VICTORIA TAYLOR, Plаintiff-Appellant, and ASCENSION PROVIDENCE HOSPITAL, Intervening Plaintiff, v FARMERS INSURANCE COMPANY, Defendant-Appellee, and PROGRESSIVE MARATHON INSURANCE COMPANY, Defendant/Third-Party Plaintiff, and USAA CASUALTY INSURANCE COMPANY, Third-Party Defendant.
No. 368754
STATE OF MICHIGAN COURT OF APPEALS
April 14, 2025
Wayne Circuit Court LC No. 21-001929-NF; UNPUBLISHED
Before: YATES, P.J., and O‘BRIEN and FEENEY, JJ.
PER CURIAM.
In this first-party no-fault action, plaintiff, Victoria Taylor, appeals as of right the trial court‘s order granting partial summary disposition in favor of defendant, Farmers Insurance Company. We affirm, but for reasons different thаn those given by the trial court.
Taylor was involved in a motor vehicle collision and sustained injuries. Those injuries were treated by Detroit Medical Center Sinai-Grace Hospital (DMC). The relevant treatment occurred between December 5, 2019 and December 8, 2019,1 and the cost of the treatment totaled $113,072.25.
DMC billed Medicaid for Taylor‘s treatment, and on January 17, 2020, Medicaid made a conditional payment of $6,202.78 to DMC for Taylor‘s medical bills. DMC accepted thе conditional payment, following which DMC‘s billing statements showed that plaintiff owed $0 to DMC.
At some point after Taylor was injured, she submitted a claim to Michigan Automobile Insurance Placement Facility, which assigned Farmers to Taylor‘s claim on January 25, 2021. Taylor subsequently brought this case against Farmers, seeking unpaid no-fault benefits.2 Farmers and Taylor were able to resolve all of their differences except for whether Farmers was obligated to pay no-fault benefits to Taylor for the billed cost of her treatment at DMC from December 5, 2019 to December 8, 2019.
On that issue, Farmers moved for partial summary disposition under
In response, Taylor argued that she incurred the full amount of the charges reflected in her medical bills when she received treatment from DMC, and that the Medicaid payment did not change this fact because a medical provider in Michigan is entitled to “the total amount of reasonable and customary charges, despite accepting payments by Medicaid.” Along with her response, Taylor submitted an affidavit from Andrea Prevost, a billing representative for DMC, who averred that the Medicaid payment that DMC accepted did not represent the reasonable and customary charge for the treatment that DMC provided to Taylor. As for Farmers’ argument that DMC was barred from seeking additional payments from Taylor after accepting a payment from Medicaid, Taylor argued that the caselaw on which Farmers relied was inapposite because Taylor technically did not qualify for Medicaid, as she was covered by a no-fault insurer.
At the start of the hearing on Farmers’ motion, the trial court clarified that the parties were not disputing that Farmers was liable but rather were disputing the extent of Farmers’ liability—
This appeal followed.
II. STANDARDS OF REVIEW
Farmers moved for partial summary disposition under
A trial court‘s decision on a motion for summary disposition brought under
III. ANALYSIS
Taylor argues that the trial court erred by granting Farmers’ motion for partial summary disposition. We disagree.
the plain language of this provision imposes four requirements that a PIP claimant must prove bеfore recovering benefits for allowable expenses: (1) the expense must be for an injured person‘s care, recovery, or rehabilitation, (2) the expense must be reasonably necessary, (3) the expense must be incurred, and (4) the charge must be reasonable. [Douglas v Allstate Ins Co, 492 Mich 241, 247; 821 NW2d 472 (2012).]
The parties dispute the third requirement—whether Taylor “incurred” expenses beyond what Medicaid paid to satisfy Taylor‘s bill. “To ‘incur’ means [t]o become liable or subject to, [especially] because of one‘s own actions.” Proudfoot v State Farm Mut Ins Co, 469 Mich 476, 484; 673 NW2d 739 (2003) (quotation marks and footnote omitted, alteration in Proudfoot).
The parties rely on competing cases to argue for different results. Taylor relies on this Court‘s opinion in Shanafelt v Allstate Ins Co, 217 Mich App 625; 552 NW2d 671 (1996), to argue that she incurred the entire amount of DMC‘s bill when she accepted DMC‘s medical treatment. Farmers relies on this Court‘s later opinion in Bombalski v Auto Club Ins Ass‘n, 247 Mich App 536; 637 NW2d 251 (2001), to argue that Taylor only incurred the amount that Medicaid paid to satisfy her bill with DMC.
