Transportation Law Hub

A recent ruling by the Michigan Court of Appeals provided some much-needed clarity about insurance reimbursement rates for healthcare services rendered to parties involved in motorcycle accidents who maintained insurance policies prior to Michigan’s No-Fault Act amendments in 2019.

The appellate court recently held in Miracle Hands Home Care, Inc. et al. v. Geico General Insurance Company et al. – unpublished per curiam on Sept. 18 (No. 21-011747-NF) – that, regardless of when the policy was issued, motorcycle accidents that occurred after June 11, 2019 are subject to the limitations set forth in MCL 500.3157, also known as the “fee schedule” pertaining to treatment rendered after July 1, 2021.

In September 2019, Jorge Fuentes was seriously injured after his motorcycle collided with a motor vehicle. Fuentes received in-home care from Miracle Hands between August 2020 and February 2022 for his injuries.

MCL 500.3114(5) provides in pertinent part:

(5) Subject to subsections (6) and (7), a person who suffers accidental bodily injury arising from a motor vehicle accident that shows evidence of the involvement of a motor vehicle while an operator or passenger of a motorcycle shall claim personal protection insurance benefits from insurers in the following order of priority:

(a) The insurer of the owner or registrant of the motor vehicle involved in the accident.

(b) The insurer of the operator of the motor vehicle involved in the accident.

(c) The motor vehicle insurer of the operator of the motorcycle involved in the accident.

(d) The motor vehicle insurer of the owner or registrant of the motorcycle involved in the accident.

Considering the accident involved a motorcyclist injured in a collision with a motor vehicle, the parties agreed that Fuentes should claim Personal Protection Insurance (PIP) benefits from Geico, the insurer in the order of highest priority under MCL 500.3114(5). Notably, Fuentes was not a party to the Geico policy, because he sought PIP insurance benefits from the other accident-involved motor vehicle’s insurance policy, MCL 500.3114(5), and the policy made no mention that its coverage applied to motorcycles or motorcyclists.

Fuentes brought a claim against Geico for unpaid PIP benefits. After disagreements arose over whether the fee schedule in MCL 500.3157 applied to cap the amount reimbursable for services rendered to Fuentes, the defendant, Miracle Hands, brought its own complaint against Geico seeking reimbursement.

Geico moved for partial summary disposition against Miracle Hands, arguing that, because the accident occurred after MCL 500.3157 was amended, the fee schedule in the act limited Miracle Hands’ reimbursement for treatment rendered after July 1, 2021. In opposition, Miracle Hands relied on Andary v. USAA Cas. Ins. Co. (“Andary I”), 343 Mich App 1; 996 NW2d 784 (2022), rev’d in part on other grounds 512 Mich 207 (2023), claiming that the fee schedules did not apply.

Ultimately, the trial court granted partial summary disposition to Geico finding that, because Fuentes’ accident occurred after the effective date of the 2019 No-Fault act amendments, Miracle Hands’ claims for treatment rendered after July 1, 2021, were governed by the fee schedules of MCL 500.3157.

While this case was ongoing, the Michigan Supreme Court decided Andary v. USAA Cas. Ins. Co., 512 Mich 207; 1 NW3d 186 (2023), known as Andary II, which affirmed that the 2019 amendments to Michigan’s No-Fault insurance law do not apply retroactively to people injured before June 11, 2019. The Supreme Court ruled that these individuals are still entitled to the “reasonable and customary” standard for medical benefits that was in place before the amendments, and they cannot have their benefits reduced by the reformed fee schedule, MCL 500.3157.

The plaintiffs argued that because the policy involved was issued before the enactment of the 2019 amendments, Andary II’s ruling against retroactive application of MCL 500.3157 applied to prevent the limitation of Fuentes’ PIP benefits. They also claimed that the Michigan Legislature did not intend for MCL 500.3157 to apply to collisions occurring before July 2, 2020. The trial court rejected these arguments, and Miracle Hands appealed.

Concerning the retroactive application of MCL 500.3157, the Michigan Court of Appeals held that the fee schedule is applicable to policies that were in effect before the statute was amended. Andary II limited its holding “to those individuals . . . who are entitled to PIP benefits because they were directly covered by a No-Fault insurance policy at the time of their accident either as the named insured or as a covered individual under the policy.” Id. at 257.

Relying on Andary II, the appellate court held that Andary II’s ban on the retroactive application of the fee schedules in MCL 500.3157 depends on whether a plaintiff has both a statutory and contractual right to claim PIP benefits. In Miracle Hands, Fuentes did not maintain a contractual right to claim personal injury protection benefits as Fuentes was not a party to the Geico policy, and the policy made no mention that its coverage applied to motorcycles or motorcyclists. Accordingly, because Fuentes could only make a claim for PIP benefits as a statutory right, the fee schedule is applicable to policies that were in effect before the statute was amended.

The appellate court also held that even though the accident occurred before July 2, 2020, MCL 500.3157 is applicable. Previously, individuals injured in motor vehicle accidents were entitled to receive unlimited PIP benefits. Douglas v. Allstate Ins. Co., 492 Mich 241, 257; 821 NW2d 472 (2012). The 2019 amendments, however, added MCL 500.3107c and MCL 500.3107d, which allowed applicants or name insureds to limit or decline PIP coverage for policies issued or renewed after July 1, 2020. The amendments also added MCL 500.2111f(1), which requires insurers to file premium rates for PIP benefits before July 1, 2020, for insurance policies effective after July 1, 2020.

The plaintiff relied on these statutes to argue that MCL 500.3157 does not apply to accidents that occurred before July 2, 2020. However, unlike MCL 500.3107c and MCL 500.3107d, the text of MCL 500.3157 does not distinguish the fee schedule’s applicability from the policy’s effective date. It merely details the amount of payment owed to medical providers for treatment or rehabilitative training rendered after July 1, 2021. Thus, MCL 500.3157 was in effect as of June 11, 2019.

The appellate court further held that the July 1, 2020, deadline used in MCL 500.3107c, MCL 500.3107d, and MCL 500.2111f applied to voluntary changes in liability limits and premiums made by an insured, not to the mandatory reimbursement limitations imposed on medical providers, which is the subject of MCL 500.3157. The appellate court ruled that MCL 500.3157 does not impose any limitation regarding motorcycle accidents occurring before July 2, 2020.

Accordingly, regardless of when the policy was issued, motorcycle accidents which occurred after June 11, 2019 are subject to the limitations set forth in MCL 500.3157, also known as the “fee schedule” pertaining to treatment rendered after July 1, 2021.