August 2021: Michigan No-Fault Updates
At MichiganLawsuit.com, P.C., we probably are beginning to sound like a broken record continuing to discuss the Michigan No-Fault laws, and how they affect you. However, it is important to recognize the very real consequences of these changes. In this article, we will take a look at some of these changes, including those that went into effect on July 2, 2021.
Provider Fee Caps Explained
Prior to the changes the new Michigan No-Fault laws brought about, there were no fee schedules of regulation of provider charges. Per MCL 500.3107(1)(a) and MCL 500.3157, any charges just had to be “reasonable and customary.” However, on July 2, 2021, the amended §3157 went into effect, creating significant fee caps in two main areas: Medicare payable services, and non-Medicare payable services. For services payable under Medicare, during the first year the fee cap is set at 200% of the amount payable by Mecicare during the first year. As time goes on, however, this fee cap decreases, beginning at 195% of the amount payable by Medicare during the second year and 190% in the third year. Even so, there are still exceptions for a few certain hospitals, where the base rate cap can be as high as 250% of the amount payable by Medicare. Keep in mind, though, that these are fee caps and not fee schedules, which means that an insurer may still argue that the amount being claimed is unreasonable even if it is within the cap.
Where we find ourselves in the weeds with this change is with the non-Medicare payable services. Attendant care services provided by home care agencies, long-term rehab facilities, family members, etc. are not covered under Medicare. These services, among other non-Medicare payable services, now have a 55% cap on the provider charges. This is going to devastate home care agencies and facilities like it, and the providers, being that most cannot afford a 45% reduction in charges. For example, a home care health agency may charge roughly $26 per hour, where the employees are paid $12-$14 an hour from that, $12-$14 goes to other overhead such as insurance, lease expenses, utilities, etc. Obviously, being a business, they would also want to turn a profit, keeping whatever is left over after taking care of the aforementioned expenses. With the new fee cap, that $26 is knocked down to $14.30 an hour. These businesses would then be completely unable to cover the cost of employees or overhead, let alone make anything for themselves. Because the legislative effort to change this has failed, there are other avenues being explored regarding being able to get these services paid for, such as the possibility of forming new corporate entities, that did not exist in January 2019. The language of §3157(7) discusses only charges that existed in January 2019. Thus, it is a potential possibility that new entities will revert to the prior “reasonable and customary” standard of §3157(1).
Attendant Care Benefits: Limits, Family as Providers
In workers comp law, family provided attendant care is limited to 56 hours per week, which has now also been adopted by §3157(10). However, it seems that insurers and the Michigan Catastrophic Claims Association (MCCA) have been paying the reasonable value of family-provided services, without a 45% reductions, and it also appears that they may be okay with family members serving as the de facto provider to those who need care. This means they may not limit the care to 56 hours per week, and pay for up to 24 hours per day (168 hours weekly) of family provided attendant care. They would pay the family to provide the care, which includes the family being able to provide non-relatives as caregivers. This is permitted under §3157(11), and while the commercial, independent agencies are suffering from cuts, this may mean the family can provide and/or purchase the care their injured family member needs.
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