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BREAKING NEWS: Senate Republicans streamline No Fault strategy with new proposed law

May 8, 2015 by Steven M. Gursten

SB 313 focuses on ‘price controls’ on what doctors and hospital charge for treating car accident victims; no changes/restrictions on PIP benefits

Sen. Marty Knollenberg (R-Troy)
Sen. Marty Knollenberg (R-Troy)

Trial and error has made Senate Republicans smarter about how they try to change Michigan’s No Fault insurance law.

After ramming their No Fault plan (Senate Bill 248) through the Senate only to see it founder before the full House of Representatives, the Senate Republicans are refining their approach.

Case in point is Senate Bill 313, the Senate Republicans’ second-round No Fault plan, which was introduced by Sen. Marty Knollenberg (R-Troy) on May 5, 2015.

The new bill has none of the ugliness associated with its predecessor, SB 248.

SB 313 is a streamlined No Fault plan, which uses surgery-like precision to go after the one elusive item that has topped the auto insurance industry’s No Fault “wish list” for years:

Price controls on what doctors and hospitals can charge under No Fault for treating and medical care of people injured in car crashes.

Nevertheless, as different as the two bills are, they’re similar in one particularly glaring omission:

Neither SB 313 nor SB 248 (both the Senate-introduced and the Senate-passed versions) do anything to guarantee any type of meaningful savings on auto insurance for consumers.

Specifically, here are the “price controls” that SB 313 proposes:

  • Doctors/hospitals treating car crash victims who are covered by No Fault “must be reimbursed a reasonable amount” for their services and treatment.
  • Doctors/hospitals treating car crash victims who are covered by No Fault “must not be reimbursed an amount that exceeds the amount the person or institution is customarily reimbursed for like products, services, and or accommodations.” [Emphasis added]
  • Doctors/hospitals treating car crash victims who are covered by No Fault “shall not seek reimbursement in an amount that exceeds the amount the person customarily is paid for rendering like treatment” to non-car crash victims. [Emphasis added]
  • If a car crash victim’s health insurance company has been paying for his crash-related medical expenses under a coordinated No Fault auto insurance policy AND if the crash victim’s doctor/hospital has been accepting those payments, then when the crash victim’s health coverage is “exhausted,” his doctor or treating hospital “shall not seek reimbursement from [his No Fault] insurer … in an amount that exceeds the amount the [doctor/hospital] previously was paid for the same or similar treatment by the” health insurer.

Additionally, it appears that SB 313, if enacted, is intended to have “prospective” application to only those auto insurance claims that arise after the changes to the No Fault law have taken effect:

“This amendatory act applies to policies, certificates, and contracts delivered, executed, issued, amended, adjusted, or renewed in this state, or outside of this state if covering residents of this state, beginning after the date this amendatory act is enacted into law.”

Our position on Senate Bill 313

As attorneys dedicated to helping people injured in Michigan car and truck accidents,  we oppose any measure that discourages doctors and hospitals from providing medical care and treatment of auto accident victims (as tying medical reimbursement rates to 150% of Medicare under SB 248 certainly would) or adversely affect the existence of medical services that lower treatment outcomes for care, recovery and rehabilitation.

We hope that SB 313, if enacted, will have neither of these effects.

Yes, there have been some excesses with certain medical providers and what they charge.  We hope a fair balance can be found.

We also hope that in the course of any debate over the merits of SB 313, two important questions are asked and answered by the politicians and the auto insurance companies backing this latest No Fault plan from Senate Republicans:

1.    How much will the auto insurance industry save as a result of the price controls proposed in SB 313?

2.    How much of those savings will be passed along to consumers in the form of lower auto insurance prices on a long-term basis?

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