Michigan Automobile No-Fault Fee Schedule Provisions: A Review of the Newly Proposed Administrative Rules
The Michigan Department of Insurance and Financial Services (DIFS) has proposed new administrative rules to implement the medical fee schedules contained in Michigan’s automobile no-fault statute. The proposed rules address certain issues arising under the fee schedule, including:
- The Medicare fee schedules applicable to reimbursements
- Providers eligible for enhanced reimbursement amounts
- Use of charge description masters, average provider charged amounts and regional averages
- Procedures for DIFS to collect information on provider charges
- Facility accreditation procedures
The Michigan fee schedule goes into effect July 2, 2021, and will apply to charges for treatment and training rendered on or after that date. DIFS has stated the fee schedule provisions will apply to both “new and existing claims” where treatment is rendered on or after July 2, 2021.
In addition, a copy of the proposed rules is available here.
About Michigan Automobile No-Fault Reform
In June 2019, Michigan enacted major reforms to its automobile no-fault insurance law. Provisions of the law have been phased in over time, including allowing policyholders to choose from various coverage options and benefit amounts in lieu of unlimited lifetime benefits, as well as the requirement that insurers institute utilization review programs relating to provider services.
The next significant step in the reform law is the institution of medical fee schedules pertaining to provider reimbursement. The fee schedules will become effective July 2, 2021. The newly proposed administrative rules, which DIFS issued in February 2021, will guide implementation of the fee schedules.
Overview of Michigan’s Statutory Fee Schedule Provisions
Reimbursement under Michigan’s no-fault fee schedules will be calculated based on provider setting and clientele:
- Base Reimbursement – The fee schedule sets most provider reimbursements at a percentage markup over amounts payable by Medicare.
- Enhanced Reimbursement – The fee schedule provides for enhanced reimbursements for qualifying providers.
- No Applicable Medicare – In situations where Medicare does not provide an amount payable for a treatment, providers will receive a reimbursement at a reduced percentage of the amounts in their charge description masters in effect on January 1, 2019. If a provider did not have a charge description master on that date, they will receive a reduced percentage of the “average amount” the provider charged on January 1, 2019.
In short, reimbursement rates are provided as a percentage of the amount payable under Medicare or, where there is no amount payable under Medicare, as a percentage of the provider’s charge description master or average charge for the treatment as of January 1, 2019.
You can find a complete summary of the fee schedule reimbursement provisions in our full breakdown of the Michigan Proposed Fee Schedule Rules.
The Proposed Fee Schedule Rules
Michigan’s proposed administrative rules largely address the above fee schedule provisions relating to provider reimbursement. The rules will do the following:
- Define the applicable Medicare fee schedule
- Establish procedures to determine which health care providers are entitled to enhanced reimbursement
- Establish procedures for DIFS to collect information related to provider charges to calculate payment or reimbursement
- Establish a methodology for adjusting provider charges using the medical care component of the consumer price index
- Establish procedures for DIFS to administer accreditation requirements for neurological rehabilitation clinics
The proposed rules are intended to ensure greater reimbursement consistency, promote cost containment and reduce disputes between providers and insurers, according to the Regulatory Impact Statement (RIS) and Cost-Benefit Analysis accompanying the proposed rules:
“The proposed rules help implement MCL 500.3157, which was intended to contain costs pertaining to no-fault benefits. Toward that end, the processes established by the proposed rules are intended to allow for consistency in reimbursement for no-fault benefits without unnecessarily burdening healthcare providers or automobile insurers.”
Next Steps for CCC
DIFS held a telephonic hearing on March 26, 2021, regarding the proposed fee schedule regulations. CCC Casualty submitted several written comments and questions to DIFS prior to the hearing, and we were in attendance for the duration of the session. Though DIFS did not address any questions during the call, it remains our hope that they will issue a revised rules set and/or provide guidance on the important issues regarding reimbursement under the Michigan no-fault fee schedule.
CCC is already working with customers to determine preferred configuration options and will continue to monitor for additional guidance or changes to the administrative rules from DIFS. If DIFS issues additional guidance, we will incorporate that information into the customer configurations.
Regulatory monitoring is a focus area for CCC. We actively identify, monitor and report on changes to relevant laws, regulations and guidance. We also monitor fee schedule and other changes in the medical community to supplement client’s monitoring. Our goal is to help clients stay up to date on changes like the Michigan fee schedule provisions and proposed rules.
For more information about the Michigan Proposed Fee Schedule Rules, see our full breakdown. In addition, you can review the proposed administrative rules here. Contact your CCC representative to learn more about how we’re helping customers implement the fee schedules and rules.