In VHS of Michigan, Inc., doing business as Detroit Medical Center v. Farm Bureau Mutual Insurance Company of Michigan, No. 341176, 2018 WL 6185314 (Mich. Ct. App. Nov. 27, 2018), Plaintiff sought reimbursement directly from Farm Bureau for services rendered to the underlying claimant, Tiana Bailey, following her involvement in a motor vehicle accident. Plaintiff filed its complaint prior to the Michigan Supreme Court’s decision in Covenant Med Ctr, Inc. v. State Farm Mut Auto Ins Co, 500 Mich 191; 895 NW2d 490 (2017), which held that healthcare providers do not have an independent statutory cause of action against no-fault insurers for the recovery of personal protection injury benefits under MCL 500.3101 et. seq. Covenant did not, however, alter an insured’s ability to assign their rights to past or presently due medical expenses under the Michigan No-Fault Act. Accordingly, the Court noted the Plaintiff in this matter still maintained its right to recover from an insurer by obtaining a valid and enforceable assignment of rights from Ms. Bailey.
Rather than seek out and obtain an assignment of rights from the underlying claimant, however, VHS of Michigan, in response to Defendant’s Motion for Summary Disposition, sought to rely upon four forms that were executed by Ms. Bailey at or around the time she received treatment. Two of the forms relied upon by the Plaintiff were entitled, “Outpatient General Consent Form”, which in pertinent part, authorized direct payment of benefits to her doctors by any insurance carrier. The other two forms entitled, “DMC General Consent For Admission and Treatment”, assigned and authorized payments to be made directly to the hospital by the patient’s insurance or healthcare provider, for benefits otherwise payable to the patient.
In determining the validity and enforceability of Plaintiff’s claimed assignments, the Court of Appeals focused on whether the assignments clearly reflected the underlying claimant’s present intent to transfer to VHS her right to pursue past or presently due personal protection insurance benefits from Farm Bureau. Burkhardt v. Bailey, 260 Mich App 636, 654; 680 NW2d 453 (2004). The Court of Appeals found that no provisions contained in the general consent forms signed by the underlying claimant constituted a sufficient assignment for the purposes of establishing Plaintiff’s standing in the litigation. The Court held that while Michigan case law has not specifically articulated what elements are necessary to create an assignment, there must still be “a perfected transaction between the parties which is intended to vest in the assignee a present right in the thing assigned.” The Court held that while the provisions of the claimed assignments authorized direct payment of benefits contemplated by MCL 500.3112, they did not clearly manifest Ms. Bailey’s intent to assign VHS her right to pursue benefits by way of litigation.
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Sarah Nadeau, Editor of the Law Fax Publication, is a Shareholder in our Detroit Office. Sarah can be reached at 313.446.1530 or snadeau@garanlucow.com