LANSING, Mich.--(BUSINESS WIRE)--A broad collection of organizations representing patients and Michigan health care providers are speaking out about the dangers of Michigan’s new auto insurance law through legal channels.
With a major hearing set for Wednesday in a lawsuit seeking to declare key elements of Michigan’s new auto insurance law unconstitutional, six Michigan associations representing tens of thousands of members have filed friend-of-the-court briefs (amicus briefs) in support of an 18-count lawsuit entitled Andary et al v. USAA Casualty Insurance Company et al.
Taken together, the briefs and the lawsuit raise fundamental, disturbing questions about the impact that the state’s new auto insurance law will have on patients and medical providers. The lawsuit attacks the new law for several reasons, including that: (1) it is unconstitutional because it retroactively reduces benefits under insurance policies purchased by patients years before their injury and for which they paid premiums; (2) it is unconstitutional because government cannot restrict a patient’s right to choose in home attendant care providers by restricting reimbursement to only those providers approved by the government; and (3) it is unconstitutional because government has engaged in inappropriate price fixing by lowering insurance benefit reimbursement rates for certain specific medical providers to an amount not to exceed 55% of what those providers charged last year, which will have the effect of causing many of those providers to go out of business, thereby threatening access to the medical care many patients treating with those providers depend upon.
The lawsuit was brought on behalf of several plaintiffs, including Ellen Andary, who suffered a catastrophic brain injury in a 2014 accident caused by a drunk driver and, has ever since, been severely disabled and dependent upon the auto no-fault insurance benefits she purchased years before her accident. Other plaintiffs include the Eisenhower Center, located in Washtenaw County, which provides residential services to severely brain damaged patients, and Philip Krueger, a severely disabled patient of Eisenhower Center. The six Michigan associations who have filed amicus briefs in support of the plaintiffs’ lawsuit are: Brain Injury Association of Michigan (BIAMI), Michigan Brain Injury Provider Council (MBIPC), Michigan State Medical Society (MSMS), Michigan Osteopathic Association (MOA), Michigan Association of Chiropractors (MAC), and Coalition Protecting Auto No-Fault (CPAN). Attorney George T. Sinas of the Sinas Dramis Law Firm is lead counsel for the plaintiffs.
Joanne Swanson, amicus attorney for CPAN, said that for many years, Michigan residents have paid their auto insurance premiums with the understanding that, if they were injured, they would receive, under their purchased policies, all reasonably necessary products, services, and accommodations for their care, recovery, or rehabilitation, as defined by law and required by their policies when those policies were purchased.
“The retroactive nature of the law means that the care received by accident victims—many of whom will need that care and therapy for the rest of their lives—will be drastically limited and diminished,” Swanson said. “That violates the contracts clause of the Michigan Constitution.”
CPAN Administrative Director Martha Levandowski said that the only winners under the new law are big auto insurance companies.
“This law diminishes the level of care that many patients currently receive, which is unfair to those patients and is not necessary nor reasonable to achieve the stated goal of reducing premiums,” she said. “In fact, as insurance representatives have admitted, some premiums will go up, and rate discrimination against residents of lower income areas such as Detroit may continue.”
Tom Constand, President and CEO of BIAMI, said the limitation on in home family provided attendant care retroactively interferes with the vested contractual rights and constitutional rights of motor vehicle accident victims.
“Hundreds of survivors who’ve benefitted from family-provided attendant care for years will be traumatized by the harsh nature of this retroactive provision,” he said. “The highly personal nature of attendant care and the importance of family involvement in a loved one’s rehabilitation over many years, will be severely compromised if patients are forced to deal with strangers.”
Liisa Speaker, the amicus attorney for BIAMI, added: “Legislative changes to the law are typically done prospectively. However, the retroactive nature of the new no-fault law effectively breaches the contract of insurance between the insurer and its insureds, whose rates and subsequent home care structure were established by the previous payment of premiums.
The MSMS, which represents more than 15,000 physicians in Michigan, called the law an example of government interference.
“The quality of care that patients who have suffered spinal cord or traumatic brain injuries receive has a profound impact on their quality of life,” said MSMS CEO Julie Novak. “The inability to provide the care that patients need, resulting in the deterioration of their condition, will simply increase costs elsewhere in the system. This government interference could mean the difference between life and death for some accident victims.”
Timothy F. Hoste, President of MBIPC, noted that his organization represents over 100 post-acute care providers who open their doors every day to provide care and rehabilitation to survivors of catastrophic automobile crashes. The 55% fee schedule imposed upon providers in Public Act 21 and 22 will force many of them out of business, leaving some of the most vulnerable Michiganders without any ability to receive the care they require, he said.
“We hope the courts will agree that the new no-fault law violates the due process rights of post-acute care providers because the mandated 45 percent reduction in our rates will not allow us to continue operating our businesses,” Hoste said. “This will not only result in the loss of thousands of jobs across our state, but the most tragic reality is anyone who is catastrophically injured in a car crash now or in the future will be unable to access the care and rehabilitation they need to recover from their injuries.”
The MOA and MAC, who filed a brief jointly, agreed.
“While the intended purpose of the 55% fee schedules under the new law was to lower auto insurance premiums, they will have little chance of achieving that goal,” said MAC Executive Director Kristine Dowell. “Instead, those fee schedules will have devastating effects on patients as well as the providers of certain medical and chiropractic services.”
MOA Executive Director Kris Nicholoff added: “The truth is, some services will no longer be available to victims of automobile accidents because the 55% fee schedule will cause some providers to go out of business. This means that numerous catastrophically injured patients will lose the quality of care they need. Some will lose their homes — when residential rehabilitation providers go out of business, there will be nowhere for some patients to go.”
Tammy Hannah, President and CEO of Origami Brain Injury Rehabilitation Center, which is a member of MBIPC, added that the 55% fee schedule will have a devastating impact on her organization, which serves about 600 patients annually and employs over 130 individuals.
“The 45 percent funding cut will bankrupt those who already operate under a fair and reasonable fee structure,” she said. “This change will have dire implications on thousands of individuals served throughout the state who will be denied access to the rehabilitation they need, forcing them into nursing homes and psychiatric facilities.”
For more information, go to protectnofault.org/lawsuit-updates.
CPAN is a broad coalition of health care providers, patient advocates and accident survivors who are committed to preserving Michigan’s model auto no-fault insurance system and ensuring that all Michigan drivers have fair and affordable rates. For more information, please visit www.CPAN.us.