October 28, 2025
In the recently published decision, West Michigan Home Care Services, Inc. v. Meemic Insurance Company, the Michigan Court of Appeals addresses which reimbursement cap applies to home-health and skilled-nursing care that are paid by Medicare using a prospective payment, rather than a fee-for-service, system. The question at issue was whether payment for these services would be made under MCL 500.3157 (2) (200% of Medicare rates for services related to the 2020 accident) or MCL 500.3157(7) (55% of the average Plaintiff charged for the treatment on January 1, 2019).
Plaintiff West Michigan Home Care Services Inc. (“WMHCS”) provided round-the-clock home-health and skilled-nursing services to Susan Horn, who was paralyzed in a motor vehicle accident that occurred on May 28, 2020. Prior to the July 2021 no-fault amendments, MEEMIC had paid $31/hour for home-health-aide care provided to Horn. After July 2021, relying on the new fee caps in MCL 500.3157, MEEMIC began to pay approximately $19/hour for the same home-health-aid care.
MEEMIC appealed the circuit court’s order that granted WMHCS’s motion for partial summary disposition, holding that the payment limitation in MCL 500.3157(2) applied to the home-health aide and skilled-nursing services provided to Horn following the 2020 mva.
MEEMIC argued that the circuit court erred in its holding and that reimbursement should be limited to MCL 500.3157(7)’s 55% of the 2019 rates as opposed to MCL 500.3157(2)’s 200% of the Medicare rate. MEEMIC’s argument hinged on the idea that Medicare does not pay for home-health-aide services using a “fee-for-service” system but rather a “prospective payment system”—which bundles payments together—meaning no specific “amount payable” exists under Medicare’s fee schedule. Therefore, MEEMIC argued, the MCL 500.3157(7) 55% of the 2019 rate should apply. The Court of Appeals disagreed.
Citing Central Home Health Care Servs, Inc v Progressive Mich Ins Co, the Court held that in applying MCL 500.3157, the key question is whether Medicare covers the service at all, not whether it pays under a fee-for-service or a prospective payment system. Because Medicare does in fact pay for home-health-care and skilled-nursing care services (Medicare has billing codes for these particular services and insurers use the codes in their Explanation of Benefits), there is an amount payable. Therefore, MCL 500.3157(2)’s 200% of the amount payable under Medicare applies for reimbursement of these services.
The Court left open whether MCL 500.3157(8) applies in limiting WMHCS’s reimbursement to its average charges on January 1, 2019. MEEMIC argued that, even if MCL 500.3157(2) does apply, the trial court committed reversible error by failing to consider whether MCL 500.3157(8) should be applied to Plaintiff’s claims. In addition to the reimbursement caps at the forefront of this case, MCL 500.3157(8) provides:
“For any change to an amount payable under Medicare as provided in subsection (2), (3), (5), or (6) that occurs after the effective date of the amendatory act that added this subsection, the change must be applied to the amount allowed for payment or reimbursement under that subsection. However, an amount allowed for payment or reimbursement under subsection (2), (3), (5), or (6) must not exceed the average amount charged by the physician, hospital, clinic, or other person for the treatment or training on January 1, 2019.”
The Court held that although MCL 500.3157(8) may be applicable in this case the question of what is considered a ‘reasonable’ rate remains a question for the trier of fact. Nothing in the circuit court’s order forecloses the application of subsection 8 and its applicability remains an open question that could be determined in later proceedings.
The Michigan Court of Appeals held that any distinction between fee-for-service payment model and Medicare’s prospective payment system is irrelevant. West Michigan Home Care Services, Inc. v. Meemic Insurance Company further clarifies post-reform reimbursement rules and confirms the limitations on insurers’ ability to apply the lower 55% cap when Medicare provides coverage.