But it’s the exploitation of No-Fault by insurance industry that could open door to ‘reform’ that would drastically limit medical benefits coverage & deny care
The Detroit Free Press ran a major exposé of No-Fault abuse yesterday, called “The Faults in No-Fault.”
It continues today by naming some of the Metro Detroit lawyers whose names have come up in connection with alleged illegal solicitation and ambulance chasing of car crash injury victims.
The way our No-Fault system is being used — and egregiously abused — in cities like Detroit by some personal injury lawyers and auto insurance companies (which inexplicably did not make it into the Detroit Free Press story) is jeopardizing No-Fault benefits for those car crash victims who desperately need No-Fault the most.
I told the Detroit Free Press’s JC Reindl yesterday in the Freep story:
- “[T]he exploitation of no-fault benefits [is] a ‘Grand Canyon-sized loophole in our no-fault system’” that “imperil[s] the no-fault system for injured people who need it.”
- Abuse within the No-Fault insurance system has “create[d] an entire industry of provider lawyers and provider lawsuits where, unfortunately, with certain doctors and certain medical providers, there is an incentive to pad bills.”
- “All of the other lawyers now see the incredible amounts of money that some bad actors are making, and it’s an incentive for more people to jump on the bandwagon with ever more billboards and ever more radio commercials.”
The solution to this abuse is not to dismantle our auto No-Fault laws in Michigan
The insurance companies in Michigan have played a much bigger role in creating many of the added costs and problems that we see. This did not make it into the Detroit Free Press story, but it should have. All of this abuse by the highly profitable auto insurance companies are far worse and are doing more to make No-Fault insurance unaffordable than the handful of lawyers that the Free Press story focuses on.
Claims adjusters intentionally select doctors who make vast amounts of money finding absolutely nothing wrong with people so the insurance companies can cut-off No-Fault benefits to them. This routine use of cut-off IME doctors (ironically referred to as so-called “independent medical examiners”) was a much bigger cause of the explosion in medical provider lawsuits and litigation than the lawyers who rack up big bills to try to take a third or half.
Claims adjusters can also quite legally lie to their own insureds, and intentionally mislead car accident victims about what legal protections are available to them.
Unfortunately, none of the egregious bad acts that I see every day committed by claims adjusters and the insurance companies against my clients made it into the story. But this abuse by the insurance industry imposes its own massive additional costs on the system, something Oakland County Executive L. Brooks Patterson did a nice job of describing:
“[A]uto insurance companies do not provide preapproval for medical services, do not allow for electronic medical billing and often refuse to pay their bills and/or force the medical provider to retain legal representation in order to get their invoices paid. This causes great uncertainty by the medical providers that they will be paid at all for legitimate medical services that have already been rendered and increases the cost of doing business.”
I want Detroit drivers to have affordable auto No-Fault insurance.
They want it. They need it. They’re entitled to it.
But the answer is not to give the insurance companies what they want most, after they’ve spent the last 20 years helping to make the problems of Michigan No-Fault worse!
When the insurance industry in Michigan is most responsible for driving the car off the cliff, you don’t reward them by buying them a car they like more. Profit margins are already too high, and insurer accountability for the bad acts that harm people almost nonexistent other than people being forced to hire an auto accident lawyer to sue for PIP benefits that should have been paid without costly litigation. The answer is not to now cap medical benefits, as the insurance companies want.
I’ll write on Wednesday about the real answers and solutions to “The Faults in No-Fault.”
Why Detroit car crash victims will lose medical care if they lose No-Fault coverage
Because we’re talking about Detroit now, specifically, the idea of preserving all of the existing legal protections guaranteed by No-Fault Act is particularly important.
As JC Reindl reported in the Detroit Free Press:
“An estimated 56% of Detroiters in 2015 were on Medicaid or Medicare, and 10% lacked any health insurance, according to the U.S. Census Bureau’s American Community Survey.”
Consequently, if abuse of the auto No-Fault system continues as it is, that could open the door to “reforms” that could restrict, limit or otherwise “cap” No-Fault medical benefits, leaving many Detroiters without anything to fall back on — forcing them to go without medical care or pay out-of-pocket for it themselves.