Clarification of Mich. Coordinated Benefits Sought
NU Online News Service, Dec. 23, Noon, EST–The National Association of Independent Insurers has filed an amicus brief with the Michigan Supreme Court in the case of Sprague vs. Farmers to clarify the cost savings function of the state's coordination-of-benefits provision.
"Michigan's personal injury protection insurance laws allow consumers to choose to coordinate their health or accident insurance with their auto insurance policy at a reduced premium," explained Laura Kotelman, counsel for the Des Plaines, Ill.-based NAII.
"The NAII asked the court to clarify if the coordinated benefits clause in an insurance contract relieves a no-fault insurer from liability when those services are not offered by the healthcare provider, and if the policyholder fails to exhaust any available medical treatments offered by the same health care provider," she said.
The original case involved Kate Sprague, the plaintiff, who at the time of her accident had a coordinated benefits plan through an HMO, and also had no-fault automobile insurance with the defendant Farmers Insurance Exchange.
Ms. Sprague began treatment with a chiropractor and submitted the bills to her HMO, according to the NAII. The HMO declined coverage on the basis that no referral existed and because chiropractic services were not covered, NAII said.
Ms. Sprague then submitted the chiropractor bills to Farmers Insurance Exchange, which also denied coverage, on the basis that she had not made a reasonable effort to obtain medical services from her HMO, according to NAII.
The court ruled that Farmers Insurance Exchange was obligated pay the expenses.
"NAII asserts the analysis used by the lower court is flawed because it focuses on the particular treatment or expense incurred by the plaintiff. The court should have focused on the care that was available under the primary health plan, and in light of the covered care, was there any basis for [Ms.] Sprague to seek treatment from an alternative source at the no-fault carrier's expense," said the NAII's Ms. Kotelman.
"The NAII's [friend-of-the-court] brief seeks to impress upon the court the importance and impact of the legal issue presented in Sprague vs. Farmers," she added. "NAII urges the court to maintain and even strengthen the duty of a policyholder to utilize treatment that is available under his-or-her other health and accident coverage when coordinated no-fault coverage is selected by the insured."
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