NAII Files Brief in Michigan Coordination of Benefits Provision Case

The National Association of Independent Insurers announced that it has filed an amicus brief with the Michigan Supreme Court in the case of Sprague V. Farmers “to clarify the cost savings function of the state’s coordination of benefits provision.”

“Michigan’s personal injury protection (PIP) insurance laws allow consumers to choose to coordinate their health or accident insurance with their auto insurance policy at a reduced premium,” stated NAII counsel Laura Kotelman. “The NAII asked the court to clarify if the coordinated benefits clause in an insurance contract relieves a no-fault insurer from liability when those services are not offered by the health care provider and if the policyholder fails to exhaust any available medical treatments offered by the same health care provider.”

The NAII bulletin explained that the original case involved the plaintiff, Kate Sprague, who at the time of her accident had a coordinated benefits plan through an HMO and also had no-fault automobile insurance with the defendant Farmers Insurance Exchange.

“Sprague began treatment with a chiropractor and submitted the bills to her HMO,” the NAII continued. “The HMO declined coverage on the basis that no referral existed and because chiropractic services were not covered. Sprague then submitted the chiropractor bills to Farmers Insurance Exchange, which also denied coverage, on the basis that she had not made a reasonable effort to obtain medical services from her HMO.” The trial court ruled that Farmers was obligated pay the expenses.

“NAII asserts the analysis used by the lower court is flawed because it focuses on the particular treatment or expense incurred by the plaintiff,” Kotelman indicated. “The court should have focused on the care that was available under the primary health plan, and in light of the covered care, was there any basis for Sprague to seek treatment from an alternative source at the no-fault carrier’s expense.”

“The NAII’s amicus brief seeks to impress upon the Court the importance and impact of the legal issue presented in Sprague v. Farmers. NAII urges the Court to maintain and even strengthen the duty of a policyholder to utilize treatment that is available under his or her other health and accident coverage when coordinated no-fault coverage is selected by the insured,” Kotelman concluded.

Topics Agribusiness Michigan