No-fault reform likely to be pushed into next session

Stakeholders are nearing compromise on the difficult no-fault insurance reform package, but the driving force of the effort — Senate Majority Floor Leader Arlan MEEKHOF (R-West Olive) — told MIRS he doesn’t think the timing will allow it to move this lame duck.

Meekhof has boiled down the Governor’s sweeping proposal that has stalled this session in the House to three main elements — a new fraud authority, a limit to the amount of family attendant care that can be paid out and the creation of a new authority to oversee catastrophic claims.

Gone from this streamlined version of SB 1148 is a fee schedule for hospitals and a cap to the amount of benefits a catastrophically injured person can collect.

Instead, Meekhof, who will become the Senate’s Majority Leader next term, is looking toward reforms all sides can essentially sign off on. He said he feels good about the progress, but with only six days left in lame duck, it’s likely the effort will be pushed into the 2015-2016 session.

The Michigan Health and Hospital Association (MHA) and the insurance industry expressed support for the direction Meekhof is headed in when asked today.

“The MHA remains open to looking at reasonable reforms to the no-fault system, but we’re not convinced it can be accomplished in the six session days we have left,” said MHA Vice President David FINKBEINER.

The issue deals with Michigan’s unlimited lifetime benefits for those catastrophically injured in a car accident.

Meekhof’s proposal phases out the current Michigan Catastrophic Claims Association (MCCA), which is overseen by insurance industry representatives and is not subject to the state’s open meeting and public document disclosure laws, to a new body.

A new quasi-governmental entity will begin handling new claims over $500,000 through a pay-as-you-go system. It will be subject to open meeting laws and the public will have access to records. The current MCCA would transition to the Michigan Legacy Claims Association.

Also, a new Michigan Automobile Insurance Fraud Authority would be created to crack down on automobile insurance fraud.

Finally, family members who currently take care of those catastrophically injured in car wrecks would be limited to 56 hours a week. After that, agency-provided in-home care will be provided to assist the family.

Under the bill, patients needing 24-hour care will still receive it, but a family member will not be allowed to collect what amounts to, in some cases, a $250,000 annual salary to provide allegedly around-the-clock care.

The bills accomplish the goal of some in the insurance industry to move catastrophic claims liability off their books and onto this quasi-public body. It addresses the insurance industry’s concerns about auto insurance fraud in the Detroit area and provides what the insurance industry sees as much needed costs savings.

“These are three components that we strongly support,” said Pete KUHNMUENCH of the Insurance Institute of Michigan.