State insurance commissioner says goal is to ‘save no fault’

By Chad Livengood
Detroit News Lansing Bureau

Detroit — Michigan’s insurance commissioner on Friday disputed Oakland County Executive L. Brooks Patterson’s contention he’s trying to “dismantle” unlimited lifetime medical benefits for auto accident victims.

Patterson waded into the no-fault debate earlier this week, criticizing his fellow Republicans in the Legislature and Gov. Rick Snyder — in an open letter posted on the county website — for seeking to cap catastrophic claims without first auditing the state’s accident fund.

The outspoken county executive, who suffered major injuries in an August car crash in which he wasn’t wearing a seat belt, specifically took aim at statements by state insurance commissioner Kevin Clinton, who has claimed “there are a lot of abuses, a lot of fraud” associated with auto insurance medical billing.

Patterson and no-fault advocates want an independent audit of the Michigan Catastrophic Claims Association, a state-created entity that charges each insured vehicle $175 annually to cover medical bills for accident victims exceeding $500,000. The MCCA is governed by auto insurance executives and Clinton is a non-voting board member. The association claims its reserves are about $2 billion short of what’s needed to keep up with projected lifetime medical costs for 14,000 recipients.

“In spite of his assertion, there is no effort to ‘dismantle’ no fault,” Clinton said Friday in an open letter distributed to the media. “To the contrary, our effort is to save no fault for the long-term.”

Snyder and Clinton have endorsed a $1 million lifetime cap on auto accident medical benefits, arguing regular health insurance should cover additional costs under the federal Affordable Care Act. They also want to implement a fee schedule on medical procedures covered by auto insurance in an effort to drive down costs.

“Large, national insurance companies have told me that they do not want to write automobile insurance in Michigan because of the unlimited medical benefits and the impact of the MCCA on their financial ratings,” Clinton said. “More competition and no fault reforms would help hold down premiums.”

Clinton’s letter did not address Patterson’s contention that hospitals charge auto insurance companies more for medical procedures because they don’t pre-approve medical procedures, don’t use electronic billing and “often refuse to pay their bills and/or force the medical provider to retain legal representation in order to get their invoices paid.”

Clinton said the call for more transparency from the MCCA is “a red herring,” noting the group posts financial reports on its website, michigancatastrophic.com.

Patterson’s letter also prompted a response from the Michigan Insurance Coalition, an industry group, which urged him to keep his powder dry until legislation is introduced this session.

“We believe that L. Brooks Patterson has been an outstanding public official and visionary county executive — but his vision on this issue is a little cloudy,” the group said in a statement Thursday.