While “reasonable efforts” must be taken to procure primary health insurance benefits prior to applying for no-fault benefits, those “reasonable efforts” do not include lengthy and costly appeals processes, held the Court of Appeals in St. John Macomb Oakland Hospital v State Farm Mutual Automobile Ins. Co.
, No. 329056.
An insured was injured in an automobile accident and was denied benefits in excess of his medical insurance benefits, which no-fault benefits were supposed to cover. After treating the insured the plaintiff received via the insured a letter from the insured’s health insurance company that some of his treatment was not medically necessary, thereby denying coverage. Plaintiff then sought payment from defendant for the excess medical expenses not covered by the insured’s health insurance in accordance with MCL 500.3101 et. seq.
Defendant refused payment stating that plaintiff did not expend “reasonable efforts” to obtain payment via the appeals process for a “medical necessity determination” from the insured’s health insurance provider. The plaintiff field suit and the trial court denied the defendant’s motion for summary disposition; however, the trial court reversed its position after defendant filed a motion for reconsideration.
The Court of Appeals reversed. It looked to Adanalic v Harco Nat’l Ins Co
, 309 Mich App 173, 176-178; 870 NW2d 731 (2015), where the Court of Appeals discussed the reasonable efforts requirement. In Adanalic
, the Court of Appeals stated that the reasonable efforts standard “does not, in light of the underlying purpose of the no-fault act, call for a potentially lengthy and costly effort.” Though Adanalic
involved an issue with respect to workers’ compensation benefits, the Court of Appeals said that the reasoning applied in this context as well and held that a “plaintiff does not need to engage in the potentially lengthy and costly effort of challenging a medical necessity determination in order to obtain health insurance benefits before proceeding to obtain payment from a no-fault insurer.” Accordingly, the Court of Appeals held that an individual or provider is not required to “appeal a medical necessity determination in order to establish that reasonable efforts were made to obtain payments that were available from the health insurer.”