Liability of a no-fault insurer assigned to provide personal protection insurance (PIP) benefits for medical expenses otherwise payable by the assigned insured’s health insurance policy; MCL 500.3172(2); Distinguishing Spencer v. Citizens Ins. Co.; Whether the statute creates a coordination scheme; George v. Allstate Ins. Co.; Whether federal law preempted the statute; Distinguishing Bats v. Titan Ins. Co.; U.S. Department of Veterans Affairs (VA)

Concluding that Spencer was distinguishable, and that Batts did not support intervening plaintiff-pharmacy’s (ZMC) argument, the court held that defendant-assigned no-fault insurer (Farmers) was not liable for plaintiff-assigned insured’s (Oliver) prescription medications, which were covered by a Blue Cross health insurance policy. Thus, it reversed summary disposition for ZMC and remanded for entry of summary disposition for Farmers. Under MCL 500.3172(2), “PIP benefits payable through the assigned claims plan ‘shall be reduced to the extent that benefits covering the same loss are available from other sources.’” The court unequivocally held in George that this is a coordination statute and thus, “an insurer providing benefits under the assigned-claims plan is generally entitled to a setoff for any other benefits covering the same loss that are received by or on behalf of the injured party. The only statutory exception” is benefits under Medicare or Medicaid. ZMC relied on Spencer, but that case involved a dispute as to which of two no-fault insurers was higher in “priority for payment of the plaintiff’s PIP benefits. In that context, the assigned insurer must pay the PIP benefits and seek reimbursement from the higher priority no-fault insurer.” This case concerned “how an assigned insurer must proceed when it discovers that benefits covering the same loss are available from another benefit source other than a higher priority no-fault insurer.” The other benefits source here was a healthcare insurer, not a no-fault insurer. Thus, Spencer did not control. As to Batts, plaintiff there “was entitled to seek medical services from the VA, and federal law regarding the VA preempted this state’s no-fault statutes,” thus the court held that the no-fault insurer had to pay plaintiff’s claim. But this case did “not involve a veteran who received healthcare services through the VA. Therefore, the conflict-preemption analysis applied” there did not apply here. The court concluded that the trial court erred in finding that “Batts required Farmers to pay ZMC’s invoice and” then seek reimbursement from Blue Cross. “Unlike the VA, Blue Cross does constitute a ‘benefit source’ available to Oliver under MCL 500.3172(2), which results in the reduction of benefits payable from Farmers to Oliver and his assignees.”