The Patient Has the Power to Hire & Fire
Insurers Do Not Have a Right to Require a Case Manager
Michigan’s no-fault law is silent regarding the involvement of case managers in the handling of no-fault PIP claims. Moreover, there are no reported Michigan appellate court decisions dealing with the use of case managers in the no-fault context. There is nothing, therefore, in either statute or case law that does any of the following:
- authorizes a no-fault insurance company to insist on the use of case managers as a pre-condition to payment of benefits;
- obligates a no-fault claimant to work with a case manager as a pre-condition to receiving no-fault benefits; or
- requires a medical provider to deal with a case manager as a pre-condition to receiving payment for medical services rendered.
Even though there is no legal authority under the Michigan No-Fault Law regarding the use of case managers, some no-fault insurance companies are leading patients to believe that they must cooperate with a case manager selected by the insurance company or run the risk of jeopardizing their claim for PIP benefits. Insurers who create this impression are misleading patients regarding their rights and obligations under the Michigan no-fault law.
Insurers May Not Require Pre-Authorization for Reasonable Medical Expenses
More disturbing, however, is the fact that auto insurance companies are, with increasing frequency, using case managers as “gatekeepers,” through whom pre-authorization for treatment must be obtained. Insurance adjusters or case managers who represent that they have the authority to require pre-authorization in order for treatment to be compensable under the no-fault statute, are engaging in conduct that is illegal.
In short, there is nothing in the Michigan no-fault statute or case law that authorizes a no-fault insurance company to require that medical treatment be pre-authorized by adjusters or case managers. Pre-authorization is simply not a part of the Michigan no-fault fee for services reparations system.
Regardless of whether pre-authorization has been sought or given, Michigan no-fault insurance companies are legally obligated to pay for all “reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery or rehabilitation”. MCL 500.3107(1)(a).
Given the clear language of the Michigan No-Fault Act, it is rather astonishing that insurance adjusters, and in certain circumstances, case managers, represent to patients and providers that medical treatment must be pre-authorized before it is compensable. In one recent case, the author obtained a copy of a letter from a no-fault insurance adjuster to a patient which contained the following statement:
“As stated, pre-certification for all testing, examinations, evaluations, or treatment modalities will be required by [X Insurance Company] for consideration of payment of benefits incurred referable to same. I want you to be clear in your understanding that your failure to obtain such pre-certification may jeopardize [X Insurance Company’s] further payment of your benefit claims. All such requests for pre-certification should be directed to my attention.”
The no-fault adjuster who wrote this letter has engaged in misrepresentation and possibly fraud. In fact, if the patient relied upon this completely inaccurate representation of Michigan law and decided to forego reasonably necessary medical treatment and, as a result, suffered a deterioration in medical condition, the adjuster who placed the patient in such jeopardy might be liable in tort pursuant to causes of action for misrepresentation, fraud, undue influence, etc. Patients and providers must understand that no-fault adjusters and case managers simply do not have legal authority to require pre-authorization for anything.
If a medical or rehabilitation provider believes that certain services are “reasonably necessary” for the patient’s care, recovery or rehabilitation, then the provider should proceed to render those services and submit the bill to the no-fault insurance company for payment. The lack of pre-authorization, even when demanded by an insurance company, is irrelevant under the language of the no-fault statute.
If patients and providers are not aware of this fact, they will be intimidated or otherwise discouraged from seeking reasonably necessary products, services and accommodations that are legally compensable under the no-fault law.