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June 27, 2019
The Court of Appeals has now clarified that an assignment of benefits contained in a pre-treatment registration form executed by an insured before the medical provider provides any treatment is void under MCL 500.3143 as assignments of benefits payable in the future.
Bronson Health Care Group, Inc v Farm Bureau Mut Ins Co involved a claim by Bronson Health Care Group (“Bronson”) for payment of PIP benefits for medical services provided to five individuals insured by Farm Bureau. Before receiving treatment at Bronson, each of these individuals signed a “Registration Release Form” containing several provisions including an “Assignment of Rights” clause regarding insurance benefits. None of the registration release forms contained any information regarding the specific medical treatment that would be provided, the dates of the services, or the estimated costs of the services. Mr. Burgan, one of the five individuals, also signed an assignment of rights after being treated which provided the specified dates of service and the applicable charges.
Farm Bureau moved for summary disposition seeking dismissal of Bronson’s claim arguing, inter alia, that the assignments were void because one cannot assign benefits payable in the future. The trial court denied the motion without specifically addressing whether the assignments were void. Farm Bureau filed an interlocutory appeal which was granted by the Court of Appeals.
The Court of Appeals ultimately determined that the assignments of benefits in Bronson’s registration release forms executed by the insureds before Bronson provided services were void under MCL 500.3143 as assignments of benefits payable in the future. MCL 500.3143 provides that “an agreement for assignment of a right to benefits payable in the future is void”.
In reaching this decision, the Court of Appeals determined that no benefits were payable at the time the registration form was executed. In other words, the Court determined that none of the insureds’ benefits were past due or presently due when the assignments were executed. The Court recognized that under the No-Fault Act, specifically MCL 500.3142(1) and MCL 500.3110(4), benefits become payable when the allowable expense or other covered loss is incurred. The Court reasoned that in the no-fault insurance context where a contract contains no indication of the medical treatment to be provided, the insured does not become legally obligated to pay an “allowable expense” by signing the agreement. Instead, the insured incurs an “allowable expense” when hospital or medical service provider provides a service giving rise to a charge.
Under this framework, the Court found that the assignments contained in the pre-treatment registration forms were void because it assigned the right to PIP benefits for unknown services to be provided in the future in violation of MCL 500.3143.
Notwithstanding this ruling, the Court found that Bronson could pursue a claim for payment of services rendered to Mr. Burgan because he executed a valid post-treatment assignment to Bronson. In reaching this conclusion, the Court relied on Shah v State Farm Mut Auto Ins Co, 324 Mich App 182 (2018) to reject Farm Bureau’s argument that its policy’s anti-assignment clause prohibited the post-treatment assignment to Bronson.
Finally, the Court of Appeals found that Bronson could not assert claims against Farm Bureau as an authorized representative of the insureds under the terms of the registration release forms because it lacked real-party-in-interest status where no provision in the registration form could be construed as designating Bronson as the insureds’ agent for any purpose.
 Unpublished opinion per curiam of the Michigan Court of Appeals, decided June 20, 2019 (Docket No 341200), available at:
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