Auto Insurance Fix Is 2017’s ‘Lobbyist Full Employment Act’

Hospitals opposed to limits on how much they can charge crash victims enter full-spin mode

The Michigan Health and Hospital Association has run an advertisement meant to defeat legislation going through the state House. In it, a teenage girl claims that if the changes being discussed for Michigan’s no-fault auto insurance law had been in place, she wouldn’t have been able to get her physical therapy paid for.

Readers who click on the ad are directed to a webpage where they can add their name to a form letter expressing opposition to proposed reforms.

The letter reads in part: “I am writing to ask you to vote no on the HB 5013 proposal … it does not adequately protect Michigan drivers and would not truly reduce rates for existing plans.”

ForTheRecord says: The claim that recently introduced legislation to reform Michigan’s no-fault insurance law would result to accident victims not receiving the care they need is misleading at best.

The video with the claim that Michigan’s no-fault insurance allowed the girl to receive physical therapy, was released in 2015 to criticize another piece of legislation. It was created with clips from another video released by the hospital association in 2013 in an attempt to defeat yet another bill. Both the 2013 and 2015 bill died, and both were very different from the 2017 reform bill recently introduced in the House.

Sponsors say the new legislation will remove the power hospitals have to charge excessive prices for the care they give to people injured in car crashes. That, the argument goes, will slow the rate of increase in auto insurance premiums. Under current law, insurers are required to reimburse an unlimited amount of emergency and long-term care services.

Insurance companies contend that hospitals take advantage of this part of no-fault by charging above-market prices to treat crash victims. They also allege that other providers exploit long-term care provisions in similar ways. Finally, they say that the original purpose of Michigan’s no-fault insurance law – to not make every injured person have to file a lawsuit – has been subverted by attorneys exploiting various loopholes.

The current bill would not end unlimited personal injury protection (PIP) for insurance customers who choose that, but it would place caps on how much hospitals and other providers could charge for specific services. It would also permit vehicle owners to purchase policies that limit PIP reimbursements to $250,000 or $500,000.

Here is how MichiganVotes.org described the limits on charges by hospitals and other providers:

"Medical service providers and hospitals could not charge more than 125 percent of the rates allowed under the federal Medicare program for emergency medical care, and non-emergency care and services would be capped at 100 percent of Medicare rates. Services not covered by Medicare would be capped at a provider’s average rate for non-PIP cases. Limits would also be applied to long-term care costs including weekly ‘attendant care’ hours, nursing care, necessary ground transportation and more. Permanent impairment and disability lawsuits would be subject to revised procedures, definitions and burden of proof standards.”

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