Statutory Time Limitations Applicable to No-Fault Claims
The No-Fault Act contains two very strictly enforced time limitations for processing claims for no-fault PIP benefits. These rules must be carefully followed in order to properly protect the claim. Failure to observe these procedures and limitations can result in a loss of benefits. These two important rules are summarized below.
The One-Year-Notice Rule
Section 3145 of the No-Fault Act specifies that a plaintiff must provide written notice to the appropriate insurance company within one year of the date of the accident. This notice must include the name and address of the claimant/injured person as well as the time, place, and nature of the injury. Failure to provide this notice within the one-year period will result in the complete forfeiture of the claim unless some legally recognized exception applies.
The One-Year-Back Rule
Assuming written notice has been given to the insurance company within the first year of the accident, a claimant must be prepared to take legal action if a particular expense is not paid by the insurance company within one year of the date the expense is incurred. If legal action is commenced, the claimant may not recover benefits for any portion of the expense incurred more than one year before the legal action was commenced, unless some legally recognized exception applies. This rule is contained in Section 3145(2).
Former Exceptions to the Statutory Time Limitations
Minors and Mentally Incompetent Persons
For many years, Michigan appellate case law recognized an important exception to the one-year-back rule in cases brought by minors or mentally incompetent persons. The courts held that because of certain provisions in the Michigan Revised Judicature Act (MCL 600.5851), neither the one-year-notice rule nor the one-year-back rule applied to claims brought by minors or those who were mentally incapable of comprehending their legal rights.
In the case of Cameron v ACIA, 476 Mich 55 (2006), the Michigan Supreme Court overturned all of this earlier law and ruled that there was no exception to the enforceability of the one-year-back rule for minors or mentally incompetent persons. Therefore, that portion of the claim incurred by the minor or mentally incompetent person more than one year from the date suit was filed was declared unenforceable by the Cameron decision.
On July 31, 2010, the Michigan Supreme Court overruled its decision in Cameron v ACIA in the case of University of Michigan Regents v Titan, 487 Mich 289 (2010). In this decision, the Court held that Cameron was wrongly decided, and therefore, the one-year-back rule is not applicable to bar the claims of minors and mentally incompetent persons. The decision was a victory for minors and mentally incompetent persons.
Unfortunately, the victory in University of Michigan Regents was short-lived. In the 2012 Michigan Supreme Court decision of Joseph v Auto Club, ____ Mich ____ (2012), the Court overturned the Michigan Regents decision and reinstated its previous holding from Cameron. In so holding, the Court determined that the one-year-back rule was not a statute of limitations, but rather was a limitation on damages. As such, it was not subject to the tolling provisions of the Revised Judicature Act for minors and mentally incompetent persons.
Therefore, insurance companies may not be forced to pay expenses incurred more than one year prior to filing suit, even if those expenses were incurred by minors or mentally incompetent persons.
Bill Submission
For many years, Michigan appellate case law recognized another exception to the one-year-back rule. This exception applied to suspend the running of the one-year-back rule from the date an insurance company received a request for payment of a particular expense until the date the insurance company formally denied payment of that particular expense. In other words, the Michigan appellate courts held that the one-year-back rule did not run during the time that a no-fault insurance company was considering whether it was going to pay or not pay the claim.
Unfortunately, however, the cases which recognize this “bill submission” exception to the one-year-back rule were specifically overruled by the Michigan Supreme Court in the case of Devillers v ACIA, 473 Mich 562 (2005). Therefore, under the Devillers case, unless some other legal exception applies, payment of a no-fault claim can only be enforced if a lawsuit is filed within one year of the date the expense in question is incurred.
Moreover, in the case of Community Resource Consultants v Progressive, 480 Mich 1097 (2008), the Court held that for purposes of applying the one-year-back rule, an expense is deemed to be incurred on the date the services are actually rendered. Therefore, patients and providers can no longer rely upon the “bill submission” exception to the one-year-back rule and must move quickly to enforce their legal rights.