How Michigan Automobile No-Fault Reforms Affect In-Home Care

Car accident victims receiving in-home attendant care from a family member may find their benefits reduced by a recent No-Fault law that took effect July 1, 2021. The statute, which caps insurance reimbursement for family-provided attendant care to 56 hours a week, was part of the massive Michigan No-Fault automobile insurance reform package passed in 2019.

While the new law does not affect in-home care provided by a professional caregiver or agency, many accident victims prefer to be cared for by family members whom they know well and trust. And, 56 hours a week, or eight hours a day, is insufficient for seriously injured people who require round-the-clock assistance.   

In addition, July 1, 2021 is the effective date of another No-Fault reform that limits the amount certain providers can charge insurance companies for accident-related medical services. Here is an overview of the Michigan No-Fault auto insurance reforms and how they may affect your accident claim.

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What is In-Home Attendant Care?

Attendant care is assistance provided to accident victims whose injuries prevent them from independently performing basic daily living activities such as bathing and dressing. Services may also include taking a person to the doctor, dressing and wound care, assisting at mealtime and dispensing medication. Under Michigan No-Fault insurance law, attendant care benefits apply to services provided in the injured person’s residence rather than in a hospital or assisted living or rehabilitation facility. Some people may need help during certain hours such as morning or bedtime while others require round-the-clock help.  

Does Michigan No-Fault Cover In-Home Attendant Care Provided by a Family Member?

Attendant care is part of the Personal Injury Protection (PIP) coverage included in every No-Fault policy. PIP benefits cover “allowable expenses consisting of reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.” This includes assistance provided in the home for seriously injured accident victims.

Prior to the Michigan No-Fault auto insurance reforms, necessary attendant care was covered regardless of whether the provider was a family member or a professional caregiver. However, as of July 1, 2021, insurance companies are only required to pay for 56 hours a week of in-home attendant care provided by a family member or other personal acquaintance.

According to the new Michigan No-Fault law, the 56-hour limit applies to caregivers in the following categories:

• An individual who is related to the injured person
• Someone who lives in the same household as the injured person
• An individual with whom the injured person had a business or social relationship before the injury

The new limitations do not apply to in-home attendant care that has been provided prior to July 2, 2021. There are also no limits on in-home attendant care provided by an agency or other professional caregiver under the new reform.  

However, insurance companies have the option of contracting with family members or personal acquaintances for in-home care exceeding 56 hours a week. While not required to do so, insurers may choose to exercise this option because family members generally charge less than for-profit agencies or professional caregivers.

Does My PIP Medical Coverage Level Affect Attendant Care Benefits?

It may. For those who opted to retain their lifetime unlimited PIP medical coverage, the only limits on attendant care will be the new 56-hour cap for services provided by a family member or personal acquaintance.

However, for individuals covered by No-Fault policies with one of the lesser PIP medical coverage options ($50,000 $250,000 or $500,000), attendant care will be reimbursed according to the limits of the policy.

For example, suppose a person who has a No-Fault policy with maximum PIP medical benefits of $250,000 is severely injured in a car accident. If full-time attendant care is needed for several months or years, the cost will eventually exceed $250,000. Consequently, the individual will accrue devastating medical bills, for attendant care and other necessary treatment and services.

In these unfortunate instances, the victim may be able to seek recourse by filing suit against the party responsible for the accident. However, because these lawsuits are extremely complicated, it’s important to contact a knowledgeable auto accident attorney as soon as possible if you are injured in a crash.

How Can I Make Sure I’m Covered for Attendant Care if I’m Injured in an Auto Accident?

The only way to ensure coverage of all reasonable and necessary accident-related expenses is to choose a Michigan No-Fault policy with unlimited lifetime Personal Injury Protection (PIP) medical benefits. This coverage includes surgeries, hospitalization, doctor visits, prescriptions, rehabilitative therapy, durable medical equipment, home and vehicle modifications and in-home attendant care.

In addition, insurance companies are legally required to offer a rider that provides additional coverage for in-home attendant care that exceeds the insured person’s policy limit for Personal Injury Protection (PIP) medical coverage. Any vehicle owner who chooses a No-Fault policy with PIP medical benefits of $50,000, $250,000, or $500,000 may purchase a rider. However, it is best to discuss your coverage needs with a knowledgeable auto insurance agent to determine the best option for you and your family.  

Recommended reading: What Are the Six New Personal Injury Protection (PIP) Options and Which One Should I Choose?

How Sweeping Reforms Changed the Michigan No-Fault Insurance System

In an effort to lower premium costs, which were among the highest in the country, Michigan No-Fault insurance underwent a major overhaul in 2019. Prior to this, all Michigan No-Fault policies provided unlimited lifetime coverage for auto accident-related medical services, including in-home attendant care. The most significant of these new laws allowed policy holders to give up their unlimited Personal Injury Protection (PIP) medical benefits and choose a lower level of coverage at a reduced cost. This statute, along with the majority of the reforms, took effect on July 1, 2020.

The No-Fault reform package also included several other changes, such as:

• Increasing the minimum required liability coverage limits from $20,000 per person and $40,000 ($20,000/$40,000) per accident to $50,000 per person and $100,000 per accident ($50,000/$100,000); provided the person has opted for lower coverage from the statutory minimum of $250,000.
• In certain circumstances, requiring injured persons without Michigan No-Fault coverage to seek reimbursement for accident-related medical costs from the Michigan Assigned Claims Plan (MACP)
• Capping previously unlimited Michigan Assigned Claims Plan (MACP) claims at $250,000
• Increasing the  maximum “mini tort” limit from $1,000 to $3,000
• Changing the rules for out-of-state drivers and passengers who are injured in Michigan

Click here for a more comprehensive explanation of the Michigan No-Fault reforms.

In addition, the following two reforms took effect on July 1, 2021:

• Reimbursement for in-home care provided by a family member or friend is capped at 56 hours a week
• Physicians, hospitals and other providers will have to follow a Michigan No-Fault medical fee schedule that significantly reduces the amount they can bill for accident-related services

Recommended reading: What Every Michigan Driver Should Know about the New No-Fault Insurance Laws

How Does the New Provider Fee Schedule Affect My Accident Claim?

In addition to the law capping family-provided in-home attendant care at 56 hours a week, another statute in the Michigan No-Fault automobile insurance reform package became effective July 1, 2021. This law requires certain health care providers to follow the Michigan No-Fault medical fee schedule created in 2019 as part of the overall insurance reform package. In many cases, this pricing plan significantly reduces the fees health care providers can charge for accident-related medical services.

Under the new law, for services covered by Medicare, doctors, hospitals and other providers and facilities can charge up to 200% of the amount Medicare allows for a given service. After July 2, 2022, the percentage will drop to 195%, where it will remain for a year before being permanently fixed at 190% after July 1, 2023.

For services not covered by Medicare, such as in-home attendant care, facilities and medical professionals may bill 55% of the amount they charged on January 1, 2019, before the new laws took effect. Like reimbursement of Medicare-covered services, the percentage will be lowered incrementally, to 54% on July 2, 2022 and 52.5% for services rendered after July 1, 2023.

As a result, several facilities, especially those that treat patients with serious spinal cord and traumatic brain injuries, have indicated they may not be able to survive a 45% fee reduction.

Bipartisan legislation is currently pending in the Michigan House and Senate to revise the fee schedule for services not covered by Medicare such as rehabilitation therapy and attendant care. Watch this space for future updates on this evolving situation.

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