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IAM testifies before Michigan Senate committee on need to rein in medical provider overcharging

Insurance Alliance of Michigan Executive Director Tricia Kinley testified before the Michigan Senate Insurance and Banking Committee today on the need to pass real reforms to fix Michigan’s broken, outdated auto no-fault system, including reining in overcharging by medical providers.

“There is a consistent pattern where healthcare providers from across the state are demanding higher amounts from auto insurers than they are for Medicare or workers’ compensation carriers – for the same services,” Kinley told committee members. “The payments are anywhere from 13 percent higher to 334 percent higher, simply because an individual was injured in an auto accident.”

According to an investigative report by the Detroit Free Press, an MRI at a medical provider in Metro Detroit can cost as much as $5,300 for someone injured in a car accident. That same MRI is $500 under Medicare.

Rich Studley and Wendy Block from the Michigan Chamber of Commerce and Kurt Gallinger, vice president and general counsel of Amerisure, an IAM member company, also testified before the Senate Insurance and Banking Committee.

“Medical providers are not charging for the same service in the same area to all people,” Gallinger testified. “It varies depending on whether the claim is made under workers’ compensation insurance or auto no-fault insurance.”

Michigan drivers consistently pay the highest auto insurance premiums in the country. Wednesday’s hearing was the third consecutive hearing looking at ways to lower the cost of auto insurance for drivers across the state.

The first hearing highlighted a report compiled by the Citizens Research Council of Michigan, which delved into medical costs associated with Michigan’s auto no-fault system. The second hearing featured several speakers, including Detroit Mayor Mike Duggan, who called the state’s broken, outdated auto no-fault system “morally indefensible.”

“We applaud members of the Senate Insurance and Banking Committee for putting in the time and effort to explore ways to lower the cost of auto insurance in Michigan, which includes cracking down on fraud and abuse, reining in overcharging by medical providers and giving consumers a choice in the level of medical coverage they must purchase with their auto insurance policy,” Kinley said.

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