In Shanafelt, 217 Mich App at 628, the plaintiff was injured while getting into a vehicle. The plaintiff‘s no-fault insurer denied her claim, so the plaintiff‘s health insurer paid it. Id. at 629. On appeal, the no-fault insurer argued that the plaintiff never “incurred” any expenses because her bills were “paid directly by her health insurer.” Id. at 636. To address this argument, the Shanafelt Court turned to a dictionary to define the word “inсur” because it was not defined in the no-fault act. Id. at 638. The dictionary defined “incur” as “to become liable for.” Id., quoting Random House Webster‘s College Dictionary (1995). The Shanafelt Court reasoned that the “plaintiff became liable for her medical expenses when she accepted medical treatment,” and the fact that her health insurer paid for her medical expenses “does not alter the fact that she was obligated to pay those expenses.” Shanafelt, 217 Mich App at 638.
In Bombalski, 247 Mich App at 538-539, the plaintiff was injured in a motor vehicle collision, and despite being eligible for no-fault benefits, the plaintiff‘s health insurer covered his medical care. The plaintiff‘s health insurer did not pay the entire amount of the plaintiff‘s medical bill, however, and the plaintiff‘s no-fault insurer argued in a motion for summary disposition that it was only liable for the amount that the plaintiff‘s health insurer paid to satisfy the plaintiff‘s medical bills. Id. at 539. The trial court agreed and accordingly limited plaintiff‘s recovery to the amount that his health insurer paid to the plaintiff‘s medical providers to satisfy the plaintiff‘s bill. Id. at 540. On appeal, the plaintiff argued that the trial court erred by limiting his recovery to what his health insurer paid rather than “the full amounts charged” by his medical providers “when he accepted their services.” Id. at 540-541. To address this argument, the Bombalski Court looked to Shanafelt‘s definition of “incur” to mean “to become liable for,” and explained that “liable” means “[r]esponsible or answerable in law; legally obligated.” Id. at 542-543 (quotation marks and citations omitted). With this understanding of “incur,” the Bombalski Court reasoned:
The satisfaction of plaintiff‘s medical bills by [the plaintiff‘s health insurer] through payment of less than the amounts charged by the providers relieved plaintiff of any responsibility or legal obligation tо pay the providers further amounts exceeding those proffered by [the plaintiff‘s health insurer] and accepted by plaintiff‘s health care providers. Because plaintiff bears no liability for the full medical service amounts initially charged by his health care providers, he has not incurred these full charges. [Id. at 543.]
After explaining why the public policy behind the no-fault act also supported this conclusion, id. at 543-545, the Bombalski Court concluded
that in light оf the ordinary meaning of incurred and the public policy behind the no-fault act, incurred charges within
MCL 500.3107(1)(a) do not encompass any amounts (1) exceeding those that plaintiff‘s health insurer actually paid in satisfaction of plaintiff‘s medical bills and (2) for which plaintiff no longer bears legal responsibility. [Bombalski, 247 Mich App at 546.]
Bombalski thus built on the foundation laid in Shanafelt. The issue in Shanafelt was whether a claimant “incurred” expenses if another insurer paid the claimant‘s bill. This Court explained that to “incur” means “tо become liable for,” and the plaintiff in Shanafelt was clearly liable for the medical bills that her health insurer paid—the reason why the plaintiff‘s health insurer paid the plaintiff‘s bill was because the plaintiff was liable for it. Shanafelt, 217 Mich App at 638. The issue in Bombalski was not whether a claimant “incurred” expenses that another insurer paid but the extent to which a claimant “incurs” expenses if another insurer satisfies the claimant‘s bill for less than the billed amount. Bombalski built off of Shanafelt‘s definition of “incur” and explained that “liable” means “[r]esponsible or answerable in law; legally obligated,” so an expense is “incurred” only to the extent that a claimant is responsible for paying it. Bombalski, 247 Mich App at 542-543. See also Farm Bureau Gen Ins v Blue Cross Blue Shield of Michigan, 314 Mich App 12, 22; 884 NW2d 853 (2015) (“When an insured has no legal responsibility for disputed medical costs, those expenses are not ‘incurred’ by the insured within the meaning of
Returning to the instant case, we agree with Farmers that Bombalski controls. Farmers submitted DMC‘s billing statements, which show that Taylor was charged $113,072.25 for services that DMC performed between December 5, 2019 to December 8, 2019. Those same billing statements reflect that DMC received a payment from Medicaid for $6,202.78 on January 17, 2020, after which DMC subtracted the remaining $106,869.47 balance from Taylor‘s bill, so she owed $0. This evidence established that Taylor‘s bill was satisfied for $6,202.78, and Taylor did not bear any responsibility for an amount in excess of that. Taylor‘s argument that she incurred the entire $113,072.25 charged by DMC, not just what Medicaid paid to satisfy her bill, runs directly counter to Bombalski‘s holding that “incurred charges” within the meaning of
Taylor insists that she remains liable for the entire amount charged by DMC because the Medicaid payment was not intended to satisfy Taylor‘s bill, but nothing in the record supports that assertion. That is, nothing in the record suggests that DMC is seeking to collect anything more from Taylor to satisfy her bill. The affidavit of DMC‘s billing specialist, Prevost, statеs that DMC charged Taylor $113,072.25 for services that DMC performed between December 5, 2019 to December 8, 2019; that DMC billed Medicaid and accepted Medicaid‘s payment for Taylor‘s treatment; and that “[w]hen and if payment is received from [Farmers], DMC will reimburse [Medicaid4] in the amount of $6,202.78.” Prevost‘s affidavit does not state that Taylor remains liable to DMC for any amount or that DMC plans to pursue Taylor for some unpaid amount оf her bill. This is presumably because, as Farmers’ evidence shows, Medicaid‘s payment satisfied DMC‘s bill, and Taylor no longer owes DMC anything.
