New Proposed No-Fault Law Shafts Motorcyclists

On April 23, a dangerous new bill (HB 4612) was introduced by the Michigan House of Representatives. The bill would cap medical and other no-fault benefits to anyone injured when a motor vehicle is involved. The significant reductions to no-fault benefits proposed in this legislation will hurt all vehicle accident victims.  However, motorcyclists will be disproportionately worse off; significantly shafted!

Significant Losses for Accident Victims

The current no-fault system which you can read here, allows for “all reasonable charges incurred for the reasonable and necessary products, services and accommodations for the injured person's care, recovery and rehabilitation.” Stated Simply put, the current law requires the auto insurance company to pay all medical bills related to all medical treatment and care for life, and includes provisions for up to three years of wage loss and household chores (replacement services), as well as mileage relating to your medical care.  Bill HB 4612 would cap payment of medical bills at $1 million, and introduce other caps and limitations too numerous to list here.

Even More Cuts for Motorcyclists

Under the proposed legislation, motorcyclists would only be entitled to $250,000 total Personal Injury Protection (PIP) coverage, regardless of how or why the crash occurred. This apparently includes wage loss, replacement services, and medical mileage (see section 3107 (3)(C)). Consider the following hypothetical example:

A motorcyclist with a good job is inured and permanently disabled in an accident. If he qualifies for the full three years of wage loss replacement and the $20-per-day maximum household chores benefit for the same amount of time, he would only have $78,400 to pay medical bills if his benefit was capped at $250,000. More realistically, the medical bills he incurs close to the time of the accident would eat up the full $250,000, leaving little to no benefits to cover wage loss or household chores. Even worse, he would end up having to cover the rest of his medical bills relating to the accident for the remainder of his life.

You Can Make a Difference.

Click here to email your legislator, and let them know you are not happy with the proposed new law.  

Get the Facts, Read the Details

Here is a detailed summary of the changes proposed in this new law.

• Lifetime care is eliminated. Presently, medical bills are paid for life. This law will cap them at $1 million, and motorcyclists will have total PIP benefits capped at $250,000

• Auto insurance companies would only have to pay “all reasonable charges incurred for medically appropriate products, services and accommodations for an injured person's care, recovery and rehabilitation." There appear to be at least five ways of limiting the allowable expenses that go to these products, services or accommodations:

o       They cannot be used towards "experimental treatments or participation in research projects."

o       They must be "reasonably likely to result in meaningful and measurable lasting improvement in the injured person's functional status."

o       They must not be used for something that "would have been needed or used by the injured person or a member of the injured person's household, regardless of the loss occurrence."

o       They must not be provided "primarily for the convenience of the individual, the individual's caregiver, or the healthcare provider."

o       They must be used for products, services and accommodations "provided in the most appropriate location where the service may, for practical purposes, be safely and effectively provided."

•  The benefits for rehabilitation care are limited:

o       They must be used for "medically appropriate rehabilitation services that are reasonably likely to produce significant rehabilitation."

o       Benefits are limited to 52 weeks (one year) which can be extended for another 52 weeks if it is "reasonably likely to produce significant rehabilitation." Another extension is available only if “it is reasonably likely that longer treatment may produce significant, measurable improvement.”

• Attendant care would be significantly and severely limited:

o       Attendant care provided by family or household members in the home is limited to 56 hours per week. That is eight hours per day at no more than $15, regardless of the level of care being provided or if the family or household member holds care licenses (e.g.: registered nurse).

o       If in-home care is administered by an outside provider (i.e.: not by a family or household member), it is limited to 16 hours per day, even if the patient needs more than that. The only way to have 24-hour coverage is if a family or household member provides care for 8 hours per day, and an outside provider provided the other 16 hours.

o       For the first time ever, if a patient requires attendant care for longer than 30 days, they would be charged a co-pay. This would be 20%, up to $200 per month.

• Home modifications are significantly limited, and would only be paid if deemed “directly necessitated by and related to the injured person's injuries, if the accommodations are functionally necessary to meet the injured person's treatment, rehabilitation, maintenance and daily living needs.” A lifetime cap of $50,000 would also be imposed.

•  Limits would be imposed on specialize transportation vehicles:

o       The vehicle or modifications must be "directly necessitated by and related to the injured person's injuries.”

o       The transportation benefit would be limited to $50,000 during any seven-year period.  

• New fee schedules for medical services:

o       Healthcare providers may only charge the no-fault insurance company what they customarily receive for like or similar products, services and accommodations for patients not covered by PIP, not involving Medicare or Medicaid. There is a possible interpretation that would limit the healthcare provider to receive only the lowest amount received by that provider in any of those three scenarios.

If the auto insurance company requested information in order to determine appropriate reimbursement for what the provider customarily receives and that information was unavailable, not provided, or insufficient to determine compensation, the insurance company would only be required to pay according to the current worker's compensation fee schedule, even if the recipient should receive more.

•  Patients receiving benefits from the assigned claims facility would only be provided $250,000 in coverage

• Non-resident claims would be limited to $50,000

• Penalties related to attorney fees are limited:

o       Any of the legal work and services done by a lawyer after the insurer receives notice of the dispute are not recoverable. “Attorney fees may only be awarded… For services rendered in the 12-month period immediately preceding the date the insurer is notified of the dispute.” The bill would also limit certain evidence at trial pertaining to how the insurer should process the claim.

• The right to a jury trial would be taken away by this new bill. All questions dealing with "whether a charge is reasonable or whether a product, service, or accommodation is medically appropriate and medically necessary is a question of law to be decided by the court,” not a jury.

These Changes Will Not Benefit Anybody

Proponents of the bill are selling the idea that the bill will save consumers money by reducing their insurance costs. While it's true the bill requires the reduction of insurance rates by $150, it does not restrict insurers from increasing their rates as early as one year later, without limitation.

Consumers who are currently receiving no-fault benefits will be cut off. The new bill states that virtually all of the reductions in benefits and charges will be retroactive. The bill states, “Payments to providers for… products, services and accommodations are subject to the limits in this section…”

Protect Your Benefits: Contact Your Legislator

This is a terrible bill that would negatively impact many families and motorcyclists. Please email your legislator to let them know you oppose this new law.