Michigan Court of Appeals; Docket No. 227400; Published
Judges Owens, Markey and Murray; unanimous
Official Michigan Reporter Citation: 251 Mich. App. 260, Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses: Reasonable Necessity Requirement [3107(1)(a)]
Coordination with HMO and PPO Coverages [3109a]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous published opinion by Judge Murray, the Court of Appeals addressed an issue of first impression regarding the right of a no-fault patient with coordinated no-fault coverage and HMO coverage to hold the no-fault carrier responsible for medical services obtained “out of network.” This was an issue originally addressed by the Michigan Supreme Court in Tousignant v Allstate Insurance Company [Item No. 1630]. In this particular case, the plaintiff was insured by an HMO that did not offer chiropractic services. The HMO did, however, offer physical therapy services which it recommended that plaintiff receive. Plaintiff, without exhausting the available physical therapy or other medical treatments offered by the HMO, decided, without HMO approval or referral, to treat with a chiropractor. In light of the fact that the chiropractic services were not covered by the HMO plan, plaintiff submitted the chiropractic expenses to plaintiff’s no-fault insurer, Defendant Farmers. Farmers refused to pay the expenses on the basis of the Tousignant opinion.
The Court of Appeals rejected defendant’s argument and held that when medical care services are not offered by the HMO and the services are otherwise “reasonably necessary” within the meaning of section 3107(1)(a) of the No-Fault Act, the no-fault insurer must pay for the cost of the services even when the insured did not exhaust other available medical treatments offered by the HMO. In so holding, the court stated that the Tousignant decision does not resolve the issue before the Court because the Tousignant case repeatedly emphasized that it was only addressing the situation where the patient utilized the services of an “out of network” medical provider when the same services were actually available under the patient’s HMO plan. In that situation, the Tousignant court held that a no-fault insurer was not liable for medical expenses that the patient’s HMO carrier “is required, under its contract, to pay for or provide.” The Tousignant case also noted that the facts in that case did not allege that the necessary medical care was “unavailable or of inadequate quality” at the HMO facility. Therefore, where the chiropractic services sought by plaintiff were not available or required to be provided by the HMO, plaintiff was entitled to pursue that treatment and submit the related expenses to the no-fault insurer, assuming the expenses were otherwise recoverable under the Act. In this regard, the court stated:
“a party who holds a contract containing a coordinated benefits clause is required first to utilize the health care provider for services offered by that health care provider, but is able to seek reimbursement for ‘allowable expenses’ that were not contractually required to be provided by the health care provider. In other words, because the services received by plaintiff were not required by contract to be provided by defendant, they were not subject to the coordination of benefits clause.”
The court then remanded the case to the lower court to determine whether the chiropractic services obtained by plaintiff were “reasonably necessary services” within the meaning of section 3107(1)(a). That was an issue that should be resolved by the trier of fact and if it is resolved in favor of plaintiff, then defendant Farmers is liable to pay the expenses.
