An Update as the Legislative Process Continues to Unfold

An Update as the Legislative Process Continues to Unfold
We look back at the last few weeks, as well as a look forward

In the last few weeks, bills to end the Crisis in Care had a second hearing in the Senate Finance, Insurance and Consumer Protection Committee. Senate Bills 530, 531 and 575 were then promptly voted out of the Senate. MBIPC also had the opportunity to present to the House Committee on Insurance and Financial Services. As the bills head over to the House, we’re taking a look at the process over the last week and the outlook of these bills becoming law before the Legislature leaves in early November.

October 11: Senate Committee Hearing

The committee hearing on November 11th included testimony from stakeholders opposed to the bill. Jared Fleisher, representing Dan Gilbert’s Rocket Companies, voiced strong support for the portion of SB 530 that addresses the 55% reimbursement cap to services that do not have payable Medicare codes (i.e., post-acute services). However, he stated that he wished “his testimony could end there” because he spent the remainder of his testimony being critical of the adjustments made to the Medicare based fee schedule. This portion of his testimony had talking points consistent with other stakeholders that voiced opposition to the bill – arguing that the adjustment to the Medicare base rate would “raise rates” for all drivers, claiming it would cost drivers over $1 billion. Eric Poe from Cure Auto Insurance and Erin McDonough and Dyck Van Koevering from the Insurance Alliance of Michigan echoed these sentiments without clearly explaining where this $1 billion comes from and why insurers would have to raise premiums for all drivers, including those that choose to opt-out completely of PIP benefits or choose lower limits of $50,000 or $250,000.

Dr. Owen Perlman provided testimony in support of the bill – detailing the challenges that physicians face and the need for adequate reimbursement so that crash survivors have access to physicians with expertise to oversee their complex care plans. Laura Appel represented the Michigan Health and Hospital Association, also in support of the bill; Ms. Appel detailed the rationale behind the Medicare adjustment, noting that several hospitals around the state, including four hospitals in Detroit, are getting reimbursed at 250% of Medicare. Ms. Appel called for equity in the reimbursement system so that hospitals in rural areas receive the same level of reimbursement as those in urban areas and Metro Detroit. Ms. Appel demonstrated how 190% of Medicare is well below the average reimbursement rate from commercial health insurance experienced in neighboring states. She cited a study that shows, on average, commercial health reimbursement for hospital services is 267% of Medicare.

In addition, the committee heard three powerful testimonies about the direct experience of those impacted by the fee cap system and the 56-hour per week reimbursement limitations to family-provided attendant care. Chalisse Wilson shared her experience of altering her life and career to be the primary caregiver of her brother, Clarence. She concluded her testimony by noting that the Supreme Court’s decision in the Andary case should resolve the issues she and her family have faced. Yet, she continues to advocate fiercely because everyone choosing to purchase lifetime benefits deserves access to quality rehabilitation and care, of which will be unattainable without a legislative solution to the fee cap system and hourly limitations on personal caregivers. The committee also heard posthumous testimony from Brian Woodward, who tragically lost his life in July 2023, two years after having his care ripped away from him with the implementation of the fee cap system. The committee meeting concluded with a video from Anabelle and Brandi Marsh – who shared their experience after Annabelle sustained catastrophic injuries at the age of 2, after the passage of Public Act 21 of 2019.

October 18: Committee votes the bills out

Before the Senate committee voted on the bill package, several substitutes were adopted. The SB 530 substitute contains both technical and substantive changes. The most significant substitute substantially reworks the Medicare reimbursement piece. This (250% of Medicare) was the area that garnered the most intense scrutiny and opposition, including impassioned testimony, attack ads and commercials since the hearing the previous week. Essentially, the substitute restores most of the current language, with some changes: (1) restoring the 2021 rates for all tiers; (2) requiring reimbursement at the specified rate in each tier (rather than the current “up to” language); and (3) changing the indigent care tier calculation from annually to every three years.

The committee voted the bill package out – along party lines (5 Democrats voting to approve, 3 Republicans voting no). Interestingly enough, the Department of Insurance and Financial Services (DIFS) provided written testimony at the last minute without providing any oral testimony. The letter mirrored talking points heard by the committee on the November 11th hearing, but unfortunately, it used substantially vague language in its opposition to the bills.

