Legal Analysis: Despite Assurance from Committee Chair, HB 4612 STILL Includes Retroactive Benefit Restrictions
LANSING – On May 2, the Michigan House Insurance Committee held a second day of hearings before passing House Bill 4612 on a party-line vote. During testimony by Coalition Protecting Auto No-Fault (CPAN) legal counsel George T. Sinas criticizing the retroactive provisions in HB 4612, Committee Chair Pete Lund (R-Shelby Township), publicly stated that the bill was not intended to be retroactive to existing patients and that amendments to the bill would ensure that accident survivors currently receiving no-fault benefits would not be impacted.
“Either proponents of this legislation were intentionally misleading the public or they didn’t understand what they were voting on.” said CPAN President John Cornack. “Whichever way you read into it, the bottom line is that this bill will – in fact – reduce the level of care currently being provided to our state’s most seriously injured accident survivors.”
Legal analysis of the amendments to HB 4612 indicates that instead of fixing the retroactivity language pointed out by CPAN on April 26, there are specific amendments on attendant care and medical fee schedules that are clearly intended to impact existing auto injury patients. CPAN maintains that any attempt in HB 4612 to retroactively restrict auto injury benefits is UNCONSTITUTIONAL because the bill would essentially rewrite private contracts between insurers and policyholders.
“Michigan drivers purchased their insurance with the expectation that they would receive the care promised to them. Despite claims made during the House Insurance Committee hearing, and despite the amendments, this bill continues to allow insurance companies to break their promises to people who are already injured and have been receiving no-fault benefits,” said Cornack.
The retroactivity language in the bill was eliminated in §3107(5). However, language was then added to §3107(1)(a) specifying that losses occurring before Jan. 1 2014 are subject to the attendant care limitations set forth in §3107C and the fee schedule limitations set forth in §3157.
The bill also still redefines what benefits accident survivors are eligible for by limiting care to only what is “medically appropriate and medically necessary” [§3107(1)(a) – pg. 32] and “reasonably likely to result in meaningful and measurable lasing improvement” [[§3107(3)(f) – pg. 35]. Care would also be limited to that which is “provided in the most appropriate location where the service may, for practical purposes, be safetly and effectively provided” [§3107(3)(m) – pg. 37], and only as long as it is “reasonably likely to produce significant rehabilitation” [§3107(3)(i) – pg. 37].
Other reductions and limitations to benefits that remain in the bill include:
· Limited attendant care provided by families and agencies;
· Denial of services that don’t result in “meaningful and lasting improvement in the injured person’s functional status;”
· Reduced benefits for motorcycle claims;
· Limited non-resident coverage;
· Limited reimbursements to health care providers;
· Limited rehabilitation benefits; and
· Limited home modification benefits.
“Together, these restrictions will significantly alter the level of care provided to accident survivors,” said Cornack. “So much so, that Michigan’s once-great auto no-fault system will be practically unrecognizable.”
The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, hospitals and other health care providers working together to keep Michigan’s model no-fault insurance law intact. Learn more about CPAN by visiting www.ProtectNoFault.org.