Provider Fee Caps

A new change to the Michigan No-Fault Act is the fee caps the legislature put in place. The prior version of the No-Fault Act provided “[Providers] … may charge a reasonable amount for the products, services and accommodations rendered. The charge shall not exceed the amount the person or institution customarily charges for like products, services and accommodations in cases not involving insurance.”

Under the new Michigan No-Fault Act (eff Jun 11, 2019) the language was altered to give a definition to reasonable and customary in the form of formulas based upon certain criteria. While many insurance companies are calling this a fee schedule, it is not a schedule. It is nothing more than a statutory cap on what is “reasonable and customary.” Set forth in MCL 500.3157, the fee schedules categorize providers and list a sliding fee for each category.

The fee limitations do not apply to “emergency medical services” provided by an “ambulance operation.” MCL 500.3157(13).

Note that unaccredited neurological clinics will not be entitled to PIP reimbursement. See MCL 500.3157(12).

Tier I

The majority of providers will most likely fall under the default schedule in MCL 500.3157(2), which provides that “a physician, hospital, clinic, or other person that renders treatment or rehabilitative occupational training,” is limited to reimbursement as follows:

July 2, 2021–July 1, 2022: 200 percent of the Medicare amount for that treatment or training
July 2, 2022–July 1, 2023: 195 percent of the Medicare amount for that treatment or training
after July 1, 2023: 190 percent of the Medicare amount for that treatment or training

If Medicare does not have a CPT code or amount payable for a charge the provider needs to have a description master of charges (as of January 1, 2019) or can use the average for charges as of January 1, 2019 (if no description master) and multiply by the following:

July 2, 2021-July 1, 2022: 55 percent
July 2, 2022-July 1, 2023: 54 percent
after July 1, 2023: 52.5 percent

Tier II (MCL 500.3157(3)-(5))

A provider can seek certification from the director of insurance by providing all necessary documentation. (MCL 500.3157(5)) If a provider provides treatment or services to indigents at rate of 20%-30% of total volume as determined on July 1 of the year treatment was rendered (MCL 500.3157(4)(a); or is a designated freestanding facility (MCL 500.3157(4)(b)). The following fee limitations apply:

20%-30% Indigent by volume:
July 2, 2021–July 1, 2022: 230 percent of the Medicare amount for that treatment or training
July 2, 2022–July 1, 2023: 225 percent of the Medicare amount for that treatment or training
after July 1, 2023: 220 percent of the Medicare amount for that treatment or training

If Medicare does not have a CPT code or amount payable for a charge the provider needs to have a description master of charges (as of January 1, 2019) or can use the average for charges as of January 1, 2019 (if no description master) and multiply by the following:

July 2, 2021-July 1, 2022: 70 percent
July 2, 2022-July 1, 2023: 68 percent
after July 1, 2023: 66.5 percent

If a provider is over 30% indigent by volume, the provider shall get 250% Medicare rates for services. If no Medicare charge (no matching CPT code), 78% of January 1, 2019 rate in master or by average.

Tier III (MCL 500.3157(6-7)

If a facility is a Level I or Level II Trauma Center (as designated by MDHHS) the following fee limitations apply:

For treatment rendered after July 1, 2021 and before July 2, 2022, 240% of the amount payable to the hospital for the treatment under Medicare.
For treatment rendered after July 1, 2022 and before July 2, 2023, 235% of the amount payable to the hospital for the treatment under Medicare.
For treatment rendered after July 1, 2023, 230% of the amount payable to the hospital for the treatment under Medicare.

If Medicare does not have a CPT code or amount payable for a charge the provider needs to have a description master of charges (as of January 1, 2019) or can use the average for charges as of January 1, 2019 (if no description master) and multiply by the following:

July 2, 2021-July 1, 2022: 75 percent
July 2, 2022-July 1, 2023: 73percent
after July 1, 2023: 71 percent

What happens if they pay less than the fee limitations?

If an insurance company pays less than the amounts listed in MCL 500.3157, a provider has two choices: They can file a law suit or appeal back to the insurance company. Depending on the reason for denial or low payment, a provider may opt for using the Utilization Review Process.