Insurance companies should pay a "reasonable rate," to providers of care for car crash survivors injured before the state's auto no fault law changed in 2019.
That's according to a bulletin issued by the Michigan Department of Insurance and Financial Services.
The bulletin came six days after the Michigan Supreme Court said it would let a ruling by the Court of Appeals in a case known as Andary take effect, while insurance companies appealed.
The Court of Appeals decision in Andary said it is unconstitutional to cut care providers' reimbursements for patients injured in car crashes before 2019, because they had pre-existing contracts with their insurance companies for care at reasonable rates.
The 2019 law cut nearly in half what insurance companies had been paying providers, like home care agencies and residential rehab facilities. Those cuts have been driving many providers out of business, and thousands of survivors have lost care as a result.
Steve Sinas is a personal injury attorney who teaches auto no fault law at Michigan State University College of Law. He said the Court of Appeals ruling was clear.
"Now DIFS has emphasized that is the law," he said. "So the question is, is the insurance industry going to respect the rule of law? Injured people should not have to wait to have their rights back. Their rights have been restored, and that's how insurance companies should handle their claims."
Erin McDonough is executive director of the Insurance Alliance of Michigan, an insurance industry trade group.
“We appreciate the Department for providing clarity to providers and insurers following the disappointing Court of Appeals decision in Andary," she said in a statement. "We’re hopeful the Michigan Supreme Court will overturn that decision, helping Michigan drivers save money as the bipartisan reforms intended.”
