Eliminate the Oppressive Michigan No-Fault Fee Schedule

Eliminate the Oppressive Michigan No-Fault Fee Schedule

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Pratheep Sevanthinathan started this petition to Michigan State Senate and

In May of 2019, the Michigan legislature passed amendments to its No-Fault Insurance Act that put in place a highly detrimental fee schedule for all medical providers.  The fee schedule limits No-Fault insurance payments for medical services for car accident victims to 200% of the Medicare rate.  The fee schedule was adopted after lobbying by the insurance industry and over the pleas and objections of physicians and medical providers. 

The No-Fault Fee schedule will cut reimbursement to doctors and other medical providers by close to 70% on average.  The legislature did not take into account the immense toll the fee schedule would take on the medical community and the micro economies supported by medicine.  The legislature also did not take into account the fact that, in order to get paid by a No-Fault insurer, a medical provider must often wait several months or even years and has to hire an entire billing team to prove that the services were related to a motor vehicle accident.   For Medicare patients, payment is received 30-days after billing with little issue.

The fee schedule is set to take effect in July of 2021.  Medical practices had already began layoffs in anticipation of the massive losses that are expected.  The financial strain of the COVID-19 pandemic has accelerated and compounded these losses.  Rehabilitative medical doctors and medical providers are bleeding quickly and will go out of business soon if the fee schedule stands.

The result of the fee schedule going into effect in July of 2021 would be a massive loss in quality of healthcare (especially pain management and rehabilitation), and a significant economic damage to areas that rely on medical practices for employment.  This is the absolute worst time - in the midst of a pandemic and economic downturn - to allow the medical practices to close.  This is the absolute worst time to "test" a new system that only benefits the insurance companies.

It should be noted that the May 2019 No-Fault amendments also enacted policy caps.  That means the insurance companies are now limited as to what they have to pay for any injured claimant.  The fee schedules are redundant and an overreach by the insurance lobby. 

The legislature needs to answer the following in view of this:  Why is the fee schedule even necessary if there are policy caps?  Why are you OK with sinking our micro economies?  Why are you OK with putting thousands of people out of jobs during a time of record unemployment?  Why are you willing to allow a drop in the quality of healthcare during a time where the healthcare industry is already strained?  

In light of the above, we urge the legislators of the great State of Michigan to repeal the oppressive fee schedule provision of the No-Fault Act contained in MCL 500.3157.  

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