Michigan Supreme Court Ruling Pits Patients Against Providers When Insurers Refuse to Pay

LANSING – The Michigan Supreme Court yesterday ruled in a landmark decision that will prevent medical providers from suing insurance companies on behalf of auto accident patients for payment of services rendered. The case, Covenant Medical Center v State Farm Mutual Auto Insurance, is expected to result in a windfall of profits for insurance companies and will greatly increase lawsuits in Michigan’s no-fault system while leaving patients on their own without a safety net.

“This decision is a nightmare for consumers. It puts patients squarely in the crosshairs of litigation, because health care providers will no longer be able to battle insurance companies on behalf of their patients. The responsibility will be placed solely on the patient to make sure their insurance company is reimbursing their doctor for the treatments received,” said CPAN President John Cornack. “This will create scenarios where doctors and hospitals will be forced to sue the very same patients they are caring for, and then patients will turn around and sue their insurance companies. Everyone will be lawyering up and litigation will go through the roof, which is exactly what no-fault insurance was designed to avoid.”

Cornack notes the decision will likely result in millions of dollars of medical expenses going unpaid because many patients will not have the knowhow or resources to fight for the services they need.

“It is well documented that medical expenses are the leading cause of bankruptcy, and this Supreme Court decision will only add to that problem,” said Cornack.

The Supreme Court decision may retroactively impact current auto accident cases, which could result in the dismissal of thousands of lawsuits across the state against auto insurance companies that have not paid medical expenses.

“This is yet another example of how insurance companies are using the courts to rewrite Michigan’s auto insurance laws,” said Cornack. “The thousands of patients who will lose their care due to this case will mean a multi-million dollar windfall for auto insurance companies while people suffer. CPAN is calling on lawmakers to immediately take action to correct the injustices of this case and protect patients across the state from the financial ruin that will surely result if it is allowed to stand.”

 

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