In sum, the evidence submitted by the parties leads to one conclusion: that DMC accepted Medicaid‘s payment as satisfaction of Taylor‘s medical bill. Farmers submitted evidence showing that, after DMC accepted Medicaid‘s payment, DMC reduced the amount that Taylor was required to pay on her bill to $0. In response to this evidence, Taylor failed to submit evidence creating a question of fact whether Medicaid‘s payment to DMC satisfied Taylor‘s liability to DMC. Without evidence that Taylor remains liable to DMC for any amount in excess of what Medicaid paid, Farmers is correct that the only charges “incurred” by Taylor for services that DMC provided between December 5, 2019 to December 8, 2019 is the аmount paid by Medicaid. Farmers is therefore only responsible for paying that amount under
To be clear, we are not reaching the issue that the trial court reаched: whether it would hypothetically be legal for DMC to pursue additional recovery from Taylor after accepting Medicaid‘s payment. The trial court reasoned that DMC could not do so based on federal caselaw prohibiting “balance billing,” which occurs when a medical provider accepts payment from Medicaid, then seeks to recover from the patient the balance between the Medicaid payment and the provider‘s customary fee. See Spectrum Health Continuing Care Group v Anna Marie Bowling Irrecoverable Tr, 410 F3d 304, 314 (CA 6, 2005). That prohibition stems from
Instead of wading intо this potentially-thorny area, we hold only that, based on the record before us, there is no question of fact that DMC accepted Medicaid‘s payment as satisfying Taylor‘s bill, and nothing in the record suggests that DMC is pursuing or plans to pursue additional payment from Taylor.6 As this Court explained in Bombalski, “incurred charges” within the
We briefly address two other points raised by Taylor. First, Taylor observes that she does not qualify for Mediсaid because she has no-fault insurance. See Workman v Detroit Auto Inter-Ins Exch, 404 Mich 477, 501-502; 274 NW2d 373 (1979). Whether Taylor qualifies for Medicaid is irrelevant, however, because DMC accepted Medicaid‘s payment as full satisfaction of Taylor‘s bill, and nothing suggests that DMC is pursuing further collection from Taylor. Second, Taylor insists that there is a question of fact whether Medicaid‘s payment to DMC constitutes the reasonable and customary rate for DMC‘s services. But this, toо, is irrelevant because Taylor is not entitled to allowable expenses beyond the charges she incurred. See
IV. CONCLUSION
We hold that the trial court did not err by granting Farmers’ motion for partial summary disposition. As Farmers conceded in its motion for partial summary disposition and the trial court recognized at the start of the parties’ hearing, Farmers is clearly liable for the amount that Medicaid paid to satisfy Taylor‘s bill. And for the reasons explained in this opinion, based on the record evidence, there is no question of fact that Taylor did not “incur” allowable expenses beyond what Medicaid paid, and Farmers is only responsible for paying that amount at this time. We expressly decline to reach the issue of whether it would hypothetically be legal for DMC to collect additional payment from Taylor beyond what Mediсaid paid because there is no evidence that DMC has done that or is planning to do so in this case. We therefore affirm the trial court, but on different grounds.
/s/ Christopher P. Yates
/s/ Colleen A. O‘Brien
/s/ Kathleen A. Feeney