MICHIGAN

A Michigan court of appeals has ruled that no-fault insurers have the right to review medical bills, and to pay lesser amounts if they deem any procedures to be unreasonable or unnecessary.

The Property Casualty Insurers Association of America has filed an amicus curiae with the Michigan Supreme Court requesting that it uphold the appellate court's position. “If the Supreme Court reverses this decision, as plaintiffs have requested, medical providers truly will have carte blanche to charge whatever fees they want,” said Robert Hurns, legislative database manager and counsel for PCI. “Under the current Michigan No-Fault Act, no-fault insurers have not only the right, but the obligation, to review medical bills for fairness and necessity. If this were reversed, the negative impact on Michigan insurers and consumers would be severe.”

The original case involved the Advocacy Organization for Patients & Providers, which filed suit against Michigan-based Auto Club Insurance Association, claiming that they could charge whatever fee they deemed appropriate, as long as they were to charge each of their uninsured patients the same fee. After the appellate court ruled in favor of the insurer, the plaintiffs argued that the methods used by insurers to evaluate bills were improper. The plaintiffs' argument focused on the percentile test, in which a computerized database and a percentage-based figure evaluate medical charges.

Although Michigan courts have held that this type of bill review was a lawful way to determine reasonableness, it is not the only method insurers use, Hurns noted. “Insurer claim adjusters still use their independent judgment in evaluating claims,” he said. “The 'percentile test' and other bill review methods are merely tools to assist in that evaluation, and adjusters can, and often do, override the recommendation.”

Special Reports /

Appellate Court Approves Medical Bill Evaluation

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