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‘D-Insurance’ missing crucial component: Truly fair No Fault medical provider fee schedules

March 15, 2016 by Steven M. Gursten

D-Insurance is still a terrible plan that deserves to be dumped, but Detroit Mayor Duggan’s proposal for low-cost auto insurance should look at  provider fee schedules


Detroit Mayor Mike Duggan’s “D-Insurance” Plan will not protect Detroiters from paying more for auto No Fault insurance. I discussed this last week when responding to The Detroit News editorial in support of the low-cost plan.

Recently, Nerd Wallet released an article, “Most Expensive Cities for Car Insurance,” declaring that “$10,723.22” is the “[a]verage annual premium” that Detroiters pay for auto insurance.  That’s higher than most of what I’ve seen recently, but the article did get it right when it stated that “Detroit has the most expensive average car insurance premiums in the country.”

If Mayor Duggan really wants to create a low-cost No Fault option for Motor City drivers, then his D-Insurance plan could use an important  – albeit currently missing – component.

There is truth that auto No Fault medical claim costs are driving up auto insurance prices.  And Mayor Duggan is right that some of my ethically-challenged colleagues in the personal injury lawyer profession may also be playing a role, as the Mayor talked about “billboard lawyers” also driving up costs.  I’ve been an outspoken critic opposing this type of ambulance chasing and PIP fraud, that I believe gives all attorneys a black eye.

There are many things that can be done to significantly lower the cost of auto No Fault insurance, both for Detroit and for Michigan.  I’ve written about this here and here.  But I also I believe that one additional answer that we need is implementing a truly fair No Fault medical-provider fee schedule.

In his State of the City address, as reported by the Detroit Free Press, Mayor Duggan said:

“Detroiters are ‘getting ripped off by the health care industry.’ …  Detroiters pay far higher rates, in large part, because health care providers charge more to auto insurers for certain care and services such as MRIs than they do to Medicaid or private health care insurance.”

This is a similar claim to the one that Mayor Duggan made in a June 9, 2015, City of Detroit press release announcing the completion of  the “D-Insurance: City of Detroit Insurance Company Feasibility Study”:

“[T]he predominant cause of the higher [auto insurance] premiums charged to Detroiters was expense associated with medical usage from Detroit [No Fault] policy holders. … [T]he higher rate of [No Fault] medical claims filed and the higher cost of these claims are the primary cause of the higher premiums paid by Detroiters.”

As I noted in a recent blog post, a fair No Fault medical-provider fee schedule may be just the compromise we need to accomplish the following important goals:

  • Lower auto insurance prices.
  • Preserve and protect the No Fault benefits that auto accident victims need.
  • Remove a lot of the ugliness and PIP fraud that we all see from a small but growing number of lawyers and law firms.
  • Streamline billing for medical providers, doctors and hospitals; facilitate prompt payment and eliminate the need for costly litigation.
  • Eliminate most of the lawyer provider lawsuit industry entirely, as doctors and medical providers would be paid reasonably charges promptly.

To learn more, please check out my blog post, “How I would change Mayor Duggan’s D-Insurance Plan to actually protect Detroiters.”

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