Articles & Publications 03.26.24

Deciphering Reimbursement: Insights from the Central Home Health Care Servs Inc v. Progressive Mich Ins Co Decision

Introduction

The Michigan Court of Appeals has concluded that for purposes of MCL 500.3157, providers of in-home healthcare services are not subject to reimbursement based on their charge description master or other calculations other than the fee schedule, if Medicare covered the treatment or service at issue. Further, in circumstances where Medicare covers an in-home healthcare service, the limitations cap provided by MCL 500.3157(2) apply. Stated differently, a provider can only seek reimbursement for services based on its charge description master in effect on January 1, 2019 or average amount it charged for the treatment on January 1, 2019 only if there was no Medicare coverage for the treatment at issue.

The Central Home Health Care Servs Inc v Progressive Mich Ins Co Decision

In Central Home Health Care Servs Inc v Progressive Mich Ins Co, ___ Mich App ___; ___ NW2d ___ (Docket No. 364653), the plaintiff filed suit seeking payment for in-home healthcare services it provided to the defendant’s insured due to injuries suffered in an automobile accident. The plaintiff claimed a total outstanding balance in excess of $142,000. The defendant subsequently moved for partial summary disposition on the basis that MCL 500.3157(2)(a) precluded the plaintiff from recouping the full amount arguing that the statute limited the plaintiff’s damages to 200% of what Medicare would have paid for the services. The defendant also provided expert opinion indicating that the total amount representing 200% of what Medicare would have paid for all dates of service at issue was $10,216.52. The plaintiff countered the motion primarily arguing that MCL 500.3157(2)(a) did not apply because there was no "fee schedule" under Medicare for in-home healthcare services and Medicare, for purposes of the no-fault act, did not provide an amount payable for the services. As such, the plaintiff argued that its charges were reimbursable under MCL 500.3157(7)(a)(i) (55% of its rates identified on its charge description master that was in effect on January 1, 2019). The plaintiff in addition provided an affidavit by its expert in an attempt to rebut the defense expert’s methodology for calculating the amount Medicare would have paid. The trial court denied the defendant’s motion and a subsequent motion for reconsideration.

On appeal, the Michigan Court of Appeals addressed the narrow issue of whether the applicable limit on the plaintiff’s potential reimbursement for its services is limited to 200% of the Medicare payment (MCL 500.3157(2)(a)) or 55% of the rates identified in its charge description master effective on January 1, 2019 (MCL 500.3157(7)(a)(i)). In reaching its conclusion, the court noted that MCL 500.3157(2)(a) clearly states that if Medicare provides coverage for the treatment or service, then the provider may recover from the no-fault insurer up to 200% of the amount Medicare would pay—i.e., the "amount payable . . . under Medicare." In contrast, the limitations under MCL 500.3157(7) are applicable only if Medicare does not provide an amount payable for a treatment or rehabilitative occupational training under MCL 500.3157(2).

Ultimately, the Michigan Court of Appeals concluded that the simple question in determining whether MCL 500.3157(2) or MCL 500.3157(7) applies is whether Medicare covers the service at issue. Contrary to the plaintiff’s argument, the method of calculating the amount Medicare would pay is irrelevant in answering that question and should not be assessed by a court when determining what subsection applies. In essence, MCL 500.3157(7) is inapplicable if Medicare covers the treatment or service at issue because coverage under Medicare implies that Medicare provides an “amount payable” for the treatment. The court, however, did not express any opinion on whether either party properly made calculation of the amount payable and remanded that issue to the lower court given the conflicting expert opinions on that matter.

Implication

In light of the Central Home Health Care Servs Inc v Progressive Mich Ins Co decision, No-Fault insurers should focus more on determining if a provider’s charges for treatment and services are covered by Medicare, i.e., if Medicare provides an “amount payable” for the treatment or service rendered. If the treatment or service rendered is covered by Medicare, then the provider may recover from the No-Fault insurer up to 200% of the amount Medicare would pay (or less depending on the dates of service). The decision also provides avenue for additional motion practice to tackle inappropriate billing by medical providers.