Bills Would Fix a Range of Problems Created By the Auto Reform Package Signed Into Law in 2019

For information on how these bills could directly affect chiropractors who provide care for auto no-fault patients, see below!

On Tuesday, September 26, 2023, Michigan state Senator Mary Cavanagh (D-Redford Twp.) and state Senator Sarah Anthony (D-Lansing) introduced Senate Bills 530 and 531, bipartisan legislation to improve access to care for Michigan drivers severely injured in auto accidents. The bills have been assigned to the Senate Committee on Finance, Insurance, and Consumer Protection, which Sen. Cavanagh chairs.

In 2019, the Michigan Legislature overhauled the first-party personal injury protection (PIP) portion of the no-fault auto insurance system, including creating provider fee schedules and attendant care limitations.

“Several years after major reforms to Michigan’s auto insurance system, we’re able to evaluate some of the outcomes, including unintended consequences,” said Senator Cavanagh. “These bills address the urgent issue of access to care, ensuring survivors of auto accidents can continue receiving the specialized care they need and restoring the promise to every Michigan driver that they’ll have access to appropriate care if they’re ever in an accident.”

“This bill package supports auto accident survivors and re-establishes our commitment to Michigan drivers that they will have access to high-quality, affordable care if they are in an accident,” said Senator Anthony. “For years, people severely injured and permanently disabled by accidents have been priced out of the care that their lives depend on. These bills will support accident survivors, their families, and their caregivers by restructuring our Medicare reimbursement schedule and increasing in-home care to ensure they receive access to the support they need.”

How Could These Bills Affect Chiropractors?

Under current law, there is a cap of 190% on auto no-fault fees for services that are part of the Medicare Physician Fee Schedule. Senate Bill 530 will raise that cap to 250% of the Medicare fee.

SB 530 also has language that makes it clear that the 250% limit applies to all services on the Medicare fee schedule, regardless of Medicare’s payment policies. In other words, chiropractors are not limited by the fact that Medicare only pays the spinal CMT codes (98940-98942).

The MAC will monitor this legislation as it moves through the Michigan Legislature and will provide updates as appropriate.

CPAN Response to the Bills

Upon introduction of the bills, CPAN, the statewide consumer advocacy group that has long fought to protect victims of catastrophic auto accidents, called on the Michigan Legislature to quickly pass the bills. The MAC is a founding and Executive Committee member of CPAN.

“When you’re in a life-changing auto accident, you and your family go to hell and back,” said CPAN President Tim Hoste. “Those same victims have gone through hell a second time as they have tried to contend with the havoc raised by the state’s auto reform. The Legislature can end their nightmares now, by rapidly getting these bills passed and sent on to the governor’s desk. Sitting on these bills is only an option for those who disregard the lives of 17,000 of our state’s most vulnerable.”

SBs 530 and 531 provide narrow fixes to the two most harmful elements of the 2019 auto insurance reforms by:

• Replacing the nearly 50% cut in catastrophic care with a reasonable and sustainable fee schedule, and
• Removing the arbitrary 56-hour per-week cap on care provided by family members.

The bills would not impact other elements of the 2019 “reform,” including the option to select Personal Injury Protection (PIP) levels, new utilization review rules [separate legislation – House Bill 4884, introduced by state Representative Julie Rogers (D-Kalamazoo), Chair of the Michigan House Health Policy Committee and a physical therapist by trade – has been introduced to deal with this issue], and the introduction of a fraud authority unit.

A study from the nonprofit public health institute MPHI found that as of April 2022, the cut in reimbursements for catastrophic care—including long-term rehabilitation services such as residential rehabilitation, in-home nursing and nursing aides, case management, and more—had caused:

• Nearly 7,000 patients to be discharged from care;
• The loss of more than 4,000 health care jobs, and;
• The closure of more than 30 businesses.

“If the Legislature fails to act with speed on this matter, it can mean only one thing: That lawmakers have not, and are not, listening to the pleas of their constituents to right this injustice,” said Kris Nicholoff, CEO and executive director of the Michigan Osteopathic Association and a member of the CPAN board of directors. “Let’s end this suffering now—not tomorrow, not the day after—but today.”

When the law was passed in 2019, the auto insurance lobby and its supporters claimed that it would reduce Michigan’s highest-in-the-country auto insurance premiums. However, the Mid-Year Auto Trends Report by Insurify found that Michigan still has the highest premiums in the country. Even worse, Michigan is the worst state in the country for penalizing drivers based on their credit information, a discriminatory practice that disproportionally impacts low-income consumers and people of color. The Consumer Federation of America found that safe drivers in Michigan with poor credit pay a whopping 263% more than safe drivers with excellent credit. 

“On every front, it’s plainly obvious that the new auto insurance law has failed to meet its intent,” Hoste said. “Only the well-heeled auto insurance companies—which have raked in record profits since the law went into effect—stand in opposition to a fix that would protect crash survivors and consumers alike. The Legislature needs to stand up to their greed and take action.”

Dr. Michael Andary, a physician with 35 years of experience working with survivors of catastrophic car crashes, said that the new law has made it impossible for his patients to get the care they need to thrive and survive.

“Those in the medical and post-acute care fields have the expertise, the technology, and the capability to provide the type of quality care that makes a difference in how extensively someone with serious injuries can rebound toward health and normalcy,” said Dr. Andary. “What these auto reform changes—pushed so aggressively by powerful auto insurance lobbyists—have done is block needed care. The changes have caused unnecessary suffering and death. They have placed a ceiling on how far many patients could go in their post-acute care trajectory. Let’s remove these barriers—let’s get back to allowing doctors and clinicians to do their jobs.”

Sources:

CPAN Press Release, “CPAN Urges Lawmakers to Quickly Take Up and Pass Package Fixing No-Fault Auto Insurance Flaws,” September 26, 2023

State Senator Mary Cavanagh Press Release, “Sens. Cavanagh, Anthony Introduce Long-Awaited Auto Insurance Reforms to Better Support Auto Accident Victims,” September 26, 2023