August 29, 2022
In the May 10, 2022, issue of The Garan Report, we advised that the Court of Appeals was set to hold oral argument in Andary v USAA Casualty Insurance Company, which involved the issue of whether the allowable expense limitations set forth in the amended MCL 500.3157 can be applied by no-fault insurers to persons who were injured before § 3157 was amended on June 11, 2019.
As we explained in the May 10, 2022, issue of The Garan Report, the Legislature amended § 3157 to do two things.
First, in § 3157(10) the Legislature limited to 56 the number of hours per week of attendant care that a no-fault insurer is required to pay for if the attendant care is rendered in the injured person’s home by relatives or certain other persons.
Second, in § 3157 (2) & (7) the Legislature limited the amounts that care providers may charge for treatment, such as attendant care, rendered to motor vehicle accident victims. For treatment for which Medicare provides a payable amount for like treatment, § 3157(2) limits the care provider to charging only a specified percentage above what the provider would be paid by Medicare. For treatment for which Medicare does not provide a payable amount for like treatment, § 3157(7) limits the care provider to charging only a specified percentage of the average amount that the provider charged for such treatment on or before January 1, 2019.
As we also noted in the May 10, 2022, issue of The Garan Report, when it amended §3157 on June 11, 2019, the Legislature expressly stated in §3157(14) that the above-referenced limitations “apply to treatment . . . rendered after July 1, 2021.” Moreover, simultaneous with its amendment of §3157, the Legislature amended the essential insurance act, MCL 500.2101 et seq., to add MCL 500.2111f(8). Therein, the Legislature mandated that no-fault insurers reduce the rates that they charge for no-fault policies. And, significantly, the Legislature expressly stated therein why no-fault insurers were being mandated to provide such rate reductions. As is pertinent to the present issue, the Legislature explained in §2111f(8) that such rate reductions were being mandated, in part, because of “the application of [the fee and hour limitations] of [§]3157(2) to (12) to treatment . . . rendered to individuals who suffered accidental bodily injury from motor vehicle accidents that occurred before July 2, 2021.”
Unfortunately, on August 25, 2022, Court of Appeals Judges Douglas Shapiro and Sima Patel issued a published (and therefore binding) opinion holding that the fee and hour limitations set forth in the amended §3157 cannot be applied by no-fault insurers to persons injured in motor vehicle accidents before June 11, 2019. More specifically, in Andary, Judges Shapiro and Patel opined that applying the amended §3157 to persons injured before June 11, 2019, would constitute “retroactive” application of the amendment that was not intended by the Legislature and, moreover, would violate the Contract Clause of the Michigan Constitution.
Significantly, and without providing any explanation that would withstand even facial scrutiny – as aptly pointed out in a dissent by Judge Jane Markey – Judges Shapiro and Patel announced this holding despite the Legislature’s clear and unambiguous statements in §3157(14) and §2111f(8) that the fee and hour limitations are to be applied to all treatment rendered on or after July 2, 2021, even if the motor vehicle accident occurred before July 2, 2021, and despite the fact that MCL 500.3110(4) makes clear that applying the amendments to persons injured before June 11, 2019, does not constitute “retroactive” application of the amendments because “[p]ersonal protection insurance benefits payable for accidental bodily injury accrue not when the injury occurs but as the allowable expense . . . is incurred.”
It is a foregone conclusion that Judge Shapiro and Patel’s majority decision will prompt the involved insurers to seek leave to appeal to the Michigan Supreme Court. Whether our current Supreme Court will grant that application, however, of course remains to be seen. And even if leave to appeal is granted, it also remains to be seen whether our current Supreme Court will follow the plain language of the amended §3157(14), §2111f(8), and §3110(4), or do as Judges Shapiro and Patel did and cast aside the Legislature’s clearly-stated intention through judicial legerdemain.
Unfortunately, until the Michigan Supreme Court answers those questions, Judge Shapiro and Patel’s published decision in Andary remains effective, and binding upon no-fault insurers. This means that no-fault insurers must begin (or continue) paying persons injured before June 11, 2019, as though the fee and hour limitations do not apply, despite having been ordered by the Legislature to reduce the rates they charge because the fee and hour limitations are supposed to apply, which of course is completely anathema to the stated intention of the Legislature. Hopefully the Michigan Supreme Court will eventually fix the Court of Appeals’ majority’s mistake, but again that remains to be seen.