Kathleen A. Westfall, Esq.
The Michigan Auto No-Fault Act requires physicians and other health care providers to charge a “reasonable fee” for medical treatment and rehabilitative training services rendered to individuals injured in auto accidents. The fee also cannot exceed the amount the provider customarily charges for like treatment and services in cases not involving insurance. However, as part of the 2019 Michigan Auto No-Fault Reform Act, beginning July 2, 2021, fees for treatment and training services will be subject to further limits as follows:
- No more than 200% of the amount payable by Medicare, but not exceeding the average amount charged by the physician/other provider for the treatment or training on January 1, 2019.
- If Medicare does not provide an amount payable for the treatment or training, then no more than 55% of the physician/other provider’s charge description master (i.e., fee schedule) in effect on January 1, 2019 or if none, 55% of the physician/other provider’s average charge for the service as of January 1, 2019.
The fee schedule caps will be further reduced for treatment and training rendered after July 1, 2022, and again after July 1, 2023, subject to annual adjustments based on the Consumer Price Index for the year preceding the adjustment. Enhanced caps are available to eligible physicians, hospitals, clinics and other providers with specified volumes of indigent care, or which are designated free standing rehabilitation facilities, or which are level I or II trauma center hospitals furnishing emergency care to individuals injured in auto accidents, if approved by the Michigan Department of Insurance and Financial Services (the “Department”).
Even if a physician or other provider charges an amount which does not exceed the fee schedule caps, insurers are still permitted to challenge whether the fee is reasonable and/or complies with the caps. Thus, charging the amount permitted by the fee schedule caps does not guarantee that the fee will be deemed reasonable.
For claims billed within 90 days of the date of the service, personal protection benefits are overdue if not paid within 30 days after an insurer receives “reasonable proof of the fact and of the amount of loss sustained.” It is expected that insurers may request information regarding the fee’s compliance with the fee schedule caps limitations. If reasonable proof is not supplied as to the entire claim, the amount supported by reasonable proof is overdue if not paid within 30 days after the proof is received by the insurer. If a bill for the treatment, training or service is not provided to the insurer within 90 days after of the date of service, the insurer has 60 days in addition to 30-day period to pay, before the benefits are overdue. Physicians and other health care providers should look to Michigan’s “clean claim” standards applicable to health insurers for guidance when billing auto insurers. Physicians and other providers should also consider including with the claim or bill information regarding the fee’s compliance with the fee schedule cap limitations (e.g., the applicable percentage of the amount payable by Medicare, the physician or other provider’s average charge/charge description master for the treatment, training or service on January 1, 2019, qualification for enhanced fee schedule caps, etc.).
If there is a dispute with an insurer regarding the treatment, training, or service rendered or the amount charged, physicians and other providers will continue to have the option to either (1) appeal the insurer’s determination to the Department or (2) if the bill is overdue, file a lawsuit against the insurer. These dispute resolution options are not impacted by the new fee schedule caps.
Question: My practice is new, and I did not offer or provide treatment or services on January 1, 2019. What fee am I allowed to charge?
If Medicare provides an amount payable for the treatment or other service, then physicians and other providers who did not offer or provide treatment or services on January 1, 2019 can charge a reasonable fee which does not exceed 200% of the amount payable by Medicare, or an enhanced amount if eligible and approved by the Department. If there is no amount payable by Medicare, the fee charged must still be reasonable and not exceed the amount the provider customarily charges for like treatment and services in cases not involving insurance.
The Department has proposed administrative rules addressing the Auto No-Fault fee schedule limits which would require physicians and other providers who did not offer or render treatment or services on January 1, 2019 to provide the Department, at its request, with a “regional average” reflecting the amount of the charge if the service had been rendered on January 1, 2019. A “regional average” is proposed to mean a charge for a service based on the average charge for the provider’s geographical region established by a national database of fees not covered by Medicare that is approved by the Department. It is unknown whether the Department may seek to impose a fee schedule cap for physicians and other providers who did not offer or render services on January 1, 2019 based on the “regional average” data if there is no amount payable by Medicare for the service. However, the proposed rules are currently pending, and it is not presently known if or when the proposed rules will become effective or may be modified. In addition, it is possible the legislature may enact legislation to further address fee schedule caps for physicians and other providers who did not provide treatment or services on January 1, 2019.
Question: An insurer has asked me to provide my entire fee schedule, including for services which have not been billed to the insurer. Am I required to furnish this information?
No. Physicians and other providers are not required to provide an insurer with any information regarding the provider’s fee schedule or charges for services until a claim or other bill is submitted to the insurer for payment. Even when a claim or bill is submitted, an insurer may only request and receive information which is reasonably necessary to confirm that the fees charged for the specific services rendered do not exceed the fee schedule caps imposed under the Auto No-Fault Reform Act. The insurer is not entitled to information regarding fee schedules for treatment or services which have not been rendered or billed.
The proposed rules discussed above would allow the Department to request and require the physician or other provider to furnish to the Department (1) the provider’s charge description master in effect on January 1, 2019, or (2) if the charge description master does not list all of the provider’s services offered or rendered on January 1, 2019, the provider’s average amount charged for any service offered or rendered on January 1, 2019, or (3) if the provider did not offer or render services on January 1, 2019, the provider’s “regional average” (discussed above). However, the proposed rules, if they become effective, would not entitle an insurer to request or receive this information.