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Long-awaited auto no-fault reform legislation now officially state law

Historic no-fault reform legislation, Senate Bill 1 and House Bill 4397, were formally filed with the Secretary of State and are now Public Act 21 and Public Act 22 of 2019.

The new law, which will be phased in over the next two years, will give consumers a choice in the level of medical coverage they carry with their car insurance for the first time since no-fault became law more than 40 years ago. The new law will also rein-in overcharging by big hospitals and medical providers.

Hospital overcharging was part of a recent report by the Detroit Free Press, which proved big hospitals and medical providers have balanced their books on the backs of hard-working Michiganders by dramatically overcharging for medical procedures to treat people injured in car accidents. The report, which focused on a new RAND study, found Michigan has the lowest cost of medical care when it’s covered by private health insurance as opposed to a person’s auto insurance.

“It’s unfortunate big hospitals and medical providers have been overcharging consumers for decades, and we’re glad this will be reined-in under the state’s new auto no-fault law,” said Tricia Kinley, executive director of the Insurance Alliance of Michigan. “We urge the Legislature to continue building on the long-overdue reforms in the new law to end this overcharging even sooner.”

Under Michigan’s revised auto no-fault law, a fee schedule to stop big hospitals and medical providers from overcharging for the cost of care won’t take effect until July of 2021, allowing them an additional year to charge thousands of dollars – if not hundreds of thousands of dollars – more for the exact same medical procedures under Michigan’s broken, outdated auto no-fault law.

Here's an excerpt from the article:

“Some operators of clinics that specialize in treating catastrophically injured crash victims have complained that the fee schedule’s rates are too low and will force clinics to close, stranding patients and eliminating health care jobs,” the article states. “The RAND study shows that many hospitals that presumably treat car crash victims are surviving with lower payments from private health insurance — the 156% average rate — than what they would get under the forthcoming no-fault fee schedule.”

The fee schedule will pay between 190% to 250% of Medicare rates, with higher reimbursement rates for other providers.

Read the article.

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