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Would a compromise with truly fair medical fee schedules be the solution to preserving Michigan’s No Fault system?

May 19, 2015 by Steven M. Gursten

Reflections on provider lawsuits and medical fee schedules: Maybe $10,000 MRIs aren’t sustainable

Don’t get me wrong.

Our  No Fault auto insurance system is outstanding, and I wouldn’t trade it – or the life-saving protections  it provides to Michigan car accident victims – for anything.

But I’m also a realist. And the reality is: The way our No Fault system has been misused and sometimes abused in recent years is really messing things up.

These abuses go both ways. From the auto insurers, I see way too many unjust denials of No Fault insurance benefits. Too many illegitimate cut-offs. Too many lengthy, unnecessary, unwarranted and costly delays in claims adjusters paying out No Fault (PIP) benefits, forcing people to hire lawyers and start lawsuits for undisputed PIP benefits, like wage loss. And I see way too many No Fault lawsuits that keep dragging on, clogging our courts and punishing accident victims who desperately need their No Fault benefits.

But, as you’ll read below, there’s another type of abuse going on right now. Tomorrow, I’m sitting as a case evaluator in Oakland County, and thinking about the cases I will have in front of me got me to wondering:

What can be done to protect our No Fault insurance system so it stays on track and so it’s helping the people it was intended to serve — the people who have been seriously injured in car and truck accidents in this state and that need help with wage loss, medical bills and attendant care?

The answer seems obvious.

There’s no reasonable basis for a $10,000 MRI bill

As I left the office for the evening, with my briefcase stuffed full with a bulging stack of mediation summaries for tomorrow, the answer came to me:

No Fault medical provider fee schedules.

Wait, before you say anything. Yes, I know. I’ve previously and frequently expressed a very healthy skepticism about the wisdom of proposed No Fault fee schedules (or price controls) for doctors and hospitals and medical providers who treat Michigan auto accident victims.

But maybe this is an idea that’s time has finally come. Maybe a compromise that involves truly fair fee schedules is just what is needed to preserve Michigan No Fault and the vital and necessary insurance protections and PIP benefits it provides.

As I said above, tomorrow I’m sitting as a plaintiff case evaluator in Oakland County. Being a  “case evaluator” means you sit on a panel of three experienced lawyers or judges, and try to put a value on cases that will help them to settle.

But I cannot ever recall the cases being like this.

Nearly every case I will evaluate in Oakland County is either a small No Fault PIP lawsuit (where car accident victims ask a judge or jury to order an auto insurer to pay overdue No Fault benefits) or a provider lawsuit (where a lawyer has filed a lawsuit on behalf of a doctor, medical office or MRI facility to secure their bills, or intervened in a pending No Fault PIP lawsuit because the medical provider doesn’t trust the plaintiff attorney or believes the plaintiff attorney will compromise the bill too much…and then the attorney will try to take an attorney fee on the compromised amount).

Interestingly, my law partner Bobby Raitt sat as a case evaluator last week in Wayne County. Same story as what I have tomorrow — 15 of the 18 cases Bobby evaluated last week for the Wayne County Circuit Court were PIP and provider lawsuits.

What a mess.

Something is broken here.

And this is what things have come to in courts all over Michigan.

My cases tomorrow reflect the change in our profession. When I first sat as a case evaluator many years ago (back when it was still called mediation), most of the cases I would hear would be third-party automobile negligence cases (i.e., car accident victims suing for pain and suffering compensation, which, under the No Fault Law, is also known as “noneconomic loss” damages).

Now, there are almost none of those cases. Everything is No Fault PIP. If you would like to read about how this all came about (and how the insurance companies and the Republicans helped create this mess), take a look at my blog post, “How insurance companies helped create the PIP fraud problem in Michigan.”

This also reflects the changes that have taken place in the plaintiff’s personal injury bar, where there’s a now a wide split and a lot of disagreement in the Michigan Association for Justice (formerly the “Michigan Trial Lawyers Association”) between the law firms that do primarily first-party No Fault litigation and provider cases and those that do more third-party (tort) negligence cases.

I should stop and point out here that some of the lawyers and law firms that do medical provider work are very reputable law firms. My friend Wayne Miller of Miller & Tischler, P.C., is one.

Many of the other attorneys who came after Wayne started doing medical provider work and who have jumped onto the medical provider bandwagon don’t share Wayne’s high legal ethics. A small handful of these law firms are very likely committing outright fraud.  I’ve written about this before. Here’s one of the blog posts where I touched on this issue: “How to stop No Fault insurance fraud (and lower Detroit’s high auto insurance rates).”

I’ve been hearing for years how some insurance companies have fraud units set up for specific law firms. Yet the years continue to pass and nothing ever seems to get done, even as the rumors get louder and louder. Except perhaps that the number of law firms under investigation continues to grow.

Of course, this change hasn’t just occurred with the legal profession. It reflects the wider changes that have occurred over the past decade regarding patient and provider care in Michigan. It’s why we’ve seen some bad actors come into Michigan from out of state. And it’s why we’ve seen “Michigan accident services” type organizations that aggressively solicit people who have been in car accidents, sometimes even knocking on doors within days of a car accident.

And all of this is embroiled in one aspect or another in the current battle going on as we speak, and as you read these words over what shape No Fault reform in this state will take.

