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Mason — A brain injury rehabilitation clinic and the guardians of two people injured in catastrophic crashes have filed suit against two insurance companies in an effort to declare unconstitutional the no-fault auto insurance reform that became law four months ago.

The lawsuit challenges two main parts of the reform that opponents argue are unconstitutional: the limitations on reimbursement for in-home attendant care services provided by family members and the fee schedule for reimbursement from auto insurance companies to medical providers, according to a statement from the Coalition Protecting Auto No-Fault, a prominent interest group involved in the no-fault auto insurance debate.

The suit contends the new law's limitations violate the plaintiffs' due process, equal protection and contract rights and asks the judge to prohibit the insurance companies from enforcing them. 

Filed Thursday against USAA Casualty Insurance Company and Citizens Insurance Company of America, the Ingham County lawsuit was assigned to Circuit Judge Wanda Stokes in Mason.

Calls to USAA and Citizens were not immediately returned. 

Stokes, a December appointee of Republican former Gov. Rick Snyder, initially was brought in by Snyder to oversee the cleanup of issues with Michigan's Unemployment Insurance Agency, which falsely accused thousands of people of fraud. 

Stokes also is a former general counsel at Ford Motor Co. and an attorney and director at Auto Owners Insurance Co., according to her biography on the Ingham County website. She was a lawyer at one time at the Fieger, Fieger, Kenney & Johnson law firm in Southfield, according to a Snyder administration press release.

The legislation signed into law in late May was “rammed through” by the Michigan House and Senate and eliminated several insurance protections, including lifetime medical care, according to the coalition, which bills itself as representing health care providers, patient advocates and accident survivors.

Dr. Michael Andary, an East Lansing brain injury physician and plaintiff in the case, said he would have to hire outside help for his wife Ellen, who was injured by a drunken driver in December 2014, rather than receive reimbursement for 24-hour care provided by family members.

“In-home attendant care decisions are among the most important, and intimate, that anyone can make,” said George T. Sinas, general counsel for CPAN and the attorney on the lawsuit. “Survivors don’t want — and certainly should not have to tolerate — big government determining who can come into their home to provide care.”

Sinas called the legislation “a stain on the legal and moral conscience of this great state.”

The premium Michael and Ellen Andary paid for their USAA insurance was "priced and sold based upon the fact that said policy entitled her to full in-home attendant care services without regard to the identity of the service provider, and further entitled her to reimbursement for all reasonable charges," the lawsuit said. 

The second plaintiff, Philip Krueger, was injured in a pickup truck crash in 1990 and is considered a legally incapacitated adult for whom his father, Ronald Krueger, serves as guardian. At the time of the crash, Krueger of Ann Arbor was insured by Citizens and has received services since 1997 through the Ann Arbor-based Eisenhower Center, the brain injury rehabilitation clinic that is party to the suit.

The lawsuit challenges the in-home care and fee schedule provisions not just for people injured prior to the law's passage, such as Andary and Krueger, but also as it applies to services for any future, insured car crash victims.  

The new law’s fee schedule limits medical providers from charging insurance companies more than 55% of what they formerly charged, said CPAN President John Cornack, who also is the CEO of Eisenhower Center.

“The new law is anti-business and essentially amounts to price fixing, which will force honest, hard-working providers out of business,” Cornack said.

Last week more than 2,000 people gathered on the Capitol lawn for the MI Auto Insurance Promise rally, organized by groups that included CPAN and opposing the changes to the law.

Michigan traditionally has had among the nation's highest auto insurance rates due mainly to the state's unique requirement that motorists purchase auto insurance policies that guarantee uncapped lifetime medical benefits in the event of catastrophic crash injuries. Under the new changes, insurers will be able to sell reduced coverage policies but will be required to reduce medical premiums for eight years. 

The changes had largely bipartisan support, including that of Democratic Gov. Gretchen Whitmer, Republican House Speaker Lee Chatfield and GOP Senate Majority Leader Mike Shirkey. 

But some Detroit area legislators argued the reforms didn’t go far enough to address alleged discriminatory rate-setting practices, and medical providers and personal injury attorneys have criticized other aspects of the law.

The rally came the same day House Democrats requested the Michigan Department of Insurance and Financial Services investigate a rise in consumer complaints since the May passage of the reforms. The specific complaints needing review included unexplained increases in insurance rates and new insurance companies “springing up” to evade forthcoming rollback policies, according to the caucus statement.

eleblanc@detroitnews.com

(517) 371-3661

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