Michigan House GOP plan would aid some medical providers after July 1 no-fault fee cut

Beth LeBlanc
The Detroit News

House Republicans are considering a plan that would set aside money to tide over certain health care providers when their reimbursement rates from insurance companies are cut by 45% on July 1.

The $10 million fund would be administered by the Michigan Department of Insurance and Financial Services to providers who can prove the fee schedule pushed them into a "systemic deficit," according to a summary of the plan obtained by The Detroit News. 

The department in turn would need to provide a final report to the Legislature that could guide any future changes to the fee schedule contained within the 2019 historic no-fault auto insurance reform.

The funds would be awarded on a first-come, first-served basis with no provider receiving more than $500,000 in a given year.

Michigan House

Medical providers and individuals injured in catastrophic car crashes have been expressing concern in recent weeks over a fee reduction set to take effect July 1. 

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

In-home providers have said they won't be able to sustain the cut and will go out of business, leaving crash victims seeking alternatives. 

But insurance companies have accused the medical companies of bundling their services in order to obscure the actual cost of the service and the company's profit. Earlier this month, the Insurance Alliance of Michigan said the new auto reform law was working to lower the state's highest-in-the-nation auto insurance costs and accused medical providers of "scare tactics." 

Gov. Gretchen Whitmer asked the GOP-led Legislature last week to find a bipartisan solution to address the expected effects of the fee cut but didn't specify any possible solutions.

House and Senate leadership so far have taken what amounts to a wait-and-see approach. But both Republican and Democratic lawmakers have spoken publicly about the need for changes to the plan.

The Michigan Brain Injury Provider Council said Monday it was "encouraged" by the Legislature's acknowledgment of the issue. But it argued the House should also consider bills that have already been introduced to lessen the effects of the fee cut, said Tom Judd, president of the council. 

"We hope that this proposal offers the same level of solution, ensuring care is not disrupted and vulnerable citizens are not displaced from the care they are receiving from specialized service providers," Judd said. "We also hope that the proposed program works for providers so that their resources can focus on the care they need to provide for all their patients.”

Under the House plan floated by the Republican caucus, medical providers would have to show details of their services to prove their duress is more than just a profit loss, but instead a systemic deficit. 

Among the documentation that would need to be provided to the Department of Insurance and Financial Services would be the total number of patients served, the insurance billed for care, a list of auto insurance companies and other forms of insurance billed for care in 2019, and proof that reimbursement was denied by auto insurance carriers and upheld by the department. 

Medical providers also would need to provide documentation that their charges are below regional and market averages, that there were "good-faith efforts" to adjust the business model to accommodate the fee cut, financial statements showing a systemic deficit, or "any other information deemed necessary by the department."

Providers who incorporated or re-incorporated after Jan. 1, 2020 wouldn't be eligible. 

DIFS would in turn develop the application process within 60 days of the $10 million being appropriated and would be required to consider all applications within 30 days of receipt.

eleblanc@detroitnews.com