Hospitals Pull Stunner On Auto Insurance; Energy In Doubt > Michigan State Medical Society


Hospitals Pull Stunner On Auto Insurance; Energy In Doubt

Gongwer - 12/15/2016

The final week of the 2015-16 legislative term began with a development that left even seasoned lobbyists and Capitol-watchers stunned: The decision of the Michigan Health and Hospital Association to link arms with insurers on an auto insurance medical coverage bill opposed by the hospitals' longtime allies on the issue.

But by Tuesday's end, those in the Coalition to Protect Auto No-Fault, of which the hospital association has been a member and were fuming at the group's decision to break ranks and cut its own deal, began to exhale as their surveying of House members showed the new, pared back legislation still short of votes. Supporters acknowledged it did not look good.

The dramatic development, for a time, shifted attention away from the flagship issue of the final week of the 98th Legislature: overhauling the energy law. Tuesday's behind-the-scenes activity did not appear to offer much reason for encouragement for those hoping to see the legislation, which supporters say would stabilize the market and set up a better process for the construction of new power plants.

Officials with the state's largest utilities, Consumers Energy and DTE Energy, were said to have spent hours with the Snyder administration working on possible changes that could win the necessary votes.

When the House adjourned about 9 p.m., neither House Speaker Kevin Cotter (R-Mount Pleasant), nor House Majority Floor Leader Aric Nesbitt (R-Lawton), the Energy Policy chair, would comment.

Senate Majority Leader Arlan Meekhof (R-West Olive) said he hadn't talked to Mr. Nesbitt on Tuesday except for first thing in the morning, and at that point, he was told the House was still working on it.

"We had great discussions this morning with House leadership," Mr. Meekhof said earlier in the day. "They're still working with folks over there to see where they can land."

Going into Wednesday, which could be the last full session day of the year (though it could extend past midnight Thursday), those tracking the issue say it could go either way.

AUTO INSURANCE SURPRISE: The word of the hospitals joining with insurers for new versions of SB 248 and SB 249 , which have sat dormant on the House floor for 20 months, hit the Capitol like a thunderclap.

The second floor lobby outside the House chamber was wall-to-wall with lobbyists on energy and no-fault with some of those with organizations in CPAN having hurried to the Capitol after word of the hospitals' move and the almost astonishing sight of hospital association lobbyists working hand-in-hand with lobbyists for the insurance industry on an issue where they have been at odds for years.

Curiously, the genesis of the development came not from the House, where the bills sit, but the Senate, where Mr. Meekhof helped prod the hospitals to make a move. In exchange for supporting the revised legislation, hospitals were assured their key priorities on the legislation would be followed and promised peace on top legislative priorities of theirs for the next two years.

Under the revised bills, there would be a $400,000 cap on how much coverage the assigned claims system would provide for those catastrophically injured in a traffic crash where the injured person has no insurance - uninsured motorists, passengers, bicyclists or pedestrians.

The proposal also would put a cap of 56 hours per week on relatives who provide attendant care to those catastrophically injured in traffic crashes and put in place a fraud authority, long top priorities for insurers. The cap on attendant care would not affect non-relatives.

From the hospitals' standpoint, the legislation has the benefit of not imposing a fee schedule, as has been discussed in the past on this issue, nor does it cap benefits for anyone who purchases insurance and suffers a catastrophic injury in a traffic crash, said Chris Mitchell, senior vice president for advocacy for the Michigan Health and Hospital Association. It leaves the Michigan Catastrophic Claims Association in place, another MHA goal, he said.

Stephen Pontoni, executive director of the Michigan Association for Justice, which sent an urgent email to its members to voice opposition to their legislators about the new bills, said without a guaranteed rate cut, the legislation is flawed. It would put at risk those most in jeopardy - those without insurance, he said. Mr. Pontoni also said it is dangerous to try to jam an issue of this magnitude into the final days of the legislative term.

"CPAN has been pushing lawmakers for balanced and responsible no-fault reforms. This bill is neither of those," said CPAN spokesperson Josh Hovey in a statement. "By capping benefits for those covered by the Assigned Claims Plan, lawmakers would be hurting the most vulnerable auto accident survivors in this state - children and seniors. I just can't see how anyone would think that is a good idea."

But those tracking the issue said the legislation's lack of guaranteed rate relief was proving a big stumbling block to gaining votes.

Mr. Meekhof expressed optimism about the possibility of no-fault reform coming up this week. He said it has always been a priority for the Senate, which is why they sent it over to the House much earlier.

"We're working on something that hopefully moves the ball down the court and helps us control the costs that are running rapid in there," he told reporters after session. "The House also believes this is something we can get done. They're working on it and they'll likely do something about that, and if they can, they'll send it back to us."

Pressed on why now, he responded, "Lame duck?"

He agreed that the bills being considered are more of a scaled down version, "but you get most of what you want and keep working on it," he said.

He said a fee schedule is not included in the bills because he simply couldn't get the votes for it, but he was uneasy about whether the initiative could be brought up again next year with a new batch of legislators.

"I think we've arrived at a good compromise and we want to see how that works, what it actually does, how it impacts," Mr. Meekhof said. "We tend to think we've got to change things right away - maybe not. Maybe we should measure what the impacts are and then adjust after that."

On whether the legislation seeks to reduce costs or limit increases in the future, he said for him, it's never been about rolling back rates.

"It's always been about the adjudications that have been done and the costs borne by insurers which then gets passed on to the rates. So we're trying to do our best to control those costs," Mr. Meekhof said. "A lot of the stuff we put in place, it hasn't been touched except for around the edges in 40 years. Courts have ruled certain ways that we never intended for, so we're going to try to put curbs on some of these things so we can at least tell people there's not fraud, not other things going on there that people like to try to point out to us."

One Republican source indicated the House Republican Caucus might be experiencing fatigue on large issues, especially since the auto insurance plan came up unexpectedly during lame duck.

House Speaker Kevin Cotter (R-Mount Pleasant) and House Speaker-elect Tom Leonard (R-DeWitt Township) are pushing the proposal in the caucus. Though the plan initially seemed to have momentum, it may not translate into House action, but one House Republican source did say it is too early to declare the changes a no-go in the House.


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