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What's behind the insurance industry's attack on Michigan doctors?

Insurance attorney goes beyond the auto insurance industry spin blaming doctors for high No-Fault insurance costs

Doctors that provide necessary medical treatment for auto accident injury victims are now being targeted by the Michigan insurance industry. As of now, the powerful medical lobby has yet to take on the insurance industry allegations. But it’s an important issue that people need to be aware of, and if the insurance industry has its way (to further boost record-breaking insurance company profits in this state), the quality and care of medicine for thousands of auto accident victims will suffer.

There is a proposal to regulate medical fees in auto accident cases, and it’s part of a package of pending Senate bills aiming to destroy Michigan’s No-Fault system.

As an insurance lawyer in Michigan, I believe the proposal to cap fees for doctors treating car accident victims should be opposed. The proposal to cap fees reeks of hypocrisy: Michigan auto insurance companies have successfully defeated governmental attempts to regulate the price of auto insurance for decades, even though the government requires drivers to purchase No-Fault insurance.

But now, the same insurance industry is asking its Republican allies in the Michigan Legislature to regulate the prices charged by another industry – the doctors who provide care for accident victims.

Why? Because regulation of doctors and hospitals that provide care under the No-Fault Act to auto accident victims will significantly boost the profits of the Michigan auto insurance companies.

Limiting fees that Michigan doctors can charge for treating car accident victims?

In Senate Bill 0294, Michigan’s auto insurance industry through its advocate-lawmakers, proposes limiting the fees that doctors can charge and bill to No-Fault insurance companies for medical treatments and services provided to auto accident victims.

Under the bill, doctors’ charges to auto insurance companies would be limited to the amounts specified in a predetermined medical fee schedule. The fee limit would apply to such medical treatments and procedures as:

o Surgery
o Radiology
o Hospitalizations
o Mental health services
o Hearing and vision services
o Home health services
o Medical equipment
o Medical supplies
o Orthotics
o Prosthetics
o Dental services
o Medications
o Occupational therapy
o Physical therapy.

The insurance industry’s smear campaign against Michigan doctors

If the facts and data actually supported the allegations being made, I would support it. But as of yet, these are only blanket assertions made by lobbyists without any factual support. The auto insurance industry insists regulation is necessary because doctors are “defrauding” the insurance system in Michigan with padded bills and charges for expensive, but unnecessary and ineffective procedures, which is forcing auto insurance companies to pay out more money (than they want to) on medical claims filed by car accident victims.

Consider the following ridiculous and shameful accusations made against doctors who treat seriously and catastrophically injured auto accident victims:

o The American Insurance Association has said that “fraudulent activities and claim-padding abuse” by doctors and medical providers is possible under an “unlimited No-Fault benefit system” such as Michigan’s.

o The Insurance Research Council has accused doctors and medical care providers who treat seriously and catastrophically injured auto accident victims in Michigan and other states of committing “claim fraud” (“material misrepresentation of the facts of a loss”) and “claim buildup” (“inflation of an otherwise legitimate claim, such as through unnecessary medical treatments and diagnostic procedures”).

o Moreover, the Insurance Research Council has also accused doctors of “reacting to cost pressures … by increasing their charges to auto injury insurers.” The Rand Institute for Civil Justice has made similar allegations.

Even former Michigan Insurance Commissioner D. Joseph Olson has joined the smear campaign against doctors and medical care providers who treat seriously and catastrophically injured Michigan auto accident victims.

In a paper he co-authored last year, Olson stopped just short of blatantly accusing doctors of defrauding No-Fault insurance companies.

“When an individual suffers an injury [in a Michigan auto accident] and the insurance company must pay all — or nearly all — medical costs, both the injured party and those who are delivering treatment will have every incentive to choose very expensive treatments even if the added value of those treatments is small. … Given the incentives by medical care providers to use expensive treatments, it is a problem that the state has no constraints on costs, such as medical fee schedules …”

What goes unmentioned in those attacks is that they are not backed up with actual, real-world examples in Michigan.

The Insurance Institute of Michigan, which is the voice of the state’s insurance industry, provides no evidence on its website of a widespread crisis on the scale that might begin to justify the bill targeting Michigan doctors.

In fact, in the “Insurance-related crime” section of the Insurance Institute of Michigan’s 2010 IIM Fact Book, there is no mention of the so-called “No Fault-defrauding-doctors” epidemic, let alone a single example.

Steven Gursten is recognized as one of the nation’s top insurance attorneys handling serious auto accident lawsuits. He writes about insurance company abuse and the Michigan No-Fault laws, and is available for comment.

– This blog was written by Steven Gursten and Todd Berg, esq.

Related information:

Allstate must pay $21 million for defaming doctor

Allstate won’t be targeting Michigan doctors who help car accident victims

Three potential cases for Michigan auto accidents

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights to better serve you. Call (800) 777-0028 for a free consultation with one of our No-Fault insurance attorneys.

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