Michigan Court of Appeals; Docket #355062; Unpublished
Judges Murray, Markey, and Riordan; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Coordination with HMO and PPO Coverages [§3109a]
In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s denial of Defendant State Farm Mutual Automobile Insurance Company’s (“State Farm”) motion for summary disposition, in which State Farm sought dismissal of Plaintiff Estate of Nicole Yvette Reid’s (“Plaintiff”) first-party action against it. Reid had a policy of no-fault insurance through State Farm, under which she coordinated her medical coverage with her health insurer, Blue Care Network (“BCN”). After Reid was injured in a car crash, she sought medical treatment from providers that were not in her health insurer’s network, so her providers requested payment for the treatment they rendered from State Farm. The Court of Appeals held that, based on MCL 500.3109a, the no-fault insurer of an individual with coordinated no-fault and health insurance coverage who chooses to receive treatment from a provider outside her health insurer’s network is not required to pay for that treatment unless similar treatments were not available from any provider within the health insurer’s network. In this case, Reid never alleged that similar services were not available from a provider within her health insurer’s network, and thus State Farm was not required to pay for her treatment.
Reid was catastrophically injured in a car crash in October 2018. At the time of the crash, she was covered under a no-fault insurance policy with State Farm, which she coordinated with her BCN health insurance policy. After the crash, Reid received treatment from Columbia Clinic and Capital Health Care, neither of which participated in BCN’s network, and as a result, BCN refused to pay for her treatment. Columbia and Capitol then submitted their claims to State Farm, but State Farm also refused to pay for Reid’s treatment, noting that Reid’s no-fault policy was coordinated with her BCN policy, and that if she chose to receive treatment outside BCN’s network without first establishing that similar services were not available within BCN’s network, State Farm would not be obligated to pay for the treatment. State Farm moved for summary disposition on this basis, but the trial court denied its motion.
The Court of Appeals held that the trial court erred in denying State Farm’s motion, relying on the Supreme Court’s decision in Tousignant v Allstate Ins Co, 444 Mich 301 (1993). The Court of Appeals observed that, under Tousignant, if an insured chooses to coordinate their no-fault and health insurance coverage, they cannot receive medical treatment from a provider outside the health insurer’s network and expect their treatment to be covered by their no-fault insurer. The Court of Appeals noted that an exception to that general rule exists if the medical services required by the insured are not available anywhere within the health insurer's network. In this case, however, Plaintiff failed to establish that the treatments Reid received from Columbia Clinic and Capital Health Care were not available from any providers within the BCN network.
“There remained dispute after the passage of MCL 500.3109a whether a no-fault insurer would be liable for healthcare services an injured party received that were not covered by his or her health insurance policy. Tousignant, 444 Mich at 307, concluded “that the legislative policy that led to the enactment of § 3109a requires an insured who chooses to coordinate no-fault and health coverages to obtain payment and services from the health insurer to the extent of the health coverage available from the health insurer.” (Emphasis added.) The extent of the health coverage available is limited by health maintenance organizations (HMOs), such as BCN. “[T]he HMO generally designates the physicians and facilities where services will be performed,” “limit[ing] choice of physicians or facilities.” Id. at 309. Ultimately, “[w]here . . . the no-fault insured’s employer chooses to provide health insurance, or the no-fault insured chooses to obtain health insurance, from an HMO, and the no-fault insured chooses to coordinate no-fault and health coverages, the no-fault insured has, in effect, thereby agreed to relinquish choice of physician and facility.” Id. at 310 (emphasis in original).
This is exactly what happened in this case. Reid was covered by a BCN HMO. The BCN certificate of coverage provides that the client ‘recognize[s] that, except for Emergency health services, only health care services provided by your Primary Care Physician or arranged and approved by BCN are covered.’ The policy further provides that ‘medical and hospital Services are covered only when’ they are ‘[p]rovided by a Participating Provider’ or ‘[p]reauthorized by BCN for select Services[.]’ It is undisputed that Capital and Columbia are not BCN participating providers. And neither Reid nor her personal representative ever asserted that the services received from Capital and Columbia were ‘Emergency health services’ or that BCN ‘arranged or approved’ of services through these out-of-network providers.
Tousignant provides another exception to the rule when the medical services required by a person injured in an automobile accident are not available under his or healthcare insurance. In Tousignant, 444 Mich at 304, the coordination provision in the injured party’s no-fault policy provided the no-fault insurer would not be liable for medical costs ‘to the extent such expense is ‘paid, payable or required to be provided’ under any’ health insurance. The State Farm policy in this case is worded slightly differently, releasing State Farm from any liability for amounts ‘paid or payable to’ the injured person under the health insurance policy. The Tousignant Court found the terms “payable” and “required to be provided” to be ‘functionally equivalent.’ Id. at 312 (quotation marks omitted). The different policy terminology is therefore irrelevant. In this case, as in Tousignant, 444 Mich at 312-313, to secure State Farm coverage of the Capital and Columbia medical expenses, Reid was required to establish that BCN ‘would not or could not provide the medical care she needed.’ Just as in Tousignant, neither Reid nor the personal representative of her estate ever ‘contended that necessary medical care was unavailable or of inadequate quality at [BCN] facilities.’ Id. at 305.”