Finally, a Solution to the Crisis in Care Receives a Fair Hearing
Finally, a Solution to the Crisis in Care Receives a Fair Hearing
Summarizing committee testimony on Senate Bills 530 and 531
For the first time in four years, a bill package with solutions to end the Crisis in Care is getting the attention it deserves.
There have been several bills introduced since 2019 with aims of fixing the devastating policies that cap reimbursement levels well below the cost of care for crash victims, but none even received a committee hearing. On October 4, Senator Mary Cavanagh opened up testimony on Senate Bills 530 and 531 in the Senate Finance, Insurance, and Consumer Protection Committee.
For an overall position on these bills, read MBIPC’s press release. In short, Senate Bills 530 and 531 implement the reasonable solutions MBIPC has been calling on for four years with a true fee schedule that allows providers to get back to work and fulfill their missions for all crash survivors. We expect a fair and balanced process in Senator Cavanagh’s committee, but we also expect the committee to act with urgency as every day more people are injured in car crashes and will need the expert rehabilitation and care MBIPC members provide.
As this bill moves through the legislative process, MBIPC will take deep dives into the testimony provided by all stakeholders—highlighting their arguments and key statements while fact-checking when needed.
After the bill sponsors, Senators Cavanagh and Sarah Anthony, provided an overview of their bills, I had the opportunity to set the tone of the hearing by providing testimony. You can read my entire written testimony here. Here is an overview of the other verbal testimony provided:
Bill Buccalo and Marget Kroese (In support of SB 530 and 531):
Mr. Buccalo and Ms. Kroese provided an overview of the rationale, methodology and process that produced the services and rates of the post-acute providers without a payable Medicare code found in SB 530. They referenced their work as co-leads for the project team that developed the Michigan Auto No-Fault Rehabilitation Clinic Fee Schedule ©. While not formally adopted as a stand-alone fee schedule, the rates in SB 530 stem from the work done in this project and the method to get those numbers. Essentially, the project established a reasonable approximation of 200% of Medicare reimbursement for services where Medicare does not provide an amount payable.
Methodology Overview: To really take a deeper dive, the following is the description of the methodology. It is from the project’s website.
A relatively simple approach was utilized to develop a fee schedule to establish a reasonable approximation of 200% of Medicare reimbursement for services where Medicare does not provide an amount payable. Post-acute rehabilitation providers have a number of services in the disciplines of Occupational Therapy, Physical Therapy, Psychological Counseling, and Speech and Language Pathology which are both commonly utilized by rehabilitation providers and required services of accident victims, and where Medicare lists amounts payable. By looking at the relationship of Medicare amounts payable compared to a sample of provider charges for those same services, a bridge factor can be established to represent this relationship. The bridge factor can then be applied to those services where Medicare does not provide an amount payable to establish a reasonable approximation of 200% of Medicare.
Bridge Factor Development
A list of 30 commonly utilized therapy services was established encompassing Occupational Therapy, Physical Therapy, Psychological Counseling, and Speech and Language Pathology. To ensure consistent comparability with provider charges, only “timed codes” were utilized. The 2019 Medicare payment amounts for Michigan were pulled from the Centers for Medicare and Medicaid Services website. For Michigan, Medicare has two localities with different payment amounts (01-Detroit, Macomb, Oakland, Washtenaw, and Wayne, and 99-Rest of State or All Other Counties). Each of these payment amounts were multiplied by 200% to identify the maximum payment amounts established by PA 21 under Michigan Auto No-Fault as of July 2, 2021.
To determine average provider charges, surveys were emailed to the members of the Michigan Brain Injury Provider Council requesting participants submit charges or rates in effect as of January 1, 2019, mirroring provisions of PA 21. Surveys requested participants’ rates for all of their services, including each of the 30 Medicare services needed for the bridge factor development as well as for all other services provided in the normal course of treatment, but where Medicare does not have an amount payable.
Survey participants returned surveys to an independent certified public accounting firm (CPA). The CPA firm de-identified company information and the de-identified data was provided to the project team analysists. An analysis was performed on the full data set to eliminate outliers that would overstate or understate the average charges.
To determine the bridge factor, the average provider charge was established for the 30 Medicare services included in the survey. The average provider charge was then compared to the same service under each Medicare locality, establishing a ratio for each, which was then averaged by therapy discipline. Finally, the four disciplines were averaged, giving them equal weight, and providing the final bridge factor by locality.
Applying the Bridge Factor to Establish Reasonable Approximation of 200% of Medicare
Utilizing the remaining data set, services where Medicare does not have an amount payable were identified and multiplied by the bridge factor for each locality to arrive at the reasonable approximation of 200% of Medicare.
Tammy Hannah, Origami Rehabilitation and Bob Mlynarek, 1st Call Home Healthcare (In support of SB 530 and 531):
Ms. Hannah and Mr. Mlynarek provided testimony on the damage done by the 55% reimbursement cap on their respective operations. Ms. Hannah discussed the financial challenges and resulting need to discharge patients and deny access to new patients for Origami’s residential program. Ms. Hannah testified that Origami’s profit margin went from a five-year average of 10% prior to 2019 to a -30% margin in 2022. Furthermore, Origami had to deny residential services to 27 individuals in 2023. Ms. Hannah stated that SB 530 provides reasonable fees that will allow Origami to serve those in need of their specialized residential services.
