Appellate Court Ruling on Coordinated Insurance Policies Could Streamline Defense of Medical Provider Claims

A recent Michigan Court of Appeals ruling has clarified a plaintiff’s burden of proof in cases involving coordinated motor vehicle insurance policies.

In the recent unpublished opinion in Jawad Al Shah, M.D., P.C. v Liberty Mutual Insurance Company, the appellate court clarified and rejected several common defenses that medical providers raise in response to dispositive motions regarding coordinated policies.

When a coordinated policy is issued, the expectation is that the insured will take reasonable efforts to use their health insurance to pay for medical treatment after a motor vehicle accident. However, in recent years, with the proliferation of medical providers that treat solely accident victims, insurers have found themselves bombarded with claims that should have been billed to and paid by health insurers.

When a medical provider files a complaint seeking reimbursement for the claims, attorneys from Plunkett Cooney and other litigation defense firms file dispositive motions to dismiss the claims based on the seminal case, Tousignant v Allstate Insurance Company, 444 Mich 301 (1993), arguing that the medical provider has either not submitted its bills to the health insurer or it has not provided the necessary information for the insurer to determine if it is liable for payment.

In response to those motions, medical providers have argued for years that: 1) the insurer must prove that the insured received a lower premium in exchange for agreeing to the coordination of medical benefits, 2) the insurer has failed to produce the injured person’s health insurance policy or any evidence that the medical policy would cover the claimed benefits, and 3) the coordinated policy is an affirmative defense meaning it is the insurer’s burden of proof to prove it  is not liable due to the applicable health insurance

Specifically in this recent decision, the medical provider billed HAP (the injured person’s health insurer), and it produced the HAP explanation of benefits to Liberty Mutual Insurance Company, claiming entitlement to the remainder of the charges that were either not paid or not paid in full. Liberty Mutual argued that the provider had produced no evidence as to why the claims were denied or partially paid so it was impossible to determine what, if any, liability Liberty Mutual had under the coordinated policy.

In response, the medical provider argued that Liberty Mutual did not prove it charged a reduced premium or that the claimant was aware that they agreed to coordinated benefits; it did not produce the health insurance policy; and that the mere submission of claims to the health insurer was all the medical provider needed to do to satisfy the requirements of Tousignant and Michigan’s No Fault law.

The appellate court has finally weighed in and in the Jawad Al Shah case, it confirmed what defense counsel have known for years – it is the medical provider’s burden to produce the health insurance policy, to explain why the charges being claimed were not paid by the insurance policy, and an insurer does not have to show a reduced premium to prove a policy is coordinated if the plain language of the policy states it is coordinated for medical benefits. While an unpublished case, this decision should streamline defense of medical provider claims in cases where there is a coordinated policy.

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