PIP REIMBURSEMENT; MODIFY S.B. 530 (S-4), 531 (S-2), & 575:
ANALYSIS AS PASSED BY THE SENATE
Senate Bill 530 (Substitute S-4 as passed by the Senate)
Senate Bill 531 (Substitute S-2 as passed by the Senate)
Senate Bill 575 (as passed by the Senate)
Sponsor: Senator Mary Cavanagh (S.B. 530)
Senator Sarah Anthony (S.B. 531)
Senator Jeremy Moss (S.B. 575)
Committee: Finance, Insurance, and Consumer Protection
Date Completed: 7-26-24
RATIONALE
Public Act (PA) 21 of 2019 significantly restructured the State's no-fault driver insurance
system. Previously, Michigan drivers were required to possess unlimited personal injury
protection (PIP) coverage. The PA introduced three additional PIP coverage levels that
Michigan drivers could choose from beginning July 1, 2020: 1) $50,000, if the person were
enrolled in Medicaid; 2) $250,000; and 3) $500,000. The PA also specified reimbursement
rates for Medicare and non-Medicare services. The legislation was meant to lower the cost of
auto insurance in the State.1
However, according to testimony before the Senate Committee on Finance, Insurance, and
Consumer Protection, PA 21 had unintended consequences. Some people claim that its
modifications to eligible medical expenses and reimbursement rates resulted in limited access
to care for auto accident survivors requiring specialized care and unsustainable
reimbursement for providers. Accordingly, it has been suggested that reimbursement
structures be modified to make these healthcare services accessible to auto accident survivors
with catastrophic injuries.
CONTENT
Senate Bill 530 (S-4) would amend Chapter 31 (Motor Vehicle Personal and Property
Protection) of the Insurance Code to do the following:
-- Modify how providers would be reimbursed for the treatment of an individual
covered by PIP for an accidental bodily injury.
-- Modify the percentages for which providers could be reimbursed for treating or
training an individual covered by PIP following an accidental bodily injury.
-- Specify the amounts that a provider would have to be reimbursed if Medicare did
not provide an amount payable for treatment or rehabilitation of an individual
covered by PIP for an accidental bodily injury.
-- Specify reimbursement amounts for caregivers and chiropractors for the
treatment of an individual covered by PIP for an accidental bodily injury.
-- Require the proposed reimbursement amounts to adjust annually at the rate of
the Consumer Price Index (CPI).
-- Require a provider that rendered home care or residential services to be
accredited to be eligible for reimbursement.
1
Gibbons, Lauren, "Michigan lawmakers eye tweaks to auto insurance reform that has cut rates", Bridge
Michigan, December 5, 2023.
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-- Specify how an insurer would have to pay benefits to a personal caregiver.
Senate Bill 531 (S-2) would amend the Insurance Code to modify Michigan Complied
Law (MCL) references to reflect changes proposed by Senate Bill 530 (S-4).
Senate Bill 575 would amend the Insurance Code to modify MCL references to reflect
the changes proposed in Senate Bill 530 (S-4).
Senate Bill 530 and Senate Bill 531 are tie-barred. Senate Bill 530 is described in greater
detail below.
Senate Bill 530 (S-4)
Generally, all drivers in the State must have PIP, and an insurer issuing PIP is liable for
accidental bodily injury involving a motor vehicle. These benefits under PIP are due regardless
of fault in the motor vehicle accident that caused the bodily injury. Among other things,
Chapter 31 prescribes the reimbursement rates discussed below, rates at which insurers
issuing PIP must pay providers for treatment of an injured person involved in a motor vehicle
accident and covered by PIP.
Reasonable Cost for Treatment
The Code allows a provider to charge a reasonable amount for providing treatment or
rehabilitative occupational training to an injured individual for accidental bodily injury covered
by PIP. The charge may not exceed the amount the provider customarily charges for similar
treatment or training in cases where insurance is not involved.
