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Sen. Knollenberg’s bill to lower No Fault medical costs sees brake lights

January 7, 2016 by Steven M. Gursten

Supporters of SB 313, which would limit ‘reimbursements’ for hospitals and doctors who treat auto accident victims, outnumbered at Senate Insurance Committee meeting

No Fault medical costs

Sen. Marty Knollenberg (R-Troy) has proposed a measure for reducing Michigan auto insurance prices by capping what certain medical providers can charge when treating people injured in automobile accidents under No Fault.

But not everyone likes the way Sen. Knollenberg would do it.

Supporters of Senate Bill 313 – which would limit what doctors and hospitals can charge for treating Michigan auto accidents to the amount they “customarily” receive as payment or reimbursement for the same services – were outnumbered three to one at the Senate Insurance Committee’s December 9, 2015, Meeting.

Under SB 313, if a doctor or hospital “customarily” receives a certain payment from workers’ comp, Medicaid or health insurance for a particular medical service or treatment, then the doctor or hospital can’t charge more when the medical service is provided to an auto accident victim and a No Fault auto insurance company is footing the bill.

I don’t know if Sen. Knollenberg’s proposals in SB 313 will perhaps in 2016 be the solution to the problem of higher auto insurance prices in Michigan, but at least they attempt to address one aspect of the problem of high auto insurance in this state.

I’ve written my own proposed solutions for high auto No Fault insurance prices in Michigan before.  And in several other blog posts I’ve called for the implementation of a truly fair No Fault medical-provider fee schedule, one that would put some reasonable limits on what doctors and hospital can charge for treating Michigan auto accident victims. I am personal friends with several of those who opposed SB 313. The only difference is that I see some changes coming as inevitable to contain the growing fraud and abuse we see today, and I have been in favor of practical, truly fair reimbursement limits that will save the No Fault law: :

“[M]eaningfully lower the price of auto insurance … and … keep the critical legal protections and insurance benefits of our No Fault system intact.”

Brake lights for SB 313

Unfortunately, during a hearing before the Senate Insurance Committee on December 9, 2015, support for SB 313 was in short supply. The supporters of Sen. Knollenberg’s proposal to reduce No Fault medical costs were:

  • Peter A. Kuhnmuench, Insurance Institute of MI – support
  • Tiffany Hauser, AAA Michigan – support
  • Katie A. Jones, Allstate Insurance Co. – support
  • Bill Jackson, MI Insurance Coalition – support

Opponents of SB 313 included:

  • Steve Sinas, CPAN – oppose
  • Mark Cook, BCBSM – oppose
  • Dominick Pallone, MI Assoc. of Health Plans – oppose
  • Bill Buccalo, MI Brain Injury Provider Council – oppose
  • Margaret Kroose, MI Brain Injury Provider Council – oppose
  • Dusty Fancher, Aetna – oppose
  • Peggy Allen Bock, Special Tree – oppose
  • Timothy F. Hoste, Unique Options, LLC – oppose
  • Brian O’Connell, General Motors – oppose
  • Heather Nicholoff, U.S. Health & Life Insurance Co. – oppose
  • Charlie Pryde, Ford – oppose
  • Delaney McKinley, MI Manufactures Assoc. – oppose

The Senate Insurance Committee did not propose amendments to SB 313, nor was a vote taken.

(Source: Senate Insurance Committee, “Draft Committee Meeting Minutes” for December 9, 2015)

How much are doctors and hospitals ‘customarily’ paid and reimbursed for treating Michigan auto accident victims?

Specifically, 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]

To learn more, please check out Michigan Auto Law’s blog post, “BREAKING NEWS: Senate Republicans streamline No Fault strategy with new proposed law.”

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