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Managed Care Option and Your Michigan Auto Insurance Policy: What You Need To Know

October 22, 2019 by Steven M. Gursten

Managed Care Option And Your Michigan Auto Insurance Policy

The new Michigan No-Fault law now includes a managed care option for consumers looking to buy or renew their Michigan auto insurance policy. This new medical care option took effect on June 11, 2019. Drivers should steer clear.

That’s because managed care with your Michigan auto insurance will not be as bad as it sounds. It will be much worse.

If you’re that rare person who really loves dealing with the bureaucratic nightmare of your HMO and being denied your doctor-of-choice, then this new medical care provision is for you.

If you want you or your family’s medical care to be in the hands of a claims adjuster and doctors who makes millions of dollars finding nothing wrong with people deciding whether you get necessary medical care or not, then this medical care provision is for you.

For some small promise of savings, selecting the managed care option with your Michigan auto insurance policy, means you will be putting your life and your ability to get necessary medical care in the hands of people who have a direct financial conflict of interest in allowing you to get that necessary medical care.

Below I will discuss the new No-Fault managed care option offered with their Michigan auto insurance policy and what drivers and consumers need to know.

IMPORTANT – THE MANAGED CARE OPTION IS NOT MANDATORY FOR UNLIMITED NO-FAULT MEDICAL COVERAGE: Be aware that some insurance agents and some auto insurance companies are flat-out lying to drivers by telling them that if they want to purchase the “unlimited” No-Fault medical coverage option to properly protect themselves and their families (which our own auto accident attorneys strongly recommend), then those drivers must also agree to accept the “managed care option.” Not is that terrible advice, but it is wrong and contrary to Michigan’s auto No-Fault insurance law. The “managed care option” is awful. It allows a claims adjuster to control your medical care and your treatment options. It also requires you to see only doctors pre-approved by your insurance company. Most of these managed care doctors already make a living doing one-time “second opinion” IME exams, cutting-off wage loss and other insurance benefits that people need. Additionally, the managed care option will require you to get the insurance company’s preauthorization for any necessary medical treatment – including surgeries. Let me be clear: there is nothing in the law that allows insurance companies to require you to select the managed care option in order to choose the “unlimited” No-Fault PIP medical coverage option under the new law. To the contrary, the law makes it clear that insurers must offer No-Fault medical coverage benefits that “are not subject to the managed care option.” (MCL 500.3181 and 500.3184) If your insurance agent tries to insist that you must take the “managed care option,” then you need to find a new agent. You should also report any agent providing this inaccurate and illegal advice to the Insurance Commissioner for insurance fraud.

What is the managed care option included in your Michigan auto insurance policy?

The new Michigan No-Fault law defines it as follows:

  • It is “an optional coverage [that “applies to all automobile insurance”] selected by an insured at the time a policy is issued that includes, but is not limited to, the monitoring and adjudication of an injured person’s care, the use of a preferred provider program or other network, or other similar option.” (MCL 500.3181; 500.3182)
  • It applies to No-Fault PIP medical benefits, i.e., the “allowable expenses” provided under MCL 500.3107(1)(a) which consists of “all reasonable charges incurred for reasonably necessary products, services, and accommodations for an injured person’s care, recovery, or rehabilitation.” (MCL 500.3183)

Pay close attention to the language about “monitoring and adjudication of an injured person’s care.”

Sounds very warm, caring and nurturing? No, it doesn’t. Because it isn’t meant to be.

These are the words that insurance companies use to describe the elimination of your right to get necessary medical care and a caring doctor-of-choice. It is the implementation of putting doctors and insurance company claims adjusters in charge of the medical care that you and your family need. It is the tyranny of “preauthorization” that anyone who has dealt with the bureaucratic nightmare of any HMO is already familiar with.

I’ve been a Michigan auto accident attorney for 25 years. I know the doctors that the insurance companies will be using for this. Make no mistake, of all the ugly and disappointing parts of the new Michigan No-Fault law that I have written about on the pages of this auto law blog, the managed care option offered with your Michigan auto insurance policy may be the nastiest.

