COURT ADDRESSES COORDINATION OF BENEFITS AND BALANCE BILLING

Fiona E. Heady

In a recent, unpublished decision, Shah v Liberty Mutual Insurance Company (Unpub COA No. 356062, 01/27/22), the Court of Appeals analyzed coordination of benefits policies and balance billing.

At the time of the accident in 2018, the underlying claimant Ronald Stamps had HAP medical insurance and PIP coverage through Liberty Mutual. Stamps assigned his right to payment for healthcare services to Jawad Shah, doing business as Insight Institute. Shah billed claimant’s HAP insurance and HAP paid some bills at an adjusted rate, some bills partially, and denied some bills altogether, leaving approximately $32,000 in remaining amounts owed. Shah then sued Liberty Mutual seeking the unpaid amounts, and Liberty Mutual filed a Motion for Summary Disposition primarily on the grounds that the PIP policy was coordinated.

MCL 500.3109a permits persons to obtain no fault insurance at a reduced rate by coordinating that policy with their health insurance, thus making the health insurer primarily responsible for all medical expenses incurred as a result of an accident. “A no-fault insurer is not subject to liability for medical expenses that the insured’s health care insurer is required, under its contract, to pay for or provide.” Tousignant v Allstate Ins Co, 444 Mich 301, 303 (1993). “[W]hen payment for medical services is governed by a contract between a healthcare provider and a health insurer, the provider is bound by the terms of the agreement.” Farm Bureau Gen Ins Co v BCBS, 314 Mich App 12, 21 (2016). “Payment in keeping with the terms of the agreement constitutes payment in full, …the healthcare provider can[not] seek additional payment from a no-fault insurer for covered services.” Farm Bureau, 314 Mich App at 21. If the health insurer “would not or could not provide the medical care [the injured person] needed,” or if the available care was inadequate, then the benefit might be considered not “available” from the health insurer, and the PIP insurer might be liable for payment of those services. Tousignant, 444 Mich at 312-313. The inquiry, then, turns on the contract between the injured person and the health insurer. Id. at 312.

Although Shah argued that Stamps may not have known his PIP contract was coordinated, Shah provided no evidence the contract was not coordinated, or “of coercion, mistake, or fraud, [absent which insured] is presumed to know the nature of the document and to understand its contents, even if he or she has not read the agreement.” Clark v DaimlerChrysler Corp, 268 Mich App 138, 144-145; 706 NW2d 471 (2005). Furthermore, although there was no evidence that Stamps received a reduced premium, “[s]ection [500.3109a] does not require a health insurer to demonstrate a premium rate reduction to validate a coordination of benefits clause in the certificate of coverage.” Smith v Physicians Health Plan, 444 Mich 743, 756; 514 NW2d 150 (1994). Therefore, the Court concluded that the HAP policy was coordinated and HAP was primarily responsible for payment of Plaintiff’s bills. Moreover, Liberty was not liable for expenses HAP was required under its contract with Stamps to pay.

The Court of Appeals also found that Shah made reasonable efforts to obtain payment for its services by submitting bills for those services to HAP. The Court disagreed, however, that Shah could now turn to Liberty Mutual for the remaining payment for those services. Shah failed to provide any evidence as to what HAP was required to pay under its contract, Shah failed to provide a copy of the contract between HAP and Stamps, and Shaw did not even know whether it was one of HAP’s in-network providers or whether HAP would or could have provided the necessary care in-network. The Court determined that Shah could only seek reimbursement from Liberty Mutual once Shah established that HAP’s contract with Stamps did not require HAP to pay for Shah’s medical services. The Court noted that HAP rejected some payments, paid others in full, paid others in part, and that HAP’s remittance records balanced out to zero meaning that no further payments were owed to Shah. The Court affirmed the Circuit Court’s order granting Liberty Mutual’s Motion for Summary Disposition under MCR 2.116(C)(7) and (10).