Although courts, attorneys, medical treatment providers, and patients are still trying to fully understand how to apply the amended No Fault Act, one recently published case by the Court of Appeals will hopefully provide a measure of clarity.

As part of the no fault amendments passed in 2019, the Michigan legislature for the first time implemented a fee schedule on medical payments under the No Fault Act which was ostensibly intended to help control the costs of no fault claims. The rate schedule is primarily based on the amounts which Medicare pays for a given service; if Medicare has a set rate for a service, then a no fault insurance carrier is required to pay the provider a percentage of that rate, however, if Medicare does not have a set rate for the service then the provider was left to simply take a 45 discount off of what it charged for the services back in 2019. By way of example, if Medicare would pay $100 for a given service, then a no fault insurance carrier may be liable to pay up to $200 for the service. If Medicare does not have any rate set for the service, however, and prior to 2019 the provider charged (and the no fault carrier paid) $100 for the service, the insurance carrier would now only have to pay $55 for that same service.

In West Michigan Home Care Services v MEEMIC Insurance Company, the Court of Appeals tackled the question of how much an insurance carrier would be required to pay for services provided by home health aides and skilled nursing care. In this case, the plaintiff required 24 hour care as a result of a spinal cord injury caused by a motor vehicle crash. Prior to July 2021, the defendant insurance company paid $31 per hour for home health aide and skilled nursing care in the patient’s home. When the fee schedule went into effect, the carrier decreased its payments to approximately $19 per hour. The carrier argued that Medicare did not have a set fee for these services, therefore, a percentage-based discount was appropriate to determine a reasonable rate under the newly implemented fee schedule.

Rather than taking the defendant insurance carrier’s lead to delve into the minutiae of how Medicare prices services (fee-for-service as opposed to the prospective payment system), the Court’s opinion was more straightforward. It held that “because there are amounts payable under Medicare for home-health-aide and skilled nursing care,” the trial court was correct to hold that the Medicare rate should be applied for the purpose of the fee schedule as opposed to a flat-rate discount. Going forward, providers of home health aide and skilled nursing care services can rest assured knowing that they would be paid according to Medicare’s rates as opposed to being forced to take a discount off of the rates they charged back in 2018.