New Michigan Auto No-Fault Reform Bill 2014, HB-4612 (H-3)

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Michigan Auto No-Fault Reform would be detrimental to the every citizen in Michigan on so many levels, read below for more information. 

Time to Take ACTION:

Contact your state representatives and senators via the link below or via their facebook pages and tell them what you think of HB 4612 or copy and paste the following or say it in your own words:

Please support Michigan citizens and leave Michigan Auto No-Fault alone.  HB 4612 is an unethical bill that benefits no one but the auto insurers. The Michigan Auto No-Fault bill takes the costs of care of people who are injured in auto accidents off the auto insurers and puts it onto families and tax payers while destroying Michigan businesses that cater to accident victims and their families.  HB 4612 is a bill that would put many Michigan families in dire straits and would be another blow to Michigan's already fragile economy.  Please support the people of your district do your best to ensure Michigan Auto No-Fault remains intact, speak out against HB 4612.

Links to contact state representatives: 

Click here to contact Michigan Representative for your district.

Click here to contact your Michigan Senator.

 Overview of the latest proposed No-Fault reform legislation (HB-4612 (H-3)), so here are some highlights:
  • The limitations of attendant care and the $200 per month copay the injured person will have to pay.
  • The attempt to eliminate the victims legal rights by not allowing a jury trial and by the blatant attempt to prevent victims access to attorneys.
  • Allowing insurers the possibility of reimbursing for products and services at the rate of Medicaid.  Auto insurers have resources that far surpass Medicaid's resources, so what happens to the money auto insurers save on paying for services?
  • The 10% premium reduction for drivers that is guaranteed for two whole years then can be raised without limit??  The insurance companies are fighting this one.  Is there anything consumers will gain from this reform?
  • No more long term residential care.  This means families would have to pay for residential care until they were at poverty point then Medicaid would pay for basic warehouse nursing home care.
The new reform bill HB-4612 (H3) has the following reforms then everything else is the same as the 2013-HB 4612 (H1).

  •  $10 Million hard cap on medical benefits.
  • Limits on providers' charges.
  • Managed care option to reduce costs of the auto insurers by having deductibles and copays for going 'out of network' for providers.
  • Low auto insurance cost option for people with very low incomes, if benefits were to run out private insurers or Medicaid would pick up costs.
  • 3-year reduction of 10% of policy premiums except for people who have tickets or accidents during the 3 years.
Below is a brief overview of the proposed No-Fault legislation and what is on the table.  For a more in depth explanation of the reform bill that was introduced on April 23, 2013, click here to see the summary written by George Sinas of Sinas Dramis Law Firm.

  •   Elimination of lifetime care- Currently lifetime medical and rehabilitation coverage is available, the proposed legislation replaces this with a lifetime cap of $10 million.  Intensive care services in a hospital can easily reach $350,000 in one day.
  • Restricted Benefit Eligibility of products, services or accommodations- This bill goes back to 'all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery or rehabilitation.' But there are further restrictions to these benefits.
         *  No coverage for experimental treatment or participation in
            research projects. 
        *  Requires benefit to be proven to have lasting positive results.
        *  No reimbursement for products or services an able-bodied person
           would also require. This one is already  making vehicle and home
           modifications difficult based on the Admire vs Auto Owners  
        *  No reimbursement for products, services, or accommodations for 
           the convenience of the individual, care giver or care provider.  This
           will make it difficult to get a patient lift for someone the care giver 
           has difficulty transferring.
        *  Products and services must be provided in the most appropriate
           location where the service may, for practical purposes , be safely     
           and effectively provided."
  • Rehabilitation Benefits Limited limitations are basically for 1 year
    unless 'rehabilitation is reasonably likely to produce significant rehabilitation.'  I would assume it would be up to the insurance company or their representative to decide the definition of 'significant rehabilitation.'
  • Attendant Care benefits to be severely limited.
        * In-home attendant care given by family members limited to 56 
          hours per week (i.e. 8 hours per day) and capped at $15.00 per
          hour regardless of level of care provided or whether the family
          care provided is licensed or works for a licensed agency.
In-home attendant care provided by non-family or household
          members is limited to 16 hours per day, regardless of the patient's  
          needs or the number of people required to render the care.  If the
          attendant care is needed 24 hours per day, it is only compensable if
          family or other household members render care 8 hours per day and
          an outside care provider  renders care the other 16 hours per day.  If
          more than 1 care provider is needed at the same time, payment is
          available for only 1 care provider.  After 30 days of attendant care,
          there is a patient copay of $200.00 per month!!  

