House OKs $10M fix to address effect of fee cuts in auto insurance law
Lansing – Michigan House passed a bill late Thursday that would create a $ 10 million fund to support medical providers who could prove they were due to a proposed 45% cut in fees for their services had a “systemic deficit”.
The July 1 fee cut described in the historic, flawless 2019 auto insurance reform has caused panic among post-acute medical providers and the victims of catastrophic car accidents they serve. Both parties have argued that the fee cut would put providers out of business and force victims to find alternative sources of supply.
To qualify for the $ 10 million fund, post-acute practitioners would have to open their books to the Department of Insurance and Financial Services to prove the need – forcing companies to lift the veil on pricing that opponents are not Transparent and a factor in Michigan’s high auto insurance costs.
Once the money in the fund is used up, the department is expected to submit a report to lawmakers examining whether there is a legitimate need to facilitate fee reduction for medical providers and possibly guide future changes to the Motor Insurance Act .
“This is the only solution I’ve seen that will actually help us see if there really is a problem,” said House spokesman Jason Wentworth, R-Farwell.
The bill, passed 95-13, is moving alongside the Senate, where Senate Majority Leader Mike Shirkey, R-Clarklake, has raised concerns about interfering too early in the implementation of insurance reform.
Governor Gretchen Whitmer, who took the reform into effect in 2019, said she would support a close resolution to address concerns among medical providers.
The flawless auto law of 2019 made several changes to the state’s flawless auto law to cover Michigan’s highest auto insurance costs. The bill included required cuts in the Michigan Catastrophic Claims Association’s rating, as well as new options for consumers with lower insurance benefits.
More controversial changes included limits on the number of hours of care that family members could be reimbursed for, as well as cuts in the fee schedule that governs how much auto insurance can reimburse medical providers for the care of injured accident victims.
The fee schedule is expected to drop on July 1 to 55% of what medical service providers received in January 2019 for services not comparable to Medicare. For services with a Medicare code, the fees would be capped at 200% of the Medicare rate.
Over the past few weeks, vendors and victims have urged the House and Senate to make changes to avoid the drastic cut, but other laws that would have amended the Auto Insurance Act to delay or lessen the decline have stalled.
The bill passed by the House of Representatives on Thursday would distribute the $ 10 million on a first-come, first-served basis after a thorough review by the department.
Medical care providers would need to demonstrate that their loss is not just a loss of profit, but a systemic deficit. You would also need to provide records of the total number of patients cared for, insurance billed for care, a list of auto insurance companies and other types of insurance billed for care in 2019, and evidence that reimbursement was refused by auto insurance carriers and has been confirmed by the department.
Health care providers would also have to demonstrate that their fees are below regional and market averages, that there have been “good faith” efforts to adapt the business model to the fee reduction, financial statements that show a systemic deficit, or “any other information considered” by the department required. “
Providers that were newly founded or newly founded after January 1, 2020 are not eligible to participate.
Under the law approved on Thursday, the Department of Insurance and Financial Services would have to review an application within 21 days and transfer payment within seven days of review.
eleblanc@detroitnews.com