Michigan Court of Appeals; Docket No. 231804; Published
Judges Fitzgerald, Markey, and Murray; unanimous; per curiam
Official Michigan Reporter Citation: 257 Mich App 365, Link to Opinion 
STATUTORY INDEXING:
General / Miscellaneous [3107]
Providers Entitled to Charge Reasonable Amount for Services [3157]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous published per curiam opinion, the Court of Appeals upheld the trial court’s grant of summary disposition on plaintiff’s claim that defendant insurance companies had violated the provisions of MCL 500.3107 which requires that insurers pay “all reasonable charges incurred for reasonably necessary products, services, and accommodations for an injured person’s care, recovery, or rehabilitation.”
Plaintiffs consisted of a group of 49 individual medical providers, 2 guardians of catastrophically injured automobile accident victims, and an organization of health care providers and health care patients. Plaintiffs claimed, by way of a declaratory judgment action, that the defendant no-fault insurance companies had been unlawfully failing to pay the full and reasonable amount of their insureds’ medical bills after employing certain review companies to compare the insureds’ providers’ fees to those of other providers in order to determine what is reasonable. Plaintiffs claimed that under section 3157 of the No-Fault Act, defendants were required to compare their insureds’ health care providers’ fees for services with that providers’ fees for comparable services provided to an uninsured patient. Plaintiffs claimed that section 3157 detailed what charges the health care provider can make and specifically contained language that provided a health care giver could “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 rejected plaintiffs’ argument that 3157 provides that a charge is reasonable if it does not exceed the amount that the provider customarily charges to patients not involving insurance. The court stated that the clear and unambiguous language of 3157 simply places a maximum limit on what health care providers may charge in no-fault cases. Nowhere in that section does the Legislature indicate that a “customary” charge is necessarily a “reasonable” charge that must be reimbursed in full by the insurer. When read in harmony, section 3107 and 3157 clearly indicate that an insurance carrier need pay no more than a reasonable charge and that a health care provider can charge no more than that.
The court stated that plaintiffs may challenge a defendant’s failure to fully reimburse it for medical bills as a violation of the Act, but the plaintiff has the burden of establishing the reasonableness of the charges in order to impose liability on the insurer. Such questions are generally questions of fact for the jury.
The Court of Appeals also addressed the criterion utilized by the defendants in determining whether a particular charge was reasonable, and held it was not precluded under the plain language of the statute or Michigan case law:
“Defendants have not employed the workers’ compensation payment schedule, as was rejected in Munson, supra [Munson Medical Center v Auto Club Insurance Association, 218 Mich App 375 (1996)], to determine whether a particular charge is reasonable. Nor have defendants utilized the amounts insurers have paid for a service, as was rejected for purposes of determining a ‘customary’ charge in Munson and Hofmann [Hofman v Auto Club Insurance Association, 211 Mich App 55 (1995)]. Rather, defendants Auto Club Insurance Association (ACIA) and Review Works, for example, employ the ‘80th percentile test.’ Under this test, ACIA and Review Works recommend payment of one hundred percent of the charges as long as the charge does not exceed the highest charge for the same procedure charged by eighty percent of other providers rendering the same service. Thus, although defendants ACIA and Review Works are using a formula, that formula is based upon a survey of charges by other health care providers for the same services, a sampling of which we conclude is not prohibited by the statute for determining the reasonableness of charges for the same service.”
The court further ruled that plaintiffs had failed to establish that the defendants had intentionally committed an act of tortious interference with contract, and further, that plaintiffs had failed to establish a claim of conspiracy.
