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Michigan Supreme Court Lansing, Michigan

Opinion
ADVOCACY ORGANIZATION FOR PATIENTS & PROVIDERS, Plaintiff-Appellant, v AUTO CLUB INSURANCE ASSOCIATION, ALLSTATE INSURANCE COMPANY, CITIZENS INSURANCE COMPANY, FARM BUREAU INSURANCE COMPANY, FARMER'S INSURANCE EXCHANGE, FRANKENMUTH MUTUAL INSURANCE COMPANY, IMPERIAL MIDWEST INSURANCE COMPANY, SECURA INSURANCE MUTUAL COMPANY, STATE FARM INSURANCE COMPANY, TRANSAMERICA INSURANCE GROUP, WOLVERINE MUTUAL INSURANCE COMPANY, LAHOUSSE-BARTLETT DISABILITY, MANAGEABILITY, INC., MEDCHECK MEDICAL AUDIT SERVICES, RECOVERY UNLIMITED, INC., and AUTO-OWNERS INSURANCE COMPANY, Defendants-Appellees. _______________________________ MEMORANDUM OPINION

Chief Justice:

Justices:

Clifford W. Taylor

Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

FILED MARCH 8, 2005

No. 124639

This declaratory judgment action concerns obligations under the no-fault act, MCL 500.3101 et seq., to pay

medical

expenses. two

Plaintiffs of

are

individual

medical injured of

providers, victims of

guardians

catastrophically and an

automobile

accidents,

organization

health-care providers and patients that principally seeks to protect the legal rights of both groups. either policies no-fault to insurance companies or the that Defendants are have issued

Michigan

motorists

review

companies

employed by one or more of those insurers to review medical bills arising from automobile accidents. MCL 500.3107(1)(a) requires that an insurer pay "all reasonable products, charges services incurred and for reasonably for an necessary injured

accommodations

person's care, recovery, or rehabilitation."

MCL 500.3157

provides that a medical provider "may charge a reasonable amount for the The products, charge shall services not and accommodations the amount for cases the like not

rendered. person or

exceed

institution services and

customarily

charges in

products,

accommodations

involving insurance." After a hearing on the parties' respective motions for summary disposition, the trial court ruled that defendants were entitled to review any medical charges and pay only those determined to be reasonable. The trial court further

ruled that even though a medical provider's charge does not

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exceed

the

amount

that

provider

customarily

charges

in

cases not involving insurance, that fact alone does not establish that the charge is reasonable. The Court of Appeals affirmed. NW2d 569 (2003). 257 Mich App 365; 670

It ruled that it is for the trier of fact

to determine whether a medical charge, albeit "customary," is also reasonable. 257 Mich App 379.

Because we agree with the Court of Appeals resolution of this issue, and the others presented to it, we affirm. MCL 7.302(G)(1). Clifford W. Taylor Maura D. Corrigan Stephen J. Markman

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S T A T E

O F

M I C H I G A N

SUPREME COURT

ADVOCACY ORGANIZATION FOR PATIENTS & PROVIDERS,
Plaintiff-Appellant, v AUTO CLUB INSURANCE ASSOCIATION, ALLSTATE INSURANCE COMPANY, CITIZENS INSURANCE COMPANY, FARM BUREAU INSURANCE COMPANY, FARMER'S INSURANCE EXCHANGE, FRANKENMUTH MUTUAL INSURANCE COMPANY, IMPERIAL MIDWEST INSURANCE COMPANY, SECURA INSURANCE MUTUAL COMPANY, STATE FARM INSURANCE COMPANY, TRANSAMERICA INSURANCE GROUP, WOLVERINE MUTUAL INSURANCE COMPANY, LAHOUSSE-BARTLETT DISABILITY, MANAGEABILITY, INC., MEDCHECK MEDICAL AUDIT SERVICES, RECOVERY UNLIMITED, INC., and AUTO-OWNERS INSURANCE COMPANY, Defendants-Appellees. No. 124639

CAVANAGH, J. (concurring). At oral argument it became very clear that defendants' methodologies in determining reasonableness were never at issue at the trial court level, which accounts for the dearth of evidence regarding those methodologies. Counsel

for plaintiff admitted that the reason discovery was not more directed toward illuminating the methodologies was

because no one asked plaintiffs before this Court's leave order to discuss how reasonableness should be assessed.

Although I agree with the Court of Appeals conclusion that "reasonable" and "customary" are two separate inquires, I view its reference to the 80th percentile test, given this record, as dicta. was not Given before that the the lower question courts, of and,

reasonableness

consequently, discovery did not center on the question, I would be apprehensive about sanctioning any method without knowing its full details. I agree also with the Court of

Appeals concurrence that urged our Legislature to address this issue and implement some guidelines in this area, as other no-fault states have done. Michael F. Cavanagh Marilyn Kelly

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S T A T E

O F

M I C H I G A N


SUPREME COURT


ADVOCACY ORGANIZATION FOR PATIENTS & PROVIDERS, Plaintiff-Appellant, v AUTO CLUB INSURANCE ASSOCIATION, ALLSTATE INSURANCE COMPANY, CITIZENS INSURANCE COMPANY, FARM BUREAU INSURANCE COMPANY, FARMER'S INSURANCE EXCHANGE, FRANKENMUTH MUTUAL INSURANCE COMPANY, IMPERIAL MIDWEST INSURANCE COMPANY, SECURA INSURANCE MUTUAL COMPANY, STATE FARM INSURANCE COMPANY, TRANSAMERICA INSURANCE GROUP, WOLVERINE MUTUAL INSURANCE COMPANY, LAHOUSSE-BARTLETT DISABILITY, MANAGEABILITY, INC., MEDCHECK MEDICAL AUDIT SERVICES, RECOVERY UNLIMITED, INC., and AUTO-OWNERS INSURANCE COMPANY, Defendants-Appellees. _______________________________ WEAVER, J. (concurring). I join fully in Justice Cavanagh's concurrence. I write separately because this case is further No. 124639

evidence that this Court needs to address and open for public comment the specific procedures to be followed when a justice decides whether or not to participate in a case, and whether Const 1963, art 6,

Download ADVOCACY ORGANIZATION FOR PATIENTS V AUTO CLUB INSUR ASSN.pdf

Michigan Law