September 22, 2025
The Michigan Court of Appeals has published a decision answering a question of law and statutory construction centered around MCL 500.3157 of the no-fault act, as amended in 2019. When applying the no-fault act’s definition of “Medicare”—MCL 500.3157(15)(f)—to the new Medicare-based statutory caps on allowable expense reimbursement in MCL 500.3157(2)-(6), are the “limitations” that are used in the Medicare system intended also to be used, as a general rule, in the no-fault system when discerning “the amount payable … under Medicare” (§§ 3157(2)-(6))? And if so, are the exceptions to that general rule limited to those Medicare limitations that are “unrelated to the rates in the [Medicare] fee schedule”? MCL 500.3157(15)(f) (emphasis added).
In Michael Angelo Favot v Memberselect Ins Co, et al, ___ Mich App ___ (COA Nos. 368733, 368734, 9/18/25), the Court of Appeals answered both those questions in the affirmative. In Favot, Plaintiff was injured in a motor vehicle accident and filed a lawsuit claiming his insurer, Memberselect, failed to fully reimburse his first-party PIP benefits. Memberselect filed two partial motions for summary disposition regarding some of the charges submitted by Plaintiff’s medical providers, arguing it had paid the maximum amounts allowed under the new no-fault fee schedule, MCL 500.3157. Specifically, Memberselect asserted it could apply certain limitations commonly used by Medicare to determine the “amount payable…under Medicare” payable to Plaintiff’s medical providers because those limitations were related to the rates in the Medicare fee schedule. The trial court denied those motions.
The Medicare limitations at issue were the “packaged-service” rule, the multiple procedure payment reduction (MPPR) rule, and billing modifiers such as the geographical adjustment utilized by Medicare. The Court of Appeals, citing Central Home Health Care Servs, Inc v Proressive Mich Ins Co, ___ Mich App ___ (2024), found that the amount payable by insurers is not determined by rates in the fee schedule alone, but also by applying limitations related to the rates in the fee schedule. The Court noted this interpretation was supported by the plain language of the statute, and applying that language found the limitations asserted by Memberselect are not “of the same kind, class, character, or nature” as the unrelated limitations listed in MCL 500.3157(15)(f).
Specifically, the Court found that the statutory examples of unrelated limitations consist of grounds for denying unreasonable expenses, avenues for provider- and hospital-wide reimbursements, hospital-wide reductions in Medicare payments, or nationwide cancellations in payments. They do not relate to the amount Medicare pays for a particular procedure under Medicare’s fee schedule. Unlike those examples, the “packaged-service” rule, the MPPR rule, and the billing modifiers applied by Memberselect are related to the rates and amount payable by Medicare. The Court reversed the trial court’s denial of Memberselect’s motions for partial summary disposition and remanded the matter back to the trial court for a determination of what Memberselect must pay.