Richard P Koski v. Auto Club Insurance Association
328233
| Mich. Ct. App. | Feb 14, 2017Background
- Plaintiff was seriously injured in a motorcycle accident; Marquette General Hospital and other providers treated him.
- Plaintiff’s health insurer, Blue Cross & Blue Shield of Michigan (BCBSM), paid providers under participation agreements, and providers accepted reduced payments in full satisfaction; the reduction (the “BCBSM differential”) totaled $142,561.
- Auto Club Insurance Association (ACIA) was the motor-vehicle no-fault insurer and reimbursed BCBSM for BCBSM’s payments; ACIA was undisputedly first in priority to pay PIP benefits.
- Plaintiff sought recovery from ACIA of the BCBSM differential, arguing those amounts were “incurred” under MCL 500.3107(1)(a); the trial court awarded plaintiff the differential and related penalty interest under MCL 500.3142.
- ACIA appealed; the Court of Appeals reversed as controlled by prior decisions holding that only amounts a plaintiff has actually incurred (i.e., remains liable to pay) are recoverable under MCL 500.3107(1)(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held | |
|---|---|---|---|---|
| Whether the BCBSM differential qualifies as "incurred" medical expenses under MCL 500.3107(1)(a) | The differential reflects billed medical expenses that ACIA should cover; plaintiff remained entitled to the full billed amounts despite BCBSM payments | Because providers accepted BCBSM payments as payment in full and will not pursue plaintiff, plaintiff did not "incur" the differential and thus cannot recover it | The differential was not "incurred"; plaintiff may not recover it from ACIA | |
| Whether plaintiff can treat BCBSM payments as mistake to force ACIA to pay differential | BCBSM paid in error; absent BCBSM, ACIA would have been liable for full bills, so ACIA should pay the differential now | The actual facts matter: BCBSM paid and providers discharged liability; plaintiff suffered no outstanding obligation | Court rejected the mistake theory; BCBSM payment and providers' acceptance defeat recovery | |
| Whether penalty interest under MCL 500.3142 applies to the BCBSM differential | Plaintiff sought penalty interest on the differential awarded by trial court | ACIA argued differential was not owed, so no penalty interest on amounts not owed | Court reversed award of penalty interest tied to the differential | |
| Precedential constraint | Plaintiff argued Bombalski was wrongly decided | ACIA argued Bombalski and Williams control | Court held it was bound by Bombalski and Williams and followed them | Bombalski and Williams control; plaintiff's argument rejected |
Key Cases Cited
- Bombalski v. Auto Club Ins. Ass'n, 247 Mich. App. 536 (court held that recoverable no-fault benefits are limited to charges the plaintiff actually incurred)
- Williams v. AAA Mich., 250 Mich. App. 249 (applied Bombalski to deny recovery of provider billing differentials accepted as payment in full by health insurer)
- Loweke v. Ann Arbor Ceiling & Partition Co., LLC, 489 Mich. 157 (standard of review for summary disposition)
- Oakland Co. Bd. of Co. Rd. Comm'rs v. Mich. Prop. & Cas. Guar. Ass'n, 456 Mich. 590 (principles of statutory interpretation)