Are fair and reasonable payment schedules No Fault heresy?

So maybe it’s truly time for reasonable and fair No Fault medical-provider fee schedules.

Again, I know I’ve previously and frequently expressed on this blog opposition to the proposed No Fault fee schedules (or price controls) for doctors and hospitals who treat auto accident victims. In my defense, this opposition has been to the incredibly unfair and one-sided proposals being pushed by the auto insurance companies, such as the one in SB 248, which would tie in provider reimbursement to 150% of Medicaid.

Notice I’m now using the word “fair” in the sentence above. This is actually new. So far, none of the insurance company-sponsored bills we have seen have been fair to date to the medical providers and doctors and hospitals.

I’m an attorney who helps people injured in automobile accidents. I strongly oppose any efforts that will result in diminishing the quality of the medical care that people receive if they’re injured in a motor vehicle accident. And I will fight like hell to protect this.

I also oppose any efforts to take away No Fault protections and benefits from those who need them the most, simply to fatten already suspected very large auto insurance company profit margins. As any reader of this legal blog knows, I’ve strongly opposed No Fault “reform” efforts by the insurance industry to strong-arm one-sided changes that will explode profits at the expense of patients and accident victims.

Not only have all of the No Fault “reform” bills we’ve seen so far been incredibly one-sided in favor of the insurance industry, but their effects (if they were passed into law) would be devastating to Michigan automobile accident victims whose care, recovery and rehabilitation, not to mention their lives, depend on the legal protections and PIP benefits that No Fault provides.

There is no need to devastate those who require attendant care, those who have already suffered catastrophic brain injuries and spinal cord injuries, by capping the number of hours or the attendant care rate that those who provide the attendant care should be paid.

I also strongly oppose any efforts to drive doctors and hospitals away from providing necessary medical care to auto accident victims, as the proposed fee schedule in the House Insurance Committee’s version of Senate Bill 248, which would cap doctors’ and hospitals’ fees at “150% of the amount that would be paid under Medicare,” surely would.

What would a fair rate of medical reimbursement do? The argument for medical provider fee schedules

My guess is a fair rate for medical services reimbursements under No Fault would remove a lot of the ugliness, fraud and legal shenanigans that we all see out there.

It would, for instance, remove many of the small No Fault cases that I’m sitting on tomorrow from clogging our courts. We wouldn’t have these legal disputes over “reasonable charges.”  Many of the provider lawsuits would vanish completely.  This is a good thing, as this would mean medical providers would now be paid a fair amount promptly, 30 days after the medical service was provided, as our No Fault law is currently written.

Wouldn’t that be something!

A truly fair rate of medical reimbursement would be great for the medical providers and doctors and hospitals. It would streamline billing and payment. It would reduce costly litigation. There would no longer be a need to hire lawyers and file provider lawsuits over what a reasonable charge is. Everyone would be paid more promptly.

A fair rate of medical reimbursement removes an entire layer of attorneys who now make a living doing the less-reputable type of medical provider work. Excellent provider attorneys, such as my friend Wayne Miller, will still exist and likely do just fine — because let’s face it, you can’t impute wisdom or reasonableness to insurance companies.

But  for the lawyers who are behind much of the ugliness out there, things won’t be so good.

Good riddance.

Let’s remember, it’s lawyers who have caused a great deal of this mess.

There are some lawyers out there who start a No Fault lawsuit on day one on a completely open No Fault claim so they can take an attorney fee on everything, including completely uncontested medical bills, as well as wage loss and replacement services. This is repugnant. No wonder it drives doctors crazy.

Other lawyers in Michigan did such a bad job of getting doctors and hospitals and MRI facilities paid in pending first-party No Fault litigation, first compromising the medical bills down to unreasonably and unfair amounts for the doctors — and then taking a big attorney fee on top of the already compromised amounts.

No wonder this caused so many doctors in so many areas of this state to stop taking any patients who were injured in auto accidents. No wonder this caused so many of the medical providers who still provide medical services to auto accident victims to have to hire their own lawyers.

And so the attorney-medical provider industry was born.

Today, there are so many doctors and medical facilities who now are forced to hire their own lawyers because they can’t trust the lawyers who represent their patients to protect their bills and get them fairly paid.

This has led to many of the abuses of No Fault that I’ve written about on this blog.

Could now be the right time for a compromise? A real compromise? A fair compromise?

One that will really protect the medical providers and doctors and hospitals?

It is, if the auto insurance companies and those Republicans they’re in cahoots with first stop pushing unfair fee schedules just to pump up insurance company profit margins at the expense of everybody else.

Not a sham fee schedule based upon 150% of Medicaid as in SB 248. But a way to quickly streamline No Fault bill submittals so the amount to be paid is clear and undisputed based upon the medical service provided.

No more need to hire lawyers and start provider lawsuits.

Maybe that compromise will be the fee schedule Sen. Marty Knollenberg (R-Troy) has proposed in Senate Bill 313? For more information, here’s my blog post, “BREAKING NEWS: Senate Republicans streamline No Fault strategy with new proposed law.”

Or maybe the specifics of the compromise have yet to reveal themselves. But the negotiations behind closed doors continue, and everyone knows something is going to happen sooner or later.

Either way, the time for a real compromise is now.

Before they ask me to sit as a case evaluator again in another few months.

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