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Insurance Reform

Auto Insurance Reform in 2019 (SB1/PA21):

  • SB1/PA21 eliminated the mandatory Premium for Lifetime Medical Care coverages for Michigan residents. We now have Personal Injury Protection (PIP) Choice Coverage levels/options.
  • This bill, in addition to many things, was intended to eliminate/reduce fraud, implement a fee structure for services/providers, and ensure accreditation for health care providers delivering care.
  • Only those that select Unlimited Lifetime Medical Coverage under their Personal Injury Protection (PIP) will now pay the Michigan Catastrophic Claim Association (MCCA) fee to pay for their needed care.

The Current Dilemma:

  • SB1/PA21 allows providers to charge 200% for Medicare covered services. (Senate, 26).
  • Medicare does not provide for payment of hourly care in the home (Attendant or Nursing Care) (Medicare.gov, 2021)
  • Medicaid, Veterans Benefits, Workman’s Compensation Benefits, Long-Term Care Insurance, and MI Auto Insurance provide payment for hourly Attendant and Nursing Care.
  • When drafting SB1/PA21, Legislators seemed to have assumed Attendant Care and Hourly Nursing Services were covered by Medicare.

What is Going to Happen to our Michigan Residents needing Attendant and Nursing Care?

  • Attendant Care and Hourly Nursing Care are not paid by MEDICARE. Therefore, as we understand it, charges as of January 1, 2019, will be cut by 45% effective July 1, 2021 (Senate, 27). This is a Government Imposed Reduction.
  • Average Home Care providers profitability in Michigan, and across the United States, range between 7-10%. This is the percentage prior to taxes and any finance charges.
  • On July 1, 2021, a bill/payment rate of 30 dollars/hour will go to payment rates of 16.50/hour (45% reduction).
  • Home Care providers (and others) understand there isn’t Legislation that supports negotiating rates above this Government Imposed ceiling
  • Our Michigan Catastrophic Care Association (MCCA) have become a bigger ‘bully’ over the years to negotiate fair pricing to serve our Medically Fragile patients.
  • With more than 100 lawsuits on behalf of the families we serve, the MCCA has been disinterested in the Care needed for injured drivers to stay out of the hospital and continue on their road to recovery.
  • Having the MCCA/Auto Insurers show up to ‘help’ is similar to having the IRS stop in and mention they are here to help.
  • Post-Acute Providers (Home Health Care included) will be unable to provide the staff needed after July 1st. (Wages starting at $14/hour).
  • In a recent Mediation regarding services for a Quadriplegic (injured in 2017) and completely dependent upon others, the MCCA informed us they would pay $30.00/hour for unpaid claims to date, and starting July 1, 2021, pay $20.00/hour (with inflation calculated into that rate).
  • Unfortunately, the care for this individual will end on June 30, 2021 despite care needed to assist in completing his daily activities to get up, get ready for the day, and get to work.
  • As Mr. Clinton of the MCCA pointed out, post acute care does (and should) account for the majority of the MCCA annual budget as those needing these benefits, which Michigan Residents paid for.

Solutions:

  • Continuing the percentage formula of Medicare as outlined in SB1/PA21 (as is). If a service is not covered by Medicare, but is covered by Medicaid, apply the same methodology to locally or Statewide Medicaid rates. This methodology would protect Residents who have moved to other States as part of their recovery
  • This would assure critically needed and Nationally recognized services would continue.
  • This would eliminate egregious billing practices.
  • Drivers who purchase Unlimited Lifetime PIP coverage options, and therefore pay the MCCA fee, should expect the service they are paying for to be commensurate with these coverages.

Suggested Action:

  • Please CALL your Legislators along with House and Senate Leadership (Wentworth, Frederick, Lasinski, Shirkey, Lauwers, Schmidt) and share your story of how in home care/residential care has helped you or a loved one.
  • Please CALL your Legislators and request an up to 220% of Medicaid fix for Post Acute Providers so that clients who pay auto insurance premiums obtain care and service above the medicaid level standard.
  • Click here to find your District Representative. Click here to find your State Senator.
  • Contact us for any information regarding this issue and ask for Kris Skogen, or email him directly at krisskogen@advisacare.com.

Further Reading: