At-Home Care Provider Believes $400 Insurance Refund Was Inflated
Lansing Lines is presented in cooperation with MIRS, a Lansing-based news and information service.
An at-home care provider for catastrophic car accident survivors is accusing the governor of “inflating and expediting” the $400 per-vehicle refunds, claiming it was inappropriately calculated as “a political favor.”
Based on his calculations, Bob Mlynarek, the co-owner of 1st Call Home Healthcare, said the Michigan Catastrophic Claims Association (MCCA) should have limited the reimbursement to $78 per driver in order to stay in line with the state law that lays out the calculations under which a refund is triggered.
“You tell me in the insurance code or the MCCA Plan of Operation where it says that the MCCA can just give out whatever they want as long as they think that they can maintain continuity of care. That’s not what the statute says,” Mlynarek said. “I checked with three different attorneys. I’m right. They did not follow the law.”
MIRS reached out to a spokesperson for the Coalition Protecting Auto No-Fault (CPAN) for a quote on the MCCA’s refund calculation. They also pointed to Mlynarek’s research on the topic.
DIFS Communications Director Laura Hall expressed that the law Mlynarek is pointing toward exists set a refund in motion. Once the fund gets to a certain point, refunds must be issued. However, it doesn’t require the refund to be capped at that prompting amount.
She said the refund procedure being referenced is related to how, at the start of July 2022, the department would be required to examine the affairs and records of the MCCA for the last three years.
“If DIFS’ actuarial exam finds the assets of the association exceed 120% of its liabilities, the Director shall order a subsequent refund. That process can and will still continue to occur,” Hall told MIRS. “Nothing in the statute requires the MCCA to retain what is determined to be an excessive surplus at other times.”
Mlynarek said he would assert that the MCCA “knows the true surplus to be much higher than $5 billion, so they felt totally comfortable giving away $3 billion.”
“Nice of them, but it violates the insurance code and their plan of operation. I do not think that it would look very good on the part of the governor or the MCCA to disclose a $7 billion surplus while catastrophic patients are losing their care,” he said.
The $400 refunds came as a response to Gov. Gretchen Whitmer urging the Michigan Catastrophic Claims Association (MCCA) to “swiftly” return its $5.036 billion surplus of July 2021 to “policyholders in the form of lump-sum checks.”
The MCCA was responsible for collecting what had grown to be a $220 fee that was paid by insured drivers to cover the lifetime claims of catastrophically injured individuals when they didn’t opt for unlimited coverage.
In December 2021, the MCCA proposed to the state’s Department of Insurance and Financial Services that it would return around $3 billion of its estimated surplus.
Under Michigan’s Insurance Code, if a refund will not threaten the MCCA’s ongoing ability to provide reimbursements for personal protection insurance benefits, the director may:
“Order the association to refund an amount equal to the difference between the total excess and 120% of the liabilities of the association, including incurred but not reported liabilities under subsection (10)(d) and order the members of the association to distribute the refunds under subsection (24).”
Based on Mlynarek’s calculations, the surplus in the June 2021 MCCA financial report would need to be $7.050 billion to create a $400 per-vehicle refund for 7.5 million drivers under the association’s plan of operation.
However, Mlynarek said he and his colleagues will not be pursuing any legal action against the MCCA, saying “we’re out of money. We’re not fighting anybody. I’m throwing this out there.”
“What’s more important to do with the catastrophic fund? Take care of the people that are catastrophically injured that paid into it, or give it back to the people that are not injured? What sense does that make?” he said.
To be clear, Mlynarek has a personal interest in seeing the law changed.
His home care operation went from 55 to 42 catastrophic auto patients since the 2019 auto no-fault reforms began taking effect in Summer 2020. As part of the reforms was a 45% reimbursement cut for patients injured in catastrophic car accidents, Mlynarek said “we discharged them so that we could pay the bills.”
He illustrated that the at-home care provider community is asking for “a little fix,” adding that the $2 billion still sitting as part of the surplus “could fund our cut for nine years.”
According to a December 2021 report from the University of Michigan’s Poverty Solutions Initiative, although early data on the reforms suggest that auto insurance rates have dropped across the state by nearly 20%, “Michigan rates remain the highest in the country.”
The report also mentions that in Detroit, average rates continue to consume more than 18% of the median household income within the city.
It also highlights that Michigan’s Catastrophic Claims Fund – the one managed by the MCCA – could “be playing a much larger role in ensuring long-term support for people catastrophically injured in an auto accident.” It underscored how in 2020, the fund was worth $23 billion and was constructed distinctly under the previous law to finance long-term care exceeding $600,000.
“There is no reason medical services paid for by this fund should be subject to a low reimbursement rate – the fund was specifically designed to cover the high costs of care that claimants with unlimited (personal injury protection) might incur,” the report reads. “Given that fever claimants will now have unlimited PIP, and therefore won’t hit the $600,000 threshold, the fund could potentially be repurposed to support long-term care providers by covering more claimants at sustainable reimbursement rates.”
Governor Signs Off On 72-Hour Urgent Prior Authorization Limit For Insurers
The Governor officially signed off on legislation that gives commercial insurers up to 72 hours to respond to a physician’s urgent pre-authorization.
Prior authorization consists of health insurers reviewing requests from prescribing physicians or patients on whether an individual can take a certain medication or undergo a treatment. A 2018 survey from the Michigan Health and Hospital Association found that “prior authorization contributed to 92% of all care delays.”
