maintenance Organization (“HMO”) group health insurance plan. Under the terms of his health insurance plan, Lofton was required to first obtain a referral or preauthorization before receiving various treatments, and BCN providers were explicitly prohibited from balance billing Lofton for his treatment. After the crash, Lofton received treatment from numerous providers, including treatments from Northland Radiology Inc. (“Northland”) and Dr. Kevin Crawford which required a referral or preauthorization. Northland and Dr. Crawford submitted their bills to BCN but were apparently unsatisfied with the partial or non-payments they received from BCN on a primary basis. They thus submitted either the unpaid bills in their entirety, or the unpaid balances, to State Farm, but State Farm refused to pay as the secondary or excess insurer. Lofton then proceeded to file suit against State Farm over the bills and the balances, and State Farm moved for summary disposition, arguing that Lofton (1) failed to receive the required referral or preauthorization from BCN before receiving the specific treatments he received from Northland and Dr. Crawford, and thus, under Tousignant, State Farm was not required to pay for said treatment, and (2) did not “incur” any charges comprising the balance bills because his BCN contract explicitly prohibited Northland and Dr. Crawford from balance billing BCN participants. State Farm also moved for summary disposition as to two bills for Lofton’s prescriptions, arguing that those were never even billed to BCN, and thus State Farm was also not required to pay for them under Tousignant. The trial court ultimately denied State Farm’s motion, ruling that Lofton could pursue bills related to his treatment from Northland and Dr. Crawford, as well as the bills for his prescriptions.
The Court of Appeals reversed the trial court’s summary disposition order, holding, first, that Lofton could not pursue the bills related to his treatment from Northland and Dr. Crawford. With respect to the balance bills, the Court found that Lofton never “incurred” those charges for purposes of MCL 500.3107(1)(a), because Northland and Dr. Crawford—both of whom were BCN-network providers—were explicitly prohibited from balance billing Lofton for his treatment. With respect to Lofton’s charges that BCN denied in their entirety, the Court noted that the EOBs indicated that those charges were denied because Plaintiff failed to comply with the terms of his BCN policy before receiving the subject treatments. Therefore, under Tousignant, State Farm was not required to pay for them as the secondary or excess insurer.
“In this case, plaintiff presented the trial court with numerous EOBs issued by BCN regarding services provided by in-network providers Northland Radiology and Dr. Crawford. The vast majority of these EOBs indicate that plaintiff is not responsible for payment of any of the cost of the service provided, and further indicate that the provider was paid according to its contract with BCN. For those services, plaintiff has not established that he incurred those expenses, as he has provided no evidence that he is, or will become, liable for the balances not paid by BCN. Duckworth, 268 Mich App at 134. Further, a payment made by a health insurer under a provider agreement is a payment in full. Farm Bureau, 314 Mich App at 21. Although the provider agreements between Dr. Crawford and Northland Radiology were not provided to the trial court, neither was any evidence that BCN’s payments to them were in violation of those agreements. It was plaintiff’s responsibility to establish a genuine issue of material fact regarding his obligation to pay the balances, Quinto, 451 Mich at362, and he failed to do so. The trial court therefore erred by denying defendant’s motion for summary disposition with respect to services for which BCN had made partial payment and for which plaintiff was not liable.
Plaintiff did provide EOBs for some services that indicate that BCN had denied payment because plaintiff was not referred for those services by his primary care physician or because the services were not preauthorized. Some of those EOBs do indicate that plaintiff is liable for the expense of the service. But there was no evidence presented that BCN providers were unable or unwilling to provide the service, or that BCN deemed the services medically unnecessary. Rather, BCN denied payment of these services because the procedures of plaintiff’s BCN policy were not followed. Plaintiff therefore did not carry his burden of showing a genuine issue of material fact regarding whether those services ‘could not or would not’ be provided by a BCN provider. Tousignant, 444 Mich at 312. We hold that the trial court erred by denying defendant’s motion for summary disposition with respect to payments that had been denied for various procedural reasons, such as lack of preauthorization or referral. Quinto, 451 Mich at 362. In so holding, we stress that we do not decide the issue of plaintiff’s liability for the unpaid services; the answer to that question turns on a number of factors, including the language of the relevant provider agreements, that lack adequate factual development at this time. See Farm Bureau, 314 Mich App at 21. We only hold that plaintiff has not established a genuine issue of material fact concerning defendant’s liability for the cost of those services. Viewing this evidence in the light most favorable to the nonmoving party, the trial court erred by denying summary disposition. West, 469 Mich at 183.”
The Court of Appeals also held that State Farm was not liable for the charges Lofton incurred for his prescriptions, because there was no evidence that those bills were ever actually submitted to BCN, the primary payor. Lofton, “[t]herefore, failed to establish a genuine issue of material fact regarding whether he made reasonable efforts to obtain payments that were available from BCN in order to establish that the benefits were not payable by BCN”—a prerequisite to seeking payment from State Farm, as the coordinated No-Fault insurer.
“In this case, plaintiff sought reimbursement for bills from MBM, totaling $14,577.35, and AutoRx, totaling $313.27. Regarding MBM, there is no evidence that plaintiff or MBM made any effort to file a claim with BCN before plaintiff filed suit. It appears that, after defendant filed its motion for summary disposition, MBM subsequently filed a number of claims with BCN, to which BCN invariably responded that the claims ‘could not be processed’ because BCN was unable to process the provider information. Plaintiff provides no evidence of any efforts, much less reasonable ones, that he took to obtain payment for those services from BCN. St John Macomb-Oakland Hosp, 318 Mich App at 264. Moreover, it is unclear from the record that BCN actually denied payment of MBM’s claims; in its letters dated September 3, 2021, BCN merely stated that it could not process the claims and asked for more information. Finally, as noted, plaintiff has failed to address the AutoRx claim at all.
Therefore, plaintiff failed to establish a genuine issue of material fact regarding whether he made reasonable efforts to obtain payments that were available from BCN in order to establish that the benefits were not payable by BCN. When the nonmoving party fails to establish the existence of a genuine issue of material fact, summary disposition is properly granted under MCR 2.116(C)(10). West, 469 Mich at 183.”
