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A witch hunt for medical providers under the new No Fault “reform” plan

March 25, 2014 by Steven M. Gursten

Doctors, hospitals and other medical providers who treat injured auto accident victims will see more delay, denials, intimidation under House Speaker Jase Bolger’s plan


Given the “witch hunt”-nature of the provisions targeted at medical providers in Speaker Bolger’s and the House Republicans’ latest No Fault “reform” plan called Substitute for HB 4612, it’ll be a miracle if every doctor, hospital, clinic, therapist or other professional who currently treats auto accident victims won’t be scared off.

But then again, maybe that’s part of the plan!

Consider these new very intrusive and aggressive proposals in the Bolger plan.  The purpose is clearly to put medical providers on the hot seat and, unmistakably, at the mercy of auto insurance companies (page numbers refer to the full, 91-page draft bill):

  • If an auto insurer refuses to pay for a medical provider’s services on grounds that the products, services and/or accommodations were not “reasonably necessary,” the provider’s recourse is to ask that same auto insurer to “have the decision reexamined.” (Page 44)
  • Although the plan gives lip service to allowing a provider to charge what the provider “customarily charges,” that’s only true to the extent that the charge is no more than “125% of the amount that would be paid” under the Michigan Worker’s Compensation fee schedule (assuming payment is made within 30 days). (Page 58)
  • If an auto insurer determines that the service or treatment in question was “unusual treatment,” then the auto insurer “may require [the provider] to explain in writing why the unusual treatment is necessary or indicated”. (Page 58)
  • If an auto insurer “determines” the service or treatment in question is “unjustified,” then the auto insurer “is not required to pay” the provider and the provider “is liable to return to the insurer the fees or charges already collected.” Plus, the auto insurer’s “unjustified” determination triggers the Department of Insurance and Financial Services (DIFS)’s authority to “review the records and medical bills” of the provider. (Pages 58-59)
  • Auto insurers are required to conduct a “utilization review” for each of its insureds to whom the insurer has paid No Fault benefits. If the auto insurer determines that a medical provider has “improperly overutilized” or “ordered inappropriate” services or treatment, then the provider will be reported to the Department of Insurance and Financial Services (DIFS) and, possibly, disciplined.

Additionally, by accepting payment under No Fault, providers are “considered to have consented” to provide records and information to be used in the “utilization review,” and they are “considered to have agreed to comply with any decision of” DIFS concerning the insurer’s determination of improper overutilization and/or inappropriately ordered services or treatment. (Pages 59-60)

I’ve written before about how some insurance companies are already targeting doctors and medical providers who they don’t like – specifically to try to make life harder for them and to “dissuade” them from treating people injured in automobile accidents for certain types of treatment. Such treatment includes that for mild traumatic brain injury, which they feel is too expensive. On a macroeconomic level, insurance companies save untold millions of dollars by driving out many medical providers who treat these injuries by making life harder for them to receive payment.

These new proposals just finish the job.

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Michigan has a new auto No-Fault law. Click Here to learn more.