Michigan Supreme Court; Docket #124639; Published
3-3 (Justices Kelly, Cavanagh and Weaver concurring); memorandum opinion
Official Michigan Reporter Citation: 472 Mich App 91, Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses: Reasonable Charge Requirement [3107(1)(a)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this short 3-3 memorandum opinion, the Michigan Supreme Court affirmed the lower courts’ determination that insurance companies are entitled to audit medical charges and pay only those determined to be reasonable. The Court further held that it is a question of fact whether a customary charge is also reasonable.
Chief Justice Taylor, joined by Justices Corrigan and Markman, affirmed in all respects but did not state anything specific regarding the concept of medical bill auditing, the 80th percentile method approved in the Court of Appeals decision, or the admissibility of audit results.
Justice Cavanagh, joined by Justices Kelly and Weaver, also affirmed, but specifically limited their affirmance as follows:
“Although I agree also with the Court of Appeals conclusion that ‘reasonable’ and ‘customary’ are two separate inquiries, I view its reference to the 80th percentile test, given this record, as dicta. Given that the question of reasonableness was not before the lower courts, and, consequently, discovery did not center on the question, I would be apprehensive about sanctioning any method without knowing its full details. I agree with the Court of Appeals concurrence that urged our Legislature to address this issue and implement some guidelines in this area, as other no-fault states have done.”
It is important to note that all six Justices agreed that the question of whether a medical service provider’s charge is “reasonable” is separate and apart from whether the charge is “customary.” In other words, simply because the service provider charges its customary charge, does not mean that the charge is reasonable within the meaning of § 3107(1)(a) of the Michigan No-Fault Act.
