November 17, 2025
In a decision clarifying the reach of Michigan’s no-fault “one-year-back rule,” the Michigan Court of Appeals, on remand from the Supreme Court, reaffirmed that the 2019 amendment to MCL 500.3145(3) which created a tolling provision for un-denied claims, does not apply retroactively. The Court’s opinion in Encompass Healthcare, PLLC v. Citizens Insurance Company underscores the strict enforcement of the one-year-back rule for pre-amendment claims and confirms that providers must act promptly to preserve reimbursement rights.
In December 2017, Ronald Mannor was injured in a motor vehicle accident. Encompass Healthcare, PLLC (“Encompass”) provided treatment from June 2018 to October 2018. Encompass billed Citizens Insurance Company (“Citizens”) $921,828.44 for services rendered, but received only $177,655.25. In May 2019, Mannor assigned his rights to benefits and recovery to Encompass. Six months later, on November 4, 2019, Encompass filed a lawsuit in the Oakland County Circuit Court, alleging that Citizens had failed to pay all no-fault benefits owed under the policy. Citizens moved for summary disposition arguing that Encompass’s claims were barred by the one-year-back rule in MCL 500.3145(2).
Encompass conceded the timing but relied on the 2019 amendment to MCL 500.3145(3), which added a tolling provision. Encompass asserted that, because Citizens never formally denied its reimbursement claims, the one-year statute of limitations period remained tolled, and its lawsuit was therefore timely. The trial court partially granted Citizen’s motion. It held that, under the one-year-back rule, any expenses incurred before November 4, 2018, were not recoverable. The court also found that Citizens’ “Explanations of Review” (“EORs”) constituted formal denials as contemplated by MCL 500.3145(2), meaning the tolling provision did not apply. Because all of Encompass’s expenses predated that date, the ruling effectively ended the case.
In 2022, the Michigan Court of Appeals reversed, holding that the EORs did not constitute formal denials and that tolling under the amended statute remained in effect until Encompass filed its complaint. Therefore, the claims were not time-barred, and summary disposition should have been denied. However, on the same day, but in a separate case later published in February 2023, a different panel of the Court of Appeals reached the opposite conclusion in Spine Specialists of Mich, PC v MemberSelect Ins Co, 345 Mich App 405; 5 NW3d 108 (2022). That panel held that the 2019 amendment to MCL 500.3145 could not be applied retroactively because the Legislature had not included such language and because medical expense claims accrue when treatment is rendered. Consequently, the amendment’s tolling provision did not affect claims for treatment provided before June 11, 2019, its effective date.
The Michigan Supreme Court later affirmed the Spine Specialists decision, emphasizing that the new tolling provision “carries heightened obligations” that could not be fairly imposed on insurers for claims arising before the amendment. The Court held that the pre-2019 version of MCL 500.3145 controls all claims accruing before June 11, 2019, and that the amendment does not apply retroactively. The Supreme Court in the present case, after oral argument and in lieu of issuing an opinion, vacated the Court of Appeals’ opinion and remanded for reconsideration in light of its holding in Spine Specialists.
On remand Encompass argued that Citizens had waived any challenge to the retroactive application of the amended statute because the issue was not raised in the trial court or the initial appeal. The Court of Appeals rejected this argument, noting the “raise or waive” rule could not be used to avoid the Michigan Supreme Court decision in Spine Specialists. The Court noted that the parties and the trial court had all proceeded under the assumption that the amended version of the statute applied.
Applying Spine Specialists, the Court held that the pre-amendment version of MCL 500.3145 governs all claims for medical treatment rendered before June 11, 2019. Because Encompass’ services were provided between June 2018 and October 2018, the amended statute’s tolling provision was inapplicable. The Court further explained that the one-year-back rule strictly limits recovery to expenses incurred within one year before the filing of the complaint, regardless of whether the insurer issued a formal denial. As a result, Encompass’s claims were time-barred in their entirety, as all treatment pre-dated November 4, 2018, one year before the filing date.
Accordingly, the Michigan Court of Appeals vacated its prior opinion and remanded the matter to the trial court for proceedings consistent with the Michigan Supreme Court’s decision in Spine Specialists.