After an auto accident the last thing an injured motorist wants to think about is medical bills. The Michigan No Fault Act is supposed to ensure they are paid, but a new Michigan Supreme Court decision could put patients in the middle between medical providers and their money.
Medical Provider Lawsuits Put Patients and Doctors on the Same TeamFor years, Michigan medical providers have been allowed to file medical provider lawsuits to collect no-fault benefits directly from their patients’ insurance providers. That means when an auto insurer refuses to make payment for reasonably necessary medical benefits, patients and their doctors, hospitals, or therapists could team up in court to make their case. Together, they could combat the insurance companies’ defenses and get patients' medical benefits paid.
Covenant Med Ctr v State Farm Changes the RulesA recent Michigan Supreme Court case, Covenant Medical Center, Inc. v State Farm Mutual Auto Insurance Co, is changing that arrangement. The case was appealed over the question of whether a patient’s settlement automatically eliminated a medical provider’s case. But the Supreme Court decided to take on a bigger question: whether medical providers could sue insurance companies at all.
Medical provider lawsuits under the No-Fault Act have always been based on Court of Appeals decisions allowing doctors to sue insurance companies directly when benefits were not paid. But the Michigan Supreme Court said the language of the statute did not support that interpretation:
"While this provision undoubtedly allows no-fault insurers to directly pay healthcare providers for the benefit of an injured person, its terms do not grant healthcare providers a statutory cause of action against insurers to recover the costs of providing products, services, and accommodations to an injured person. Rather, MCL 500.3112 permits a no-fault insurer to discharge its liability to an injured person by paying a healthcare provider directly, on the injured person’s behalf. And further, no other provision of the no-fault act can reasonably be construed as bestowing on a healthcare provider a statutory right to directly sue no-fault insurers for recovery of nofault benefits. We therefore hold that healthcare providers do not possess a statutory cause of action against no-fault insurers for recovery of personal protection insurance benefits under the no-fault act."
Covenant Puts Patients in the MiddleCovenant will change the way Michigan auto accidents get to court. Before, patients and doctors worked together as plaintiffs against insurance provider defendants. But Covenant means medical providers will have to sue their own patients, sometimes before treatment is even finished, to get their bills paid. It will be up to injured motorists to file the claims against their insurance providers. If they don’t, they could be left holding hundreds of thousands of dollars in medical debt.
Dani K. Liblang is a personal injury attorney at The Liblang Law Firm, PC, in Birmingham, Michigan. If you have been injured in an auto accident, contact The Liblang Law Firm today for a free consultation.