07/29/2021
Our owner, Joyce Mauk was interviewed. Please see below.
State regulator: Auto insurers can't push car accident victims into 'warehouse care'
Chad Livengood
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• New state law slashes medical care providers' payment rates by 45 percent
• Insurance carriers could be subject to penalties for not meeting contractual obligations
• Some home health care agencies have dropped patients with auto insurance since July 1
Anita Fox
ACME — Michigan's top insurance regulator said Wednesday that auto insurers are required to help injured drivers find access to "appropriate" medical care and "not warehouse care," even as providers drop no-fault clients because of a new state law slashing their payment rates by 45 percent.
"We're not going to take for an answer like, 'Hey, sorry, we can't find a caregiver.' That is not an acceptable answer for the governor," said Anita Fox, director of the Michigan Department of Insurance and Financial Services. "It's not acceptable answer for us. I don't think that's what the Legislature envisioned."
Auto insurance carriers that don't "make sure care is in place" for customers could be subject to penalties for not meeting the contractual obligations of their policies, Fox said.
"We consider this access to care for patients to be a primary focus right now, and we want to see every one of those patients get everything they're entitled to," Fox said.
Fox spoke Wednesday morning on stage at the Michigan Association of Health Plans' annual conference at the Grand Traverse Resort near Traverse City.
Fox's comments mark one of the strongest consumer-focused messages yet from Gov. Gretchen Whitmer's administration about how insurance regulators intend to police implementation of the new payment structure.
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Michigan's 2019 auto insurance reform law included first-of-its-kind caps on payments insurers make on claims from medical providers that care for catastrophically injured motorists. The new law, which went into effect July 1, capped rates for home health care agencies at 55 percent of what they charged on Jan. 1, 2019.
Advocates for injured drivers argued the 45 percent cut in payments to providers is so deep that a segment of the health care sector built upon the once limitless medical benefits of auto insurance may go out of business, leaving high acuity injured motorists with few options for care short of a nursing home.
Among her questions for auto insurers, Fox said she wants them to show the department, "What is the plan to make sure it's appropriate care, not warehouse care?"
"You promised a certain level of care to these patients," Fox said. "And if they're not getting that, then that's something where we need to go to the Legislature and say we have documented cases where we've done everything that we can to get these people appropriate care."
An unknown number of home health care agencies have dropped patients with auto insurance since July 1, forcing the injured drivers to either pay for attendant care out of pocket, get family and friends to help them with their in-home care or move into nursing or assisted living facilities, according to case managers interviewed by Crain's.
"Our case managers are on the phone constantly because our clients are so scared — they know if they lose care they're going to end up in a nursing home," said Joyce Mauk, owner of Wellspring Case Management in Plymouth. "We're spending an enormous amount of time searching for home care."
Wellspring Case Management has about 250 auto accident survivors who mostly have some form of paralysis and require round-the-clock care, Mauk said.
Mauk said two of her company's clients who moved into nursing homes because their home health care companies quit due to the new payment rates have since died. Though the exact circumstances of those deaths are not entirely clear, she said, the two patients were not in failing health before the new law went into effect July 1.
A third client of Wellspring Case Management is in a hospital intensive care unit after losing his in-home caregivers, Mauk said.
"All of a sudden, we have two dead clients and one in the ICU — all since July 1," Mauk told Crain's on Wednesday.
At the MAHP conference, Fox said the insurance department is hearing "anecdotal stories like that."
"These cases are very individualized," she said. "So when I hear somebody died because of the change in care, we certainly never want that to happen."
Fox said the new law's 56 hours per week limitation on in-home attendant care by family members and friends does not let insurers off the hook for additional hours of care. Insurers are required to either contract for additional hours with a home health care agency or with the injured driver's family and friends, Fox said.
"If you have medically appropriate care 24/7, you're still entitled to that," Fox said.
Nic Antaya for Crain’s Detroit Business
Marshala Goins (right) and her daughter, Jamesha Goins, help her son, James Goins, into his bed at James’ home in Newport. Since Michigan's new auto insurance law went into effect July 1, many families have been in limbo about the payment structure from insurance companies for the round-the-clock care auto accident victims need.
Injured drivers and medical providers across the state are reporting a host of new problems with insurers not responding to inquiries about what they will pay for under the new law.
Fox said injured motorists or their guardians are encouraged to contact the state insurance agency and file complaints if an insurer is trying to impose "unconscionable requirements" in new contracts for long-term attendant care.
Erin McDonough, executive director of the Insurance Alliance of Michigan, said Wednesday that the industry group representing auto insurers encourages motorists who believe they "are not receiving medically necessary care" to contact DIFS.
"Insurance companies and their agents are there to answer the call — day or night — to help individuals and families navigate changes to Michigan's auto no-fault law," McDonough said in a statement. "We encourage families who have heard from their medical providers that care may be ending or changing to reach out to their case manager or auto insurance company if they haven't already done so."
DIFS will review individual insurance company contracts for each driver to ensure their access to care is not being impaired, Fox said.
"We're working through every single one of those individually," she said.
Fox also said her department "reached out" to hospitals this week after hearing stories of injured drivers without in-home caregivers "getting dropped off" at hospitals.
"Don't wait, don't try to work that out yourself," Fox said. "We will work with the auto insurers to find acceptable care."
Late last month, the Legislature sent Whitmer a bill appropriating $25 million in taxpayer money for a fund to reimburse medical providers for their costs not covered by the 55 percent rate cap. The fund is limited to $500,000 per provider, which have said it won't come close to addressing financial shortfalls in managing their businesses.
Other drivers who opted out of unlimited medical coverage under the Personal Injury Protection portion of their auto insurance are running into the limitations of policies with $250,000 or $500,000 of coverage.
CAPS Remodeling, a Madison Heights company that sells and installs equipment to make homes accessible for people with disabilities, has received letters this month from the insurance companies of three of its clients cutting off payment for rented wheelchair ramps because they've exhausted their benefits.
"Insurances are really tightening up on everything we do," said Rae Houle, office manager of CAPS Remodeling.
Modification of homes — or construction of custom-built homes — to make them accessible for injured drivers who become paralyzed in an auto accident is one of the benefits under Michigan's unique no-fault insurance law.
But the bookkeepers at CAPS Remodeling are unsure whether they'll be subject to the fee schedule, which caps payments for services with a Medicare billing code at 200 percent of what Medicare pays medical providers.
The problem is, Houle said, Medicare doesn't pay for aluminum wheelchair ramps, leaving her in limbo over how much the company will be paid for its products and services.
"We're waiting to see," she said.
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