LANSING, Mich. — The no-fault auto insurance reforms passed in Michigan in 2019 had an unintended side effect: They cut money for specialized rehabilitation services.
Now advocates and families are desperately working to get new legislation passed before the change takes effect.
Prior to 2019, Michigan required that auto insurance provide unlimited lifetime medical coverage for people seriously injured in accidents. That helped to support rehabilitation service providers across the state.
“In Michigan we have been so fortunate through the years to have the largest, broadest, deepest concentration of brain injury rehabilitation providers, the care here in Michigan is second to none. That’s been due primarily to no-fault and the robust rehabilitation community that exists,” said Tom Constand, president and CEO of the Brain Injury Association of Michigan.
It also made, signed Michigan's auto insurance rates the highest in the nation. The 2019 reforms were meant to address that.
But they included a fee schedule that will take effect July 1, 2021, that takes funding away from specialized rehabilitation services.
The new fee schedule would only cover rehab services that have been assigned codes by the U.S Centers for Medicare and Medicaid Services. In hospitals, those fees are generally covered by Medicare which means the biggest impact is on specifically designed rehabilitation programs, that often do not take place in hospitals.
The change would drastically alter the cost and accessibility of care for people who have suffered a catastrophic auto accident.
Jenna Bush's daughter Courtnie was involved in a serious car accident just last year and suffered major bodily and brain injuries.
The change "is going to diminish and really devastate her recovery and progress that she’s made and still has to go,” said Jenna Bush, of Onondaga. “It’s going to be a matter of not being able to find [providers] or with what the reduced fee schedule is going to pay they’re not going to be as qualified, they’re not going to give her the same level of care and therapy.”
Lane and Emily Bargeron are in a similar situation. The couple was T-boned by on the highway as they headed to visit family in 2012. Lane suffered a traumatic brain injury. Starting in his 20s, he began years of physical therapy and round-the-clock care.
The cost under the new fee schedule "would be astronomical for a lifetime of care, especially starting at the age of 21,” Emily said. “If the homecare agency had to shut down because of the fee schedule we would have to get family or friends or we would have to hire within our own budget which would eventually have an end it would probably lead to medical bankruptcy.”
They have two kids and another on the way, and the impact on the family would be “tremendous,” Lane said. “It would totally change our lives because we would not be able to function as a normal family.”
The new fee schedule would cap care facilities at a 55% maximum charge for services not covered by Medicare.
“Essentially that means that businesses need to have at least 45% net operating profit in order to survive,” Constand said.
Studies conducted for the Michigan Brain Injury Provider Council found that up to 5,000 providers in the state would lose their jobs.
Constand, whose own son survived a traumatic brain injury in 2010 says “It hit me how fortunate I was to be in Michigan where we had this wide array of rehabilitation facilities to select from. I didn’t need to leave my job, I didn’t have to upend my life and my family didn’t need to open their schedules to make sure that my son got the care that he did. He got it 20 minutes away.”
There is some pushback over the legislative fixes, HB 4486 and SB 314 that would prevent the new fee schedule from taking effect.
Opponents of the new legislation argue that the new fee schedule will help Michigan drivers save a significant amount of money on car insurance. Michigan drivers do spend more on car insurance specifically because of no-fault laws and other requirements like paying a fee to the Michigan Catastrophic Claim Association.
In response to the new fee schedule, additional auto insurance companies have indicated that they will start offering coverage to Michiganders which opponents of the new legislation say will lower costs even further.
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