“Only 5-10% of prior authorization claims are ultimately denied for most facilities, yet providers are still consistently required to spend valuable resources and time explaining decisions to patients’ health insurers,” the MHA has explained. “Requirements for prior authorization requests are constantly changing, making it extremely difficult for providers to predict the likelihood of approval.”
SB 247 by Senate Health Policy and Human Services Chair Curtis VanderWall (R-Ludington) also mandates prior authorization requirements to be based on peer-reviewed clinical review criteria. Additionally, a health insurer must upload on its website if a new prior authorization requirement or restriction has been implemented or an amendment has been added.
“While the intent behind the prior authorization process is to promote safe, timely and cost-effective care, the process itself has been widely viewed as inefficient and burdensome,” VanderWall said in a statement. “This can directly affect the treatment and care a patient receives and could pose significant risks to a patient’s health. This law will help improve the process and ultimately benefit patients.”
In a celebratory press release, the Michigan State Medical Society (MSMS) expressed that patients can “now rest easy knowing insurance company prior authorization practices will no longer prove to be an impassable roadblock.”
“In signing SB 247, Governor Gretchen Whitmer has ushered in a new era where transparency, clinical validity and fairness to patients will all be factored into the prior authorization process, protecting Michigan patients from costly and dangerous delays in access to health care,” said MSMS President Pino Colone.
Blue Cross Blue Shield of Michigan also issued the following statement: “We applaud Gov. Whitmer for signing Senate Bill 247 into law and appreciate Senator VanderWall’s efforts to bring together all of the health care community to deliver solutions that will get Michigan citizens high-quality, evidence-based care at the right time and the right place. This new law is proof that bringing all of our stakeholders together and with effective, transparent and patient-focused discussions is another step toward all of our goals for a healthier Michigan.”
Nurse, Doctor Trainers Receive $1,000 Mentorship Tax Credit Under Bill
A $1,000 tax credit would be rewarded for every 250 hours someone trains a medical doctor, advanced practice nurse or a physician assistant, under a Senate bill.
“We’re not only facing a nursing shortage, but we’re also facing a shortage of people who teach our nurses,” said Sen. Jeff Irwin (D-Ann Arbor) in a press release. “Without preceptors, our medical schools can’t enroll as many students, and we can’t train enough doctors, nurses and care workers.”
A “preceptor” is the qualified trainer who mentors and supervises medical and nursing students as they complete their training and licensure. They observe how the student does while performing first-time procedures, simultaneously superintending the rookies and ensuring patient safety.
Nationally, a report conducted in February 2022 by Incredible Health found that 34% of nurses have expressed “it’s very likely that they will leave their roles by the end of 2022.” Forty-four percent of that group pointed to burnout and a high-stress environment as what was inflating their desire to exit the profession.
As health care professionals prepared to leave the crucial industry, a recent article from the American Nurses Association found “nurse practitioner (NP) students are often unaware of the difficulties they will face finding preceptors.”
“You put out feelers for preceptors, but everyone is either booked, their facility does not allow students or they just do not want to precept,” the article reads. “Some perceptors found themselves immersed in work in areas hard hit by COVID-19; in other areas they were laid off, furloughed or part of restructuring that included a change in office location and sometimes even specialty.”
SB 998 and SB 999 by Sens. Irwin and Senate Health Policy and Human Services Chair Curtis VanderWall (R-Ludington) would create the aforementioned tax incentives.
“Just like when they treat patients, preceptors are on the front lines of preparing the next generation of nurses and doctors. These experienced mentors are key. Reducing their tax burden so that they can better support families is one of the best ways we can show our appreciation and recognize their critical role in our health care system,” VanderWall said in the press release.
Future Of Medicine Report Reveals Where Health Care Leaders See Industry Heading
The future of medicine is doctors working together to make sure more of their time is treating patients while also offering a leading role in making suggestions on how to reduce waste and cut costs within the health care system.
Michigan State Medical Society released a report to show physicians, caregivers and policy makers the issues they view as critical to the industry.
The report, titled The Future of Medicine, asked 60 health care leaders where they think the industry is headed over the next five years. The report looked at medical practices, payment models, technology, universal coverage and Medicaid.
MSMS CEO Julie Noval said there have been a lot of technological changes, research and the ongoing COVID-19 pandemic that has changed the face of health care in a short amount of time.
“Given that reality, it felt like the perfect time to look ahead and determine what the future of medicine in Michigan should be,” Novak said.
Some of the areas the report looked at included:
– Improving electronic health records
– Health equity
– Create multidisciplinary partnerships in health care
– Create a new payment model for health care based on value and risk
– The access to, affordability and quality of health care
April Starts With Stable COVID Numbers
The Michigan Department of Health and Human Services reported 1,661 new cases of COVID-19 and 33 new deaths of the virus over a two-day period. While the daily count has risen the average has remained stable.
The weekly average of COVID-19 cases is 638. The average was slightly lower than the last full week in March, which was 651.
The average death rate for March was 33, which has also stabilized.
The health department also announced Wednesday the second booster shot was approved for people 50 and older or the immunocompromised over age 12.
Several county health departments are offering the booster. The MDHHS website is offering a locator to find vaccines.
The health department said vaccine numbers would be updated on Wednesdays going forward, but 66.6% of Michiganders have received at least one vaccine dose as of March 28.