Supreme Court nixes key component of bipartisan reforms that reined in medical overcharging, lowered costs
LANSING – The Insurance Alliance of Michigan released the following statement in response to a Michigan Supreme Court ruling today that struck down components of a common-sense medical fee schedule for those injured prior to the 2019 reforms – a key provision that was keeping medical costs and rampant overcharging in check and making auto insurance more affordable in Michigan.
“The fact is, bipartisan reforms have lowered costs for millions of drivers and saved Michiganders more than $5 billion, making today’s court ruling a huge setback for Michigan’s 7.2 million drivers, small businesses, and the state’s economy,” said Erin McDonough, executive director of the Insurance Alliance of Michigan. “A medical fee schedule for auto insurance, similar to private health insurance, Medicare and Medicaid has been a huge benefit to consumers because it reins in rampant overcharging by medical providers and brings fairness, common sense and transparency to the broken auto no-fault system. Today, the court let down consumers across Michigan and opened the floodgates for overcharging for medical procedures and higher rates. You can’t reasonably expect to save Michigan drivers money while obliterating a key cost-control measure like the fee schedule. What medical providers charge for services and prescribe for care, above and beyond what’s medically necessary, can be controlled and has proven to reduce the cost of auto insurance. While the court struck down the fee schedule for those injured prior to bipartisan reforms, fortunately, the decision preserves the fee schedule going forward after enactment and that will continue to provide relief to drivers saddled with some of the highest insurance costs in the nation. We urge the Michigan Legislature to protect that important cost control and consumer protection and stop efforts by those who profit off overcharging and pushing unnecessary medical procedures from taking us back to the old broken system with astronomical rates, rampant fraud, and widespread abuse and overcharging.”
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IAM is a government affairs and public information association that represents auto, home, and business insurance companies and related organizations operating in Michigan. Learn more about IAM and its members on Facebook, Twitter or at www.insurancealliancemichigan.org.
