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Volume XXIV, No. 13, August 21, 2012     

From the Law Offices of Garan Lucow Miller, P.C.

From the Co-Editors

James L. Borin & Simeon R. Orlowski

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SUPREME COURT DISCUSSES ATTENDANT CARE AND PROOFS NECESSARY TO DOCUMENT CLAIM

 

CONTRIBUTOR – C. DAVID MILLER

The Michigan Supreme Court in Douglas v Allstate Insurance Company, ___ Mich ___, 2012 (7/30/2012), in a 4 to 3 decision, held that for a PIP claimant to recover allowable expenses under MCL 500.3107(1)(a), the claimant must prove “(1) the expense must be for an injured person’s care, recovery or rehabilitation, (2) the expense must be reasonably necessary, (3) the expense must be incurred, and (4) the charge must be reasonable.”  (Affirming Griffith v State Farm, 472 Mich 521 (2005).  The Court then applied these requirements to the facts of the case.

James Douglas was injured in an automobile/bicycle accident in 1996, suffering a severe closed head injury.  Mr. Douglas tried a number of jobs, but was unable to hold on to a job.  He attempted to commit suicide on two separate occasions.  Mr. Douglas’ psychiatrist determined that Mr. Douglas suffered from short term memory problems and impulsivity as a result of the closed head injury.  It was recommended that he be supervised to make sure that he did not cause any harm to himself.  As a result, Catherine Douglas provided “babysitting,” “watching James” services to her husband, along with various tasks such as organizing her family’s day-to-day life, cooking meals, undertaking daily chores, maintaining the family house and yard, ordering and monitoring Plaintiff’s medications, communicating with health care providers and Social Security Administration officials, and ensuring Plaintiff’s safety.  She claimed to perform those services beginning November, 2004.  However, she did not prepare or fill out any attendant care forms for submission until June, 2007.  She did not contemporaneously itemize the amount of time she spent on any particular item, but rather reconstructed what had occurred over the prior several years.

Justice Young stated that allowable expenses cannot be for “ordinary and necessary services” because ordinary and necessary services are not “for an injured person’s care, recovery or rehabilitation.”  Replacement services are the prototypical services that every Michigan household must undertake, such as the preparation of family meals, yard work, household chores, car maintenance, etc.  Those activities are not for the care of the injured person.  Activities such as traveling to and communicating with medical providers, managing medications and providing on-call supervision, even while pursuing other tasks, is providing care.  (The Court affirmed that on-call supervision is care as had been previously determined regarding attendant care claims under the Workers’ Compensation statute.)  To qualify for attendant care, the activity must actually be for the care of the individual which would have never been required but for the accident.

Reasonably necessary expenses must be assessed using an objective standard.  Typically, such is evidenced by a prescription from a medical provider, evidenced in the record or by way of testimony from a medical provider.  The prescription for Mr. Douglas for attendant care was not written until November 7, 2006.  However, the treating physician and the claim representative both testified that Mr. Douglas would have required 24 hour supervision even prior to the prescription.  Accordingly, the supervision provided by Mrs. Douglas was reasonably necessary.

The Court’s Opinion notes that MCL 500.3107(1)(a) makes no distinction between family provided care and that provided by commercial providers.  Commercial providers typically provide a formal bill, invoice or contract for service, which is submitted to the No-Fault insurer.  The submission of such a bill is the presentation of proof of the charges in order to establish that the insured is entitled to PIP benefits and allows the insurer to determine whether they are compensable.  The same should be true of family provided care, because the statute makes no difference between a commercial provider and family provided care.  Therefore, there is an implied requirement that the family provided care must be evidenced by some form of submission, be it a log form, etc.  This would then show an expectation by the caregiver of compensation for the services rendered.  “Indeed, the best  way of proving that a care giver actually ‘expected compensation for (her) services’ at the time the services were rendered is for the caregiver to document incurred charges contemporaneously with providing them – whether in a formal bill or in another memorialized statement that logs with specificity the nature and amount of services rendered – and submit that documentation to the insurer within a reasonable amount of time after the services were rendered.”  Failing to submit such charges within a reasonable period of time can run the risk that the one year back rule will limit any claim for entitlement to benefits.

The Supreme Court also provided the following guidance regarding the handling of continuing attendant care claims:

  • Moreover, once a claimant seeks payment from the insurer for providing ongoing services, the insurer can request regular statements logging the nature and amount of those services to ensure that the claimed services are compensable.

The Court stated that constructing three years of an attendant care log in one day lacks credibility of the individual claim that they were expecting compensation for providing the care all along.  The case had to be remanded to the trial court to determine whether or not Mrs. Douglas expected compensation or reimbursement at the time she provided the actual service.  The act of completing a three year log in one day is merely evidence for the trier-of-fact to consider. It is not legally dispositive on the issue of whether the individual expected compensation as they were providing the care.  The difficult issue with the Court’s Opinion is that the case was initially tried not to a jury, but to a judge.  How this will be addressed with a jury instruction remains to be seen.

Secondly, in reconstructing a three year log in one day, was there sufficient evidence that Mrs. Douglas actually provided the care written down in the log?  Again, this is an evidentiary issue and not a dispositive one by law.

The last item is the charge of $40.00 per hour by Mrs. Douglas.  The Supreme Court’s Opinion was not a wholesale acceptance of Judge Zahra’s Opinion in Bonkowski v Allstate  Insurance Company, 281 Mich App 154 (2008), however, the Court did agree that the fact finder’s focus must be on an individual’s compensation as opposed to an agency’s compensation.  (The individual’s compensation can also include the value of benefits that might be afforded to an individual working in an agency.)  Thus, rates found on the United States Bureau of Labor Statistics and Michigan Labor websites showing what the pay levels are for certain services provided for individual pay is more reflective of the value of the family provided care than the rate an agency charges to an insurance agency to provide a care provider.  Trial counsel should, based upon the Douglas v Allstate Insurance Company case, always file a motion in limine to preclude any mention of agency rates.

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                                  TROY BREAKFAST SEMINAR | August 30, 2012

If you have signed up for the seminar and are no longer available to attend, please advise Eileen at  ecarty@garanlucow.com, so that we may accommodate those on the waiting list.

Thank you.

 

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      TROY BREAKFAST SEMINAR AGENDA

August 30, 2012

Troy Marriott

8:00 – 9:00 Registration and Complimentary Continental Breakfast

9:00 – 9:05 James Borin – Greetings and Introductory Remarks

9:05 – 9:20 Robert Goldenbogen – ERISA Issues

9:20 – 9:40 Sean Fosmire – Medicare Advantage – Is it a coordinatible benefit?

9:40 – 10:30 James Borin – No Fault Update

1. Spectrum v Farm Bureau – Has the Supreme Court inadvertently extended the “unlawful taking” exclusion?

2. The motorcycle helmet law – Is there an argument for exclusion of PIP?

3. Priority Disputes – Must an insurer pay out of the order of priority?

10:30 – 10:45 Break

10:45 – 11:15 Daniel Saylor – Attendant care claims post Douglas v Allstate.

11:15 – 11:45 Sharon Filas, CPA – Attacking the fictitious attendant care agency.

11:45 – 12:15 Wayne J. Miller – Facilitators perspective on provider claims.

12:15 – 12:30 Simeon Orlowski – Mini Tort Statute

 

12:30 – 1:30 Q&A