Michigan Court of Appeals; Docket No. 161583; Published
Judges Shepherd, Taylor, and Gotham; Unanimous; Opinion by Judge Taylor
Official Michigan Reporter Citation: 207 Mich App 402; Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses: Reasonable Charge Requirement [§3107(1)(a)]
Balance Billing Patients for Amounts Not Covered by Other Insurance [§3157]
Prohibition Against Charging No-Fault Insurers More Than Uninsured Patients [§3157]
TOPICAL INDEXING:
Legislative Purpose and Intent
CASE SUMMARY:
In this unanimous published Opinion by Judge Taylor, the Court of Appeals affirmed the trial court entry of summary disposition for defendants in an action in which plaintiffs' claim that the defendant auto insurers were obligated to pay the full amount of medical expenses billed by the health care providers, and that the health care providers wrongfully were utilizing the workers' compensation payment schedules to determine the reasonable payment due for the services provided.
In this case, the Court of Appeals affirmed the trial court determination that there was no actual controversy because the no-fault insurance companies had agreed to defend and indemnify the plaintiffs from any action by their health care providers for collection of the unpaid amounts.
Plaintiffs in this case were insureds under no-fault automobile insurance policies. As a result of separate automobile accidents, the plaintiffs incurred hospitalization and medical treatment expenses. Although the automobile insurance companies acknowledged their duty to pay for plaintiffs' treatment expenses, they declined to pay the billed amount, asserting that the amounts billed were unreasonable. The automobile insurers paid plaintiffs' health care providers amounts which they considered reasonable, but declined to pay the balances. Plaintiffs, claiming to be a class, asserted that they were at risk of being sued by their health care providers for the balance of their bills as a result of defendants' failure to pay in full.
The Court of Appeals, in affirming the trial court determination that there was no actual controversy because plaintiffs had not sustained pecuniary loss, noted that the health care providers involved had not sued plaintiffs for the outstanding balance on their bills. Additionally, defendants had made repeated assurances that they would defend and indemnify plaintiffs if the health care providers did sue. Further, the defendant automobile insurers had also promised that they would attempt to protect plaintiffs from bad credit ratings in the event that the health care providers pursued collection actions directly against plaintiffs.
The Court of Appeals held that the automobile insurers were not required to pay the full amount billed, but rather, were only required to pay those amounts which were reasonable in accordance with §3107 of the no-fault act Further, the court held that the provisions of MCLA 500.3157 provides support for the conclusion that medical care providers are prohibited by law from charging more than a reasonable fee, and the automobile insurers need pay no more than a reasonable charge for the services. MCLA 500.3157 provides the following with regard to the expense of treatment for automobile accident related injuries covered by personal injury protection insurance:
"[The provider]... may charge a reasonable amount for the products, services and accommodations rendered. The charge shall not exceed the amount the person or institution customarily charges for like products, services and accommodations in cases not involving insurance."
The Court of Appeals noted further mat the automobile insurers are required by a recent interpretative statement issued by the Insurance Commissioner (Michigan Department of Commerce, Insurance Bureau Bulletin 92-03,10-23-92) to provide insureds and claimants with complete protection from economic loss for benefits provided under "personal protection insurance." Since plaintiffs are protected from incurring damages as a result of defendants' payment of less than the full amount billed by plaintiffs' health care providers, the court held that there was no case or controversy and, therefore, the circuit court lacked subject matter jurisdiction to enter a declaratory judgment.