Mr. Mlynarek provided an example that in one week over this summer, his company had to turn away 10 catastrophic patients in one week, due to the reimbursement level being below the cost to provide quality in-home nursing and home healthcare services. Mr. Mlynarek also provided slides that compared the proposed rates in SB 530 to reimbursement rates from other funding sources:
Wayne Miller, Michigan Association for Justice and Maureen Howell, Mother of Sam Howell and We Can’t Wait (In support of SB 530 and 531):
Mr. Miller opined about the impact the 55% reimbursement cap has had on businesses, patients, and families. Mr. Miller also advocated for the removal of the arbitrary 56-hour per-week reimbursement limitation. Noting that agency providers are reimbursed higher than family members for similar services, he posed this question: “What sense does it make from a cost-containment perspective to force families to hire agencies at substantially higher rates?” Mr. Miller pointed out that the true cost containment measures such as PIP choice and caps in the Assigned Claims fund would remain intact. In conclusion, Mr. Miller summarized that the 2019 legislation punished catastrophic injury survivors and caregivers.
Ms. Howell provided her first-hand perspective and experience as a personal caregiver. She told the story of how she and her husband dropped their careers and their future plans in order to take care of their son, Sam, who was catastrophically injured in a car crash. She pushed back against the notion that rampant fraud required the legislature to put a cap on family care, noting that according to the Department of Insurance and Financial Services fraud reports from 2017-2020, there were only three cases of fraud totaling under $100,000.
When questioned by Senator Lana Theis as to whether it was Ms. Howell’s contention that families should be paid to care for their disabled loved ones, Ms. Howell cited a NIH Study that finds care from family and loved ones decreases medical and hospital use, improving health outcomes as well as less hospitalizations and shorter inpatient stays.
Karen Amick, Quality Care Consulting (In support of SB 530 and 531):
Ms. Amick provided insights from her experiences as a case manager. She testified about the services needed by people that sustain catastrophic injuries and the lost opportunities for rehabilitation and recovery because of the 2019 law. Ms. Amick shared insights from her more than 30 years of experience and asked the committee to “Let the rehabilitative community get back to supporting, healing, and helping” crash survivors by passing SB 530—a “historical marker in the right direction” to restore the continuum of care in Michigan.
Brian Woodward:
Chair Cavanagh ensured the attendees that more testimony would be heard in the near future. But, before ending the hearing, Chair Cavanagh started a video from Brian Woodward. Mr. Woodward tragically lost his life due to disruption of his care and the devastation he ensured because of the fee cap system implemented in the no-fault reform law. What was sure to be an emotional and impactful representation of the calamity crash survivors are facing was unfortunately cut short by technical difficulties. However, Chair Cavanagh assured the crowd the video would be played at the next hearing.
MBIPC Observations and Conclusion
The hearing on October 4 was something that the provider community, crash survivors, family members, and advocates have been waiting for—an opportunity to get our grievances about the no-fault reform law on the record with the Legislature and an opportunity to endorse real solutions to end the Crisis in Care.
The Committee heard from a diverse group of people, all with one shared experience: enduring the devastation caused by the auto no-fault reform law.
MBIPC set the record straight:
Our advocacy over the last four years has been misrepresented by the insurance industry as an effort to “go back to the old system”. To be clear, we have never advocated for a complete removal of a fee schedule. Instead, we have consistently advocated for a reasonable solution that meets the intent of the law – a fee schedule that brings consistency, predictability and reliability to the system while allowing access to essential rehabilitation and care services.
We believe the solutions included in SB 530 accomplish these objectives and represent an honest effort to include reasonable reimbursement rates for essential services.
This message was echoed by the voices on October 4. It was surprising to see the lack of real scrutiny or questions from Committee members, especially those that actively withheld a public hearing on past bills introduced to end the Crisis in Care. It is safe to assume there is a game plan to combat the efforts of Senators Cavanagh and Anthony, and it will most likely unfold in the next hearing in which the Insurance Alliance of Michigan and others will have the opportunity to express their predictable resistance to these narrow solutions.
Of course, it is MBIPC’s contention that the public relations and lobbying arm of the insurance industry has done nothing but push back against any efforts for this reasonable fix. They have spent the past four years denying the calamity and spreading misinformation. They have slandered our network of ethical expert medical providers and the families of crash victims. They have used crash survivors—their own customers—as scapegoats, as they have failed to lower rates across the state while raking in record profits. They have no credibility left in this discussion and should be ignored as we advance this reasonable solution that restores the continuum of care crash survivors need and deserve! But, everyone deserves the opportunity to voice their perspectives in a fair and balanced hearing. Hopefully, though, they will be held to account for their resistance to solutions.
And perhaps it was fate that paused Mr. Woodward’s video—now IAM will testify on the same day as Mr. Woodward’s story is told. It will be interesting to see if they maintain their position that everyone continues to receive quality care and that no one has died.
Sincerely,
Tom Judd
Executive Director