  • Managed care option-  Would allow, not mandate, auto insurance companies to provide policyholders with a managed care option, which provides savings (in the form of a premium discount) for individuals utilizing a preferred provider network for services.  This proposal allows for the use of co-pays (both standard and penalty) when an individual utilizes out-of-network providers and deductibles as a way to control costs.
  • Home modifications significantly limited with a maximum lifetime benefit of $50,000.00.

  • Special transportation vehicles-Modifications to vehicles must be 'directly necessitated by and related to the injured person's injuries.'  In addition this transportation benefit is capped at $50,000 one every seven (7) years. 
  • Medical fee schedules-  Creates a medical fee schedule system in 2 ways:
        *  Limits what providers may charge for services.  Language of bill
           maybe subject to be interpreted as to limit the provider to the     
           lowest amount received for services which could possibly mean
           reimbursed at Medicaid reimbursement levels.  I don't know how
           much you know about Medicaid reimbursement levels but they have
           become so low that companies and providers serving Medicaid
           clients have actually gone out of business.
  • Motorcycle claims-  Motorcyclists are only entitled to $250,000 of PIP coverage regardless of how or why the accident happened.  That's less than one day in intensive care.
  • Assigned claims-  Patients receiving benefits through an Assigned Claims Facility (ACF) are limited to $250,000 of coverage.
  • HICA fix- Authorizes a $25 assessment on all auto insurance policies to solve the HICA tax shortfall by spreading the base of the tax to auto insurers as they too provide significant medical benefits.  This would fill a substantial hole in hospital funding going forward.
  • Non-residents-The claim of a non-resident is limited to $50,000, which apparently includes wage loss and replacement services and seems to apply regardless of where the accident happened or if the non-resident was a passenger in a Michigan insured vehicle.
  • Payment denials (we've all been seeing more of these lately.)  Patients or provideres who have had payment of benefits denied can question the insurer's denial by discussing the issue with a reviewer who 'an insurer shall designate.'  (I would imagine the insurer is also allowed to pay the designee for the review as well.)
  • Attorney fee penalties-  Attorney fee penalties against insurers are severely limited.  This bill further states 'evidence of the manner in which an insurer processed the claim for benefits is not admissible at trial of an action to recover benefits under this chapter.'  Whose best interest does this serve?
  • Loss of jury trial right-  This Bill provides that all questions dealing with 'whether a charge is reasonable or whether a product, service, or accommodation is medically appropriate and medically necessary is a question of law to be decided by the court' not a jury.  This doesn't seem constitutional.
  • Illusory premium reductions-  This Bill requires insurers to reduce rates by 10% from what they were charging except for drivers with tickets or accidents.  However insurers can increase rates one year later without limitation.
  • Closing of the MCCA-  The Bill closes the current MCCA and authorizes opening a new Catastrophic Claims Association that would reimburse insurers for losses between $530,000 and $1,000,000.  In doing so, it allows the current MCCA to keep issuing annual premium assessments (we'll still be paying into the fund) even though it will never have another new patient.  When the last patient serviced by the current MCCA dies, all of the money that is then in the MCCA will be transmitted to the new Catastrophic Claims Association, rather than the Michigan rate payers.
  • Low cost auto insurance option-  The development of a low cost auto insurance option may help to reduce the large amount of individuals driving without insurance in the greater Detroit area.  This low cost option could be made available to individuals meeting certain income thresholds and/or residency requirements and would offer a low level benefit that would be much more affordable than current policy offerings (e.g. PIP choice.)  If benefits wrer to run out on this population through the auto insurance policy, other options would be available through private health insurance (as required under under the ACA), Medicare (seniors or disability) or Medicaid. 
  • Retroactivity- The Bill provides that virtually all of the reductions in benefits and charges contained in the Bill are retroactive to any claim that occurred prior to the passage of the new Bill. 

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