Transportation Law Hub

The enactment of 2019 PA 21 and 2019 PA 22 in the 2019 reform to the Michigan No-Fault Act, MCL 500.3101 et seq., has resulted in uncharted and murky open waters on both sides of the “v” for plaintiffs and defendants as well as judges across the state. 
 
The enactments have led to inconsistent rulings in trial courts in Michigan, namely in connection with the applicability of the fee schedule application under Medicare to No-Fault cases… that is, until now.
 
On Oct. 4, the Michigan Court of Appeals issued a published decision in Canty v Mason to clarify the interplay of several statutory provisions concerning the application of the fee schedule under MCL 500.3157 in third-party lawsuits and the duty to mitigate damages.
 
Following a February 2021 automobile accident, Canty filed suit against Mason, asserting a claim for negligence and entitlement to damages under MCL 500.3135(3)(c). Canty was a Medicare recipient and opted out of Personal Protection Insurance (PIP) benefits payable under MCL 500.3107(1)(a) on his personal auto insurance policy because he had “qualified health coverage” under MCL 500.3107d(1) and d(7)(b)(ii). Despite Canty’s opt-out due to Medicare coverage, it was not used to pay for his accident-related medical expenses. 

At the trial court level, Mason argued that Canty was treated by medical providers who accept Medicare but that Medicare was not billed for the services and that some medical providers failed to charge consistent with the rates set by Medicare for the care and treatment. As such, Mason sought relief from the trial court to dismiss all bills that Canty or his medical providers did not attempt to bill to Medicare. He additionally argued that any recovery of allowable expenses is subject to the fee schedules in MCL 500.3157.
 
The appellate court noted that MCL 500.3109(1) states “that ‘[b]enefits provided or required to be provided under the laws of any state or the federal government shall be subtracted from the [PIP] benefits otherwise payable for the injury under this chapter.’” In addition, the court highlighted the significance of the fee schedule provisions outlined in MCL 500.3157 relevant to the case and appeal, which explicitly limit a medical provider’s reimbursement amount.
 
The “short and sweet” of the appellate court ruling is that the fee schedule applies to third-party claims and that a plaintiff has a duty to mitigate its damages. Specifically, the court held:
 
We conclude (1) that any damages recoverable by Canty under MCL 500.3135(3)(c) must constitute “allowable expenses” under MCL 500.3107 to MCL 500.3110, (2) that the fee schedules in MCL 500.3157 apply to Canty’s action, (3) that common-law, mitigation-of-damages principles are also applicable, (4) that under either MCL 500.3109(1) or common-law mitigation principles, Mason is entitled to a setoff for medical expenses that would have been covered by Medicare, and (5) that, if necessary, the trier of fact must resolve whether any incurred expenses for services rendered by providers who did not accept Medicare were reasonably incurred for purposes of mitigating damages. With these guideposts in place, Mason is free to renew his motion for summary disposition should he be so inclined.

Will Mason renew his motion for summary disposition?  That is a question to which there is no answer at present.  However, based on the appellate court’s recent decision, he is welcome to do so – and trial courts now have the “guideposts in place” to render a clear decision in navigating the open waters of jurisprudence should Mason choose to do so.