Michigan Court of Appeals; Docket No. 208568; Unpublished
Judges Gage, White, and Markey; Unanimous; Per Curiam
Official Michigan reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
State Workers Compensation Benefits [§3109(1)]
TOPICAL INDEXING:
Workers Disability Compensation Act (MCL 418.1, et seq.)
CASE SUMMARY:
In this unanimous per curiam unpublished Opinion, the Court of Appeals held that an action by a no-fault insurer seeking reimbursement from a workers' compensation insurance carrier for medical expenses that the no-fault carrier had paid was limited by the "cost-containment" provisions of the Workers' Disability Compensation Act, MCLA 418.315, and thus, Auto-Owners was not permitted to seek reimbursement of the full amount of medical expenses that it had previously paid on behalf of the injured party.
In this case, Harry Eversman was injured while on a work assignment. His employer and its workers' compensation benefits insurance company, Transamerica, refused to pay workers' compensation benefits on the basis that Eversman was not injured in the course of his employment. Because the accident occurred while Eversman was operating a motor vehicle, a claim was filed on his behalf seeking no-fault insurance benefits, including medical expenses. Auto-Owners, the no-fault carrier, paid medical expense payments pending the resolution of the workers' compensation claim. Ultimately, the workers' compensation claim resulted in the determination that the injury did arise out of Eversman's employment, and therefore, an order awarding benefits was entered. Auto-Owners, the no-fault insurance carrier, filed a claim seeking reimbursement from the workers' compensation benefits award. Transamerica, the workers' compensation carrier, contended in that action that its liability for payment of medical expenses was limited by the Workers' Disability Compensation Act cost-containment rules as authorized by MCLA 418.315.
Auto-Owners claimed that section 315 of the Workers' Compensation Disability Act establishes a statutory scheme that contemplates the application of the cost-containment provisions only where the workers' compensation carrier promptly and directly furnishes or causes to be furnished to the injured employee all of the reasonable services and treatment contemplated in the act. Further, Auto-Owners contends that common law principles of subrogation dictate that an insurer paying reasonable expenses on behalf of the employee is entitled to reimbursement for reasonable expenses where it is later determined that the employer is liable for medical services.
In rejecting Auto-Owners' arguments, the Court of Appeals held that the statutory cost-containment language contained no exception for the circumstance where the medical expenses were paid on behalf of the employee by the no-fault insurance carrier. Under the cost-containment provisions, reimbursement is only required to the extent of required payments under the Workers' Compensation Act. The cost-containment rules limit the amount of required payments under the act, and therefore, logically establish the amount of reimbursement. The Court of Appeals also rejected Auto-Owners' argument that subrogation principles apply. Auto-Owners is subrogated only to the employee's rights, and if the employee does not pay for the services directly, there is no right in the employee to complete reimbursement, without regard to cost-containment, for the insurer to assert by way of subrogation.
The court also noted that the result was consistent with both the Workers' Disability Compensation Act and the No-Fault Act. Auto-Owners' claim for reimbursement stems from section 3109 of the No-Fault Act. This section provides that benefits required to be provided under the WDCA shall be subtracted from no-fault benefits otherwise payable by plaintiff. The court noted that in Munson Medical Center v Auto Club Insurance Association, 218 Mich App 375,390; 554 N W2d 49 (1996), "this Court held that no-fault carriers are not entitled to invoke the cost-containment provisions of the WDCA and may not limit reimbursement to medical providers according to the workers' compensation scheme." Thus, the court held that Auto-Owners' liability for medical expenses provided to Eversman was determined by the reasonableness standard of the No-Fault Act. The amount to be subtracted from the benefits owing under the No-Fault Act is then determined by reference to the WDCA, including the cost-containment provisions of section 315.
