Reimbursement of personal protection insurance (PIP) benefits; Pre or Post amendment fee schedules; The Department of Insurance & Financial Services’ (DIFS) interpretation of Andary v USAA Cas Ins Co; “Reasonable & customary”

The court found that the circuit court properly held that the other party-DIFS “order—which concluded that post amendment fee schedules applied for dates of service after [7/1/21]—was erroneous and reversed that decision. Appellant-medical provider filed a provider appeal with DIFS claiming it was underpaid for services it provided to appellee-insurer’s insured, who was hurt in a car crash. DIFS found appellant was entitled to additional monies. The trial court reversed, finding DIFS used the wrong reimbursement methodology. The court held that the “circuit court did not err in concluding that the DIFS interpretation of our Supreme Court’s holding in Andary was erroneous.” The Andary Court found that application of the 2019 amendments of MCL 500.3157(7) and (10) to the insureds in that case would result in ‘a retroactive reduction of their vested contractual rights to receive uncapped PIP benefits pursuant to the insurance policies and incorporated statutes that existed when they were injured.’” Further, there “was no clear Legislative intent to apply the amendments retroactively to insureds with vested contractual rights to PIP benefits under the pre-amendment no-fault statutes so those provisions ‘do not apply to any insured who was injured while covered by an insurance policy issued before’” 6/11/19. Thus, “the insurance policies and the no-fault statutes that existed when the insureds in that case were injured controlled their entitlement to PIP benefits, not the amended provisions enacted by 2019 PA 21 and 2019 PA 22.” Here, like in Andary, the insured “suffered injuries in an automobile accident prior to 2019, and was entitled to uncapped lifetime medical care covered by PIP benefits under an insurance policy issued before the accident, consistent with the” no-fault act. Although appellant now agreed that “the pre-amendment payment methodology used for determining the reasonableness of the charges applies to PIP claims arising before the no-fault amendments,” it contended that appellee’s reimbursement for its services was nonetheless insufficient and not “reasonable and customary.” The court found that “DIFS misinterpreted . . . Andary.” It recognized that Andary referenced only MCL 500.3157(7) and (10), but its reasoning and holdings are “equally applicable to this case involving MCL 500.3157(2)(b), (8) and (9), as well as cases under similar circumstances.” Applying the 2019 amendments of MCL 500.3157(2)(b), (8), and (9) to the insured “would constitute a retroactive reduction of her vested contractual rights to receive uncapped PIP benefits under her insurance policy and the no-fault statute as it existed when she was injured.” There was no indication the Legislature intended the amendments of MCL 500.3157 to apply retroactively to individuals who have vested contractual rights to PIP benefits under the pre-amendment no-fault statutes, “which means that these provisions do not apply to any insured who was injured while covered by an insurance policy issued before” 6/11/19. Thus, the insured’s “no-fault insurance policy and the no-fault statute that existed at the time she was injured controls her entitlement to PIP benefits, ‘not the amended provisions enacted by 2019 PA 21 and 2019 PA 22.’” Appellant was entitled to reimbursement for services it provided “under the pre-amendment ‘reasonable and customary’ payment methodology.” Affirmed.