Coalition Protecting Auto No-Fault

FOR IMMEDIATE RELEASE                                                    Contact: Ruthanne Sudderth

November 8, 2011                                                                         (517) 703-8631, rsudderth@mha.org

Proposed Changes to Auto No-fault Law Slash

Hospital Patient Care Resources

Local Hospitals Will Lose Tens of Millions of Dollars for Patient Care, Trauma Units

DETROIT — Health care providers in Southeast Michigan are urging lawmakers to put a halt to dangerous legislation that puts accident victims, jobs and taxpayer money at risk, and instead protect the state’s auto no-fault insurance law. Should the Legislature fail to do so, area hospitals and health systems including Beaumont Health System, Royal Oak; Detroit Medical Center; Mount Clemens Regional Medical Center; Oakwood Healthcare Inc., Dearborn; Saint Joseph Mercy Health System, Ann Arbor; and St. John Providence Health System, Warren, will lose tens of millions of dollars that fund patient care and trauma units.

The Michigan Legislature is considering House Bill (HB) 4936, legislation that would eliminate the lifetime medical care currently afforded through auto no-fault coverage, which has governed health insurance coverage for catastrophic automobile accidents since 1973. The proposals would allow auto insurers to choose the amount of personal injury protection (PIP) coverage they offer to drivers, ranging from as little as $500,000 to a maximum of $5 million. However, it would be impossible for any driver to choose lifetime PIP insurance, and a driver whose injury costs exceed the amount of purchased coverage would be forced to bring a lawsuit against another driver or, after exhausting personal resources, be forced onto the taxpayer-funded Medicaid program. Similar legislation has been introduced in the Senate, but has not yet seen action.

Under the bills, payment to health care providers treating and rehabilitating those injured in traumatic automobile accidents would be regulated by both the amount of insurance carried by the victims and a provision requiring that reimbursement be made under Michigan's Workers' Compensation fee schedule. This schedule is a governmentally determined price regulation on the amount of reimbursement providers can receive for treating injuries, regardless of the severity or the intensity of treatment necessary. The schedule, which was never designed or intended to address the extensive needs of those catastrophically injured in auto accidents, would apply to all health services provided, including those by hospitals, physicians, rehabilitation programs and long-term-care facilities.

Southeast Michigan hospitals and health systems would experience massive losses as a result of imposing the Workers’ Compensation fee schedule on the care of auto accident victims. Should the proposal become law, current service levels would be cut and trauma units that care for those with catastrophic injuries would be jeopardized. Ultimately, these changes would cost jobs and threaten health care access for every Michigan resident.

Despite the certain loss of health care benefits to accident victims and resources for patient care, the legislation provides no discernable value or improvement for consumers. The bill does not require auto insurers to, in turn, reduce subscriber premiums as a result of the diminished health care coverage. In fact, insurers have openly acknowledged that they will not commit to lowering premiums.

Michigan’s health care community asks the Legislature to defend the state’s auto no-fault law, which citizens have already voted to protect twice, by voting “no” on HB 4936. Preventing these irresponsible changes will help protect Michigan drivers, accident victims and families and preserve access to critically needed health care for everyone.

For more information, visit the Michigan Health & Hospital Association (MHA) online at www.mha.org or follow the Coalition Protecting Auto No-Fault on Facebook and Twitter (@ProtectNoFault).

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