LANSING, Mich. — It's been three weeks since the most recent portion of Michigan's no-fault auto reform law went into effect on July 2. Advocates have been saying for months changes within the bill would devastate the state's post-acute healthcare industry, and effectively cut off survivors of catastrophic auto crashes from care they need to survive.
The changes include a medical fee schedule change that enacts a 45 percent reduction in what insurance companies have to reimburse local care providers for any services they provide that are not already billable under our federal medicare law. Family members who provide care for their loved ones are also now capped at 56 hours a week.
“Before this reform went through, everything was pretty straightforward," said Attorney Brandon M. Hewitt, COO at Michigan Auto Law.
"People in auto accidents were covered for life at an unlimited amount, which meant that seriously, catastrophically injured people didn't have to worry about whether or not they would be taken care of.”
According to the Michigan Brain Injury Provider Council, there have already been at least 36 Michigan-based care providers that have had to either close their doors completely, or no longer accept patients receiving no-fault auto benefits.
Nearly 1,500 healthcare workers have already lost their jobs since the changes took effect.
A study by ROI Insight predicts that within a year of these changes, if no legislative fix is taken up, 5,000 healthcare workers will eventually lose their jobs and 6,000 patients will lose access to care.
The reform law is meant to lower Michigan's auto-insurance rates that have for years topped the list of most expensive states.
“If they don't have a diagnostic code that correlates with Medicare coverage, the rates are reduced by 45 percent," Hewitt explained.
"And any business out there, if you tell them that all of a sudden you are going to be receiving 45 percent less revenue, they’re going to have a hard time surviving.”
The state legislature has let at least four bills that would have provided a narrow fix to these fee schedule changes languish in committee. They did end up approving a $25,000,000 fund to theoretically help buoy local care providers the day before the changes went into effect.
But Hewitt says the fund isn't set up in a way that will provide real assistance to companies struggling to stay afloat.
"It's not enough to show that they're just not profitable; they have to show that the loss of profit has affected the quality of services they can provide. So, they have to go through this whole process to demonstrate these huge losses that they're having, not just to their company but to their patients."
The fund is being handled by the Michigan Department of Insurance and Financial Services. They have yet to open up the application process.
"Our position is that it's contrary to what Michigan law allows," Hewitt said Friday.
"So our expectation is that either this needs to get fixed by the legislature and Governor Whitmer, or it's going to have to get fixed through the court system.”
The Michigan state legislature is now on their summer recess, so it will be at least months before any sort of legislative fix is even possible.
“What we're going to see is more and more companies that are hanging on, not be able to hang on anymore," said Tom Judd, president of the Michigan Brain Injury Provider Council.
"We're going to see more families being uprooted; we're going to see more patients ending up in the hospital or getting removed from their homes that they've lived in for years at a level of dignity and... be moved to facilities, institutions, nursing homes. You know, it's just not fair.”