Whitmer urges lawmakers to make changes to no-fault law ahead of July 1 fee cut

Beth LeBlanc
The Detroit News

Gov. Gretchen Whitmer is urging the Legislature to make changes to the new auto no-fault law before the end of the month, but did not say what those changes should encompass. 

Whitmer's Thursday letter to legislative leaders comes amid concern from individuals injured in catastrophic car crashes and the medical providers who care for them over a fee reduction set to take effect July 1

The reduction would slash the money insurance providers reimburse medical providers to 55% of what the medical provider was charging for the service in January 2019. 

In-home care providers say they cannot sustain the cut and will go out of business if it is implemented, leaving hundreds of crash victims seeking alternatives. 

Whitmer on Thursday urged the Legislature to make changes to the policy she signed into law on Mackinac Island in June 2019. The letter was addressed to House Speaker Jason Wentworth, Senate Majority Leader Mike Shirkey, Senate Democratic Leader Jim Ananich and House Democratic Leader Donna Lasinski. 

"The Legislature must act by July 1 to ensure some of our most vulnerable residents maintain access to their care," Whitmer wrote in the letter.

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House and Senate leadership have so far taken what appears to be a "wait and see" approach to the July 1 fee schedule change. But several Republican and Democratic lawmakers who voted on the bill in 2019 have expressed concerns about the effect the fee cut may have and a willingness to make changes. 

Shirkey said in a statement earlier this month that the plan is working, rates are dropping and Michigan's auto insurance is no longer the priciest in the nation. 

"We certainly must care for the most vulnerable among us, and we will look at taking up additional reforms that may be necessary when the plan goes fully into effect in July," said Shirkey, R-Clarklake.

Shirkey's spokeswoman, Abby Walls, noted Thursday that the governor's letter was "conspicuously devoid of a solution."

Whitmer's spokesman, Bobby Leddy, said the governor hopes to work with lawmakers "on a bipartisan solution to reform the fee schedule to ensure our most vulnerable maintain access to care."

Lawmakers made sweeping changes to Michigan's auto no-fault insurance law in 2019 in an effort to reduce Michigan's highest-in-the nation insurance premiums. 

The changes included mandated cuts to the Michigan Catastrophic Claims Association assessment, new lower-coverage policy options and more controversial measures that would limit the number of hours of care family could be reimbursed for providing to an injured love one and the 45% reimbursement cut set to take effect July 1. 

Drivers have saved at least $1 billion through mandated cuts to the Michigan Catastrophic Claims Association fee, which went from $220 in 2019 to $86 in 2020. 

And Michigan's car insurance premiums dropped 27% from last year to an average of $2,112, but the average Michigan premium remains 48% more expensive than the national average, according to Insure.com.

The Insurance Alliance of Michigan has said medical providers are using "scare tactics" to maintain opaque fees for services. 

For some services, medical providers can unroll service packages to break down services to line items that have a Medicare code and could be eligible for a reimbursement of 200% the Medicare fee under the 2019 law. 

But providers have said there are some services that aren't reimburseable under Medicare, including 24/7 supervision and help with daily tasks of living.

In response to Whitmer's letter, the Michigan Brain Injury Provider Council urged the Legislature to hold hearings on bills introduced this month that seek to lessen the effect of the fee schedule change. 

"We urge Gov. Whitmer, Senate Majority Leader Shirkey and House Speaker Wentworth to sit down at the table with auto insurance representatives and those of us who provide care to victims of catastrophic auto accidents," said Tom Judd, president for the council. "We have a chance to collectively find a solution that would prevent a second traumatic event from being inflicted on survivors.”