Michigan No-Fault Utilization Review

Editorial Board member, Katie Tucker, provides a broad overview of Michigan’s new Utilization Review.

Utilization Review General Overview

What is utilization review?

MCL 500.3157a(6) defines “utilization review” as the “initial evaluation by an insurer or the association created under section 3104 of the appropriateness in terms of both the level and quality of treatment, products, services, or accommodations provided under this chapter based on medically accepted standards.” 

What does utilization review apply to?

Utilization review only applies to “allowable expense” benefits under MCL 500.3107(1)(a), which generally include expenses for treatment, training, products, services or accommodations rendered by a provider to an auto accident victim.  Specifically, utilization review is intended to address (a) whether a provider’s treatment is appropriate; and (b) whether the cost of that treatment is appropriate.  Notably, utilization review does not apply to claims for replacement service or work loss benefits.

What governs utilization review?

Utilization review is governed by the Utilization Review Rules, which were drafted by the Department of Insurance and Financial Services (“DIFS”), pursuant to the authority vested in it by MCL 500.3157a(3).  A copy of the Rules, which were adopted by the Joint Committee on Administrative Rules (“JCAR”) in the Michigan Legislature, is available here.

Who is subject to the new Utilization Review Rules?

Insurers, the Michigan Catastrophic Claims Association, and providers.  Rule 61(m) of the new Rules broadly define a “provider” as “[a] physician, hospital, clinic, or other person providing treatment, training, products, services, and accommodations to an injured person.”

What topics are the new Utilization Review Rules intended to address?

Pursuant to MCL 500.3157a, the Rules are designed to:

• “Establish criteria or standards for utilization review that identify utilization of treatment, products, services, or accommodations . . . above the usual range of utilization for the treatment, products, services or accommodations based on medically accepted standards.” MCL 500.3157a(3)(a).
• “Provide procedures related to utilization review,” including for the following:
  • “Acquiring necessary records, medical bills, and other information concerning the treatment, products, services, or accommodations provided.” MCL 500.3157a(3)(b)(i).
  • “Allowing an insurer to request an explanation for and requiring a physician, hospital, clinic, or other person to explain the necessity or indication for treatment, products, services, or accommodations provided.” MCL 500.3157a(3)(b)(ii).
  • “Appealing determinations.” MCL 500.3157a(3)(b)(iii).

What are “medically accepted standards”?

Rule 61(1) of the new Utilization Review Rules define “medically accepted standards” as “[t]he most appropriate practice guidelines for the treatment, training, products, services and accommodations provided to an injured person.”

When did the new Utilization Review Rules become effective?

The UR Rules became effective as of December 18, 2020.  However, pursuant to Rule 62(1)(c), the Rules “apply to treatment, training, products, services, and accommodations provided after July 1, 2020, to an injured person who is insured under a policy of no-fault automobile insurance issued under chapter 31 or chapter 31A of the act . . .”

When must an insurer have a utilization review program in effect?

No-fault insurers must have utilization review program in place as of February 16, 2021.  Specifically, under Rule 66(1), “[w]ithin 60 days of the effective dates of these rules,” or by February 16, 2021, “insurers must have in place a utilization review program to review records and bills for treatment, training, products, services, and accommodations provided to an injured person that is above the usual range of utilization based on medically accepted standards.”

What requirements must an insurer’s utilization review program satisfy?

Under Rule 66(2), an insurer’s utilization review program must do all of the following:

• “Provide for bill review, including whether provider charges for treatment, training, products, services, and accommodations comply with chapter 31 of the act, MCL 500.3101 to 500.3179, and rules promulgated thereunder.”
• Make determinations regarding the appropriateness of treatment, training, products, services, and accommodations based on medically accepted standards.
• “Issue determinations under R 500.64.”

If you have any utilization review-related questions for the AutoNoFaultLaw.com Editorial Board, please submit them to autonofaultlaw@sinasdramis.com.