DIFS must be held accountable and forced to answer questions quickly so that a better understanding of their opposition can occur in time to explore solutions urgently. Specifically, it is essential DIFS answers:

• What specific language/provisions in the bills will “significantly impact…auto insurance premiums paid by more than seven million drivers across the state”?

• How much would the MCCA per-vehicle assessment fee be increased?

• What specific language/provisions in the bills would “disproportionately affect” drivers that choose lower levels of PIP because they will “exhaust their PIP medical coverage limits much more quickly”?

• Setting aside the MCCA fee increase, what specific language/provisions of the bill lead to “increase insurance rates”?

• What specific level of increase in insurance rates will occur that will “lead to more uninsured drivers and less competition in the insurance marketplace”?

• What is meant by “broad-brush reimbursement rate increases”?

• How do they define “a narrower solution” to address concerns over access to care?

• Are there aspects of these bills (if other provisions are removed) that meet this definition?

Furthermore, they are flat out wrong with their blanket statement, “The Supreme Court in the Andary case addressed major concerns expressed by auto accident survivors and providers.” The Andary decision brought relief to a specific group of people injured prior to 2019; however, advocates have been very clear and consistent – a legislative solution is necessary so that ALL CRASH SURVIVORS have access to the level of care they are choosing with their PIP plans.

November 19: Presentation to the House Insurance Committee

Representing CPAN, I was joined by Bob Mlynarek from 1st Call Home Healthcare, Tammy Hannah from Origami Rehabilitation, and Chalisse Wilson to present on the Crisis in Care to the House Committee on Insurance and Financial Services. You can watch the entire presentation here (The presentation begins around the 49-minute mark).

The presentation highlighted the devastating impact of the fee cap system, reimbursement limitations for personal caregivers, and the problems with the current utilization review process. The committee learned of the “data” demonstrating the need for a solution – thousands of patient discharges, thousands of jobs lost, dozens of companies closing, and most tragically, several confirmed deaths. The committee also heard impactful direct experiences from Ms. Hannah, Ms. Wilson, and Mr. Mlynarek.

November 19: Senate Passes SBs 530, 531 and 575

Later in the day, the Senate held floor discussions on the bill package. Bill sponsors Senators Cavanagh, Anthony and Moss were joined by Majority Leader Winnie Brinks and Senator Damoose in passionately urging the Senate to pass the bills to End the Crisis in Care and restore access for crash survivors, 1,000 of which will require long-term care every year. Senators Thiess, Nesbit, and McBroom (authors of SB 1 in 2019 – later passed as Public Acts 21 and 22) argued against the bills – echoing previously stated opposition, shifting attention away from access to care and back on the claim that insurance rates would increase for all drivers.

Ultimately, the bills passed through the Senate on a 23-14 (1 abstaining) vote.

Moving Forward

The bills now go to the House. Several Representatives spoke at the October 3rd Rally to End the Crisis in Care. Detroit Caucus Chair Tyrone Carter said at the rally: “We were told the auto reform would lower costs, and we were also told crash survivors wouldn’t lose their care … both lies.” Representative Carter also made statements of commitment, including: “I’m proud to support the legislation that is coming out of the Senate.”

House of Representatives Insurance and Financial Services Committee Chair Brenda Carter said at the rally: “We can do better for the people of Michigan,” adding that the “time is now to find the right solutions” to ensure people “get the help and resources they need.”

It would be disingenuous to assert confidence that the House will move these bills swiftly. MBIPC’s genuine effort to bring forward reasonable solutions needs to be met with genuine efforts from the opposition to clearly articulate the specific concerns – most of which seem to have been addressed by the substitutions adopted. It will also take a strong bi-partisan push from House members to urge Speaker Tate and Chair Carter to move these bills with urgency.

Time is not on our side, but more importantly, time is not on the side of the 3 people injured every day who will require long-term care. Each day that passes without a legislative solution is a day of lost opportunity for recovery and appropriate care.

In 2019, the Legislature and Governor valued personal choice. No longer are people required to carry lifetime PIP benefits through their auto insurance premiums. However, without action, the Legislature and Governor are allowing insurers to sell these policies without ensuring the benefits are available in the unfortunate circumstance of needing them. You cannot value choice if you don’t ensure people get what they are choosing. It is tragic to know that people making the decisions to protect themselves and their families are not getting what they were promised. Only this Legislature and Governor can make this right by prioritizing the full passage of these bills before leaving early for their winter vacations.

Sincerely,

Tom Judd
Executive Director