I regularly see (and cross-examine) the so-called IME doctors that are routinely selected by insurance companies whenever they want to cut-off someone’s wage loss and medical care. These doctors routinely find nothing wrong with even the most seriously injured people when they perform compulsory insurance medical exams. To have these same doctors now put in charge of people’s care and deciding what diagnostic tests and medical specialists they will be able to see will be a disaster. The doctors populating these insurance company “preferred provider programs” will be nothing short of disastrous for seriously injured auto accident victims.

I have every reason to believe these insurance company doctors and claims adjusters will do anything and everything they can to keep their employers happy by putting insurer profits over people – even when diagnostic testing and referral to medical specialists is desperately needed. I have 25 years of first-hand experience watching what they have done to the people that our attorneys help and represent to back this up.

Is the new managed care option offered with your Michigan auto insurance policy required or optional?

The managed care option offered with your Michigan auto insurance policy is not required. It is an “optional coverage” that I strongly advise drivers to opt out of. (MCL 500.3181)

Do the restrictions apply to ER visits?

No. The new law provides that the “managed care option” “must not apply to emergency care.” (MCL 500.3183(c))

The law also provides that “[e]mergency care includes, but is not limited to, all care necessary to the point where no material deterioration of a condition is likely, within reasonable medical probability, to result from or occur during transfer of the patient.” (MCL 500.3183(c))

Will I save money on car insurance by choosing the managed care option with my Michigan auto insurance policy?

The New Michigan No-Fault law implies that drivers will save with the managed care option provided with their Michigan auto insurance policy but as with so many of the new No-Fault law’s so-called promises of savings and protections for victims and drivers, there’s a good chance this savings will be quite small. Or, like much of the promised savings with the new auto law in Michigan, it may prove completely illusory.

Specifically, the new auto No-Fault law states that the medical care option:

  • “Must provide a discount that reflects reasonably anticipated reductions in losses or expenses or both.” (MCL 500.3183(b))
  • Drivers who choose this option must be provided with a “written disclosure statement” that, among other things, includes the “estimated range of the percentage of the discount provided by the managed care option.” (MCL 500.3188(b))

What happens if a person doesn’t follow the terms of the managed care option their Michigan auto insurance policy?

They risk losing their ability to collect No-Fault benefits to cover their accident-related medical expenses.

This gets back to the same penalty provision in Mayor Duggan’s failed D-Insurance plan. There, victims risked financial ruin if they obtained medical care without first getting their insurer’s “preauthorization” because the insurer could use the lack of permission as a legal justification for refusing to pay on the victim’s No-Fault claim.

Although the full details for this medical care option have yet to be seen, I think it’s a safe bet to assume they will be similarly punitive in nature.

Consider the fact that the new No-Fault law states that drivers who choose the managed care option with their Michigan auto insurance policy must be made aware of the “consequences for violating any provisions of the managed care option, including the possibility of a claim denial . . .” (MCL 500.3188(d))

The sad part of all of this is that because there will be some promise of savings, thousands of consumers will still pick the managed care option with their Michigan auto insurance policy. If they or any family member on that auto policy are ever seriously injured in a car accident, they can expect the following:

  • Terrible difficulty getting referrals to medical specialist.
  • Terrible difficulty getting to the doctor and specialist they want to see.
  • Weeks of begging and pleading with their claims adjuster for permission to obtain the medical care and treatment that their own doctors have prescribed.
  • Nightmare waits for “preauthorization.”
  • Nightmare cut-offs from all medical care and wage loss from conflicted doctors who are being put in charge of their medical care and treatment. These same doctors are the ones who’ve been making hundreds of thousands or even millions of dollars performing one-time compulsory medical exams for these very same insurance companies and routinely cut-off even the most seriously injured people from medical care.

Think I’m exaggerating?

Watch this IME Docter Cross Examination to see just how bad these doctors can be who will be put in charge of your medical care under the managed care option with your Michigan auto insurance policy. What happened to my client with this doctor happens to hundreds of innocent and severely injured auto accident victims in Michigan who are forced to see these doctors.

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