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LEGAL ALERT
Michigan Auto No-Fault Reform Act: New Fee Schedule Cap Effective July 2, 2021
BY KATHLEEN A. WESTFALL, ESQ.
The Michigan Auto No-Fault Act requires physicians and other health care providers to charge a “reason- able 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 insur- ance. 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.
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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 adjust- ments 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 rehabili- tation facilities, or which are level I or II trauma center hospitals furnishing emergency care to indi- viduals 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
JUNE/JULY 2021 | WWW.OCMS-MI.ORG