PLAINTIFF MAY NOT PURSUE BALANCE BILLS WHERE COORDINATED POLICY EXISTS

Fiona E. Heady

In a recent, unpublished decision, Lofton v State Farm and John Doe (Unpub COA No. 359410, 04/13/2023), the Court of Appeals analyzed the trial court’s grant of summary disposition due to coordination of benefits from a health policy through Blue Care Network (“BCN”).

Plaintiff was covered under a no-fault policy of insurance issued by State Farm that provided for coordinated coverage with Plaintiff’s BCN group health insurance plan. Plaintiff filed a Complaint seeking PIP benefits and UM benefits for injuries allegedly arising out of a June 25, 2019, hit-and-run motor vehicle accident.

Defendant filed a motion for partial summary disposition under MCR 2.116(C)(10) asserting no liability for payment of any benefits due to the coordinated policy with BCN which required (1) Plaintiff to treat with in-network providers or obtain approval to treat out-of-network, (2) Plaintiff to obtain referrals from primary care physician or pre-authorization for treatments, and (3) explicitly prohibited BCN providers from billing a patient for an unpaid balance. Defendant further argued that certain providers, Northland Radiology and Dr. Kevin Crawford, were either paid an agreed-upon contractual rate or were not paid because they treated Plaintiff without receipt of pre-authorization. The trial court ruled against Defendant in part, having dispensed with oral argument under MCR 2.119(E)(3), finding that the “[p]laintiff may pursue balance bills not paid by Blue Cross.”

On appeal, the Court addressed the balance bills from Northland Radiology and Dr. Crawford, finding that Plaintiff presented the trial court with numerous EOBs by these in-network providers which indicate that Plaintiff is not responsible for the cost of services provided and further indicate that the providers were reimbursed at their contractual rate. No evidence was presented by Plaintiff that he has or would become liable for these balances not paid by BCN. The Court reiterated that a payment made by a health insurer under a provider agreement is payment in full. Farm Bureau v BCBS, 314 Mich App 12, 21 (2016). The Court was also compelled by Plaintiff’s failure to present evidence that BCN’s payments were in violation of a payment agreement, noting it was Plaintiff’s responsibility to establish a genuine issue of material fact regarding Plaintiff’s own obligation to pay any balance. Quinto v Cross & Peters, 451 Mich 358; 362 (1996). Notably, the Court specifically denied reaching a holding as to the issue of Plaintiff’s liability for the unpaid services, instead only finding that Plaintiff failed to meet his burden establishing Defendant’s liability for the costs of these services.

Defendant’s motion had further argued that providers AutoRx and MBM failed to first seek payment from BCN. The Court on appeal agreed, noting that an insured with coordinated health and no-fault coverage “must first use healthcare insurance for services offered under the health insurance policy.” Farm Bureau, 314 Mich app at 22. “[A] plaintiff must make reasonable efforts to obtain payments that are available from the health insurer to establish that the benefits are not payable by the health insurer.” St John Macomb-Oakland Hosp., 318 Mich App at 264. Here, no evidence was presented that Plaintiff or MBM made an effort to file a claim with BCN prior to filing suit. After filing suit, MBM did make a claim with BCN and BCN subsequently responded to all claims with a request for further information. Plaintiff failed to address the AutoRx claim at all. Because of these facts, the Court of Appeals determined that Plaintiff failed to establish a genuine issue of material fact regarding whether he had made reasonable effort to obtain payment from BCN in order to establish that the benefits were not payable by BCN. The Court remanded the case for entry of an order granting the Defendant’s motion for summary disposition and granting Defendant the ability to tax its costs as the prevailing party.