Michigan Court of Appeals; Docket No. 177469; Published
Judges Saad, McDonald, and Chrzanowski; Unanimous; Opinion by Judge Saad
Official Michigan Reporter Citation: 218 Mich App 375; Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses: Reasonable Charge Requirement [§3107(1)(a)]
Providers Entitled to Charge Reasonable Amount for Services [§3157]
Use of Fee Schedules to Determine Reasonable Charges [§3157]
Prohibition Against Charging No-Fault Insurers More Than Uninsured Patients [§3157]
Providers May Not Charge No-Fault Insurers More Than Uninsured Patients [§3157]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
This unanimous published Opinion by Judge Saad renders very significant holdings regarding a no-fault insurer's right to utilize fee schedules to determine payment of medical expense claims under §3107(l)(a). The court held that defendant ACIA could not legally utilize the workers' compensation fee schedules to determine its liability to pay allowable medical expenses. Plaintiff Munson Medical Center billed defendant ACIA its "customary" charge for hospitalization that was consistent with the amount Munson would charge to all who used its services, regardless of whether an insurer ultimately paid the entire amount billed. Defendant ACIA refused to pay any more than the amount recoverable under the workers' compensation fee schedules. The trial court granted summary disposition in favor of plaintiff Munson and found that Munson had a legal right to payment in full of its customary charges without regard to the fact that plaintiff Munson would receive less if the charges were paid by Medicaid, Medicare, Blue Cross/Blue Shield or workers' compensation. The Court of Appeals affirmed the trial court.
In reaching its conclusion, the Court of Appeals specifically rejected defendant's argument that "customary charges" as used in §3157 of the act means the lesser amount that Munson Hospital actually accepts in full satisfaction of the bill for services rendered. The court noted that this position had been specifically rejected by the earlier opinion in Hofmann vAuto Club Insurance Association (Item No. 1787). The court stated:
"The Hofmann court specifically noted that, while health and accident carriers generally are free to place dollar limits upon the amounts they will pay to doctors and hospitals for particular services, a no-fault carrier is not. . . .Only the statutory qualification of reasonableness limits the amount that must be paid by a no-fault carrier for covered medical expenses . . . . In the instant case, AAA's proffered definition of 'customary charges' is the same one that was rejected by Hofmann . . . . As in Hofmann, AAA ignores the limitations placed upon Munson by the federal statutes governing Medicare and Medicaid, by the state statutes governing Medicaid and workers' compensation and by the contractual arrangement between Munson and BCBSM. Defendant's argument therefore fails for the same reasons it did in Hofmann."
The court also rejected defendant ACIA's argument that the charges submitted by Munson violated the provisions of §3157 because the charges exceeded "the amount the person or institution customarily charges for like products, services and accommodations in cases not involving insurance." Defendant ACIA argued that the phrase "in cases not involving insurance" means "in cases not involving non-insurance based payors." The court held that this is the not correct interpretation of the phrase. The court stated:
"It is obvious that the phrase 'in cases not involving insurance' means those situations where there is literally no insurance in the lay sense of the term -- no Medicare, no Medicaid, no BCBS, etc."
Finally, the court issued a very strong statement of policy in rejecting defendant ACIA's attempts to utilize fee schedules to determine its liability under the no-fault statute. In this regard, the court stated:
"In 1992, AAA sought passage of a referendum, Proposal D, which would have permitted AAA to pay no-fault claims according to fee schedules (and which required AAA to reduce its premiums). Proposal D was soundly rejected. Again in 1994, AAA attempted to obtain passage and approval of similar amendments, which would have expressly incorporated the worker's compensation fee schedules with an accompanying premium rollback. Again the effort was unsuccessful. Despite its failure to obtain an amendment of the no-fault law, AAA nonetheless unilaterally implemented the result it wanted. AAA's use of criteria imposed by other statutory schemes or contractual agreements is hereby rejected as a matter of law. We affirm the ruling of the circuit court."