Reimbursement for Treatment or Training
Generally, a provider that treats or provides rehabilitative occupational training to an injured
person covered by PIP for an accidental bodily injury is not eligible for payment or
reimbursement for more than the following:
-- For treatment or training rendered after July 1, 2021, and before July 2, 2022, 200% of
the amount payable to the person for that treatment or training under Medicare.
-- For treatment or training rendered after July 1, 2022, and before July 2, 2023, 195% of
the amount payable to the person for that treatment or training under Medicare.
-- For treatment or training rendered after July 1, 2023, 190% of the amount payable to the
person for the treatment or training under Medicare.
The bill would sunset the latter provision on July 1, 2024. After that date, the bill would require
a provider to be reimbursed in an amount equal to 200% of the amount payable to the person
for the treatment or training under Medicare.
Currently, if Medicare does not provide an amount payable for a treatment or training
described above, the provider is not eligible for payment or reimbursement of more than the
applicable percentage of the amount payable for the treatment or training under the
individual's charge description master, 2 or, if there was no charge description master,
between 52.5% and 55% of the amount that was charged based on the date of treatment.
The bill would delete these reimbursement rates.
2
"Charge description master" means a uniform schedule of charges represented by the person as its
gross billed charge for a given service or item, regardless of payer type.
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After July 1, 2021, a provider who is a freestanding rehabilitation facility 3 or whose clientele
meets specified indigent standards established by the Department of Health and Human
Services (DHHS) that renders treatment or rehabilitative occupational training to an injured
person for accidental bodily injury covered by personal protection insurance is eligible for
payment or reimbursement of no more than the following:
-- For treatment or training rendered after July 1, 2021, and before July 2, 2022, 230% of
the amount payable to the person for the treatment under Medicare.
-- For treatment or training rendered after July 1, 2022, and before July 2, 2023, 225% of
the amount payable to the person for treatment or training under Medicare.
-- For treatment or training rendered after July 1, 2023, 220% of the amount payable to the
person for the treatment or training under Medicare.
The bill would sunset the latter provision on July 1, 2024. After that date, a provider who was
a freestanding rehabilitation facility or whose clientele met specified indigent standards
established by the DHHS that rendered treatment or training to an injured person for
accidental bodily injury covered by personal protection insurance would have to be reimbursed
in an amount equal to 230% of the amount payable to the person for the treatment or training
under Medicare.
Additionally, the bill would modify the indigent standards a provider is required to meet to
receive the reimbursement described above. Currently, on July 1 of the year in which the
provider renders treatment or training, the provider must have 20% or more, but less than
30%, indigent volume determined using the methodology also used by the DHHS in
determining inpatient medical/surgical factors used in measuring eligibility for Medicaid
disproportionate share payments. Under the bill, indigent volume would be calculated using
the three-year average of that methodology, which first would be calculated on July 1, 2024,
and every third year after.
Currently, the Director of the Department of Insurance and Financial Services (DIFS) must
annually review documents and information to determine whether a provider whose clientele
meets specified indigent standards qualifies for payment and reimbursement. The bill would
make this a triennial requirement.
If Medicare does not provide an amount payable for a treatment or training described above,
the provider is not eligible for payment or reimbursement of more than the applicable
percentage of the amount payable for the treatment or training under the individual's charge
description master or, if there were no charge description master, the provider will be
reimbursed between 66.58% and 70% of the amount that was charged for the service based
on the date of treatment. If Medicare does not provide an amount payable for a treatment or
training described above and the provider is a freestanding rehabilitation facility or has
clientele that meets specified indigent standards, the provider is not eligible for payment or
reimbursement of more 78% of the amount payable for the treatment or training under the
individual's charge description master or if the person did not have a charge description
master, 78% of the average amount based on the date. The bill deletes these reimbursement
rates.
3
A freestanding rehabilitation facility is an acute care hospital that was in existence on May 1, 2019,
and meets certain requirements. Among other things, a freestanding rehabilitation facility must assist
catastrophically injured patients to achieve excellent rehabilitation outcomes, possess sophisticated
technology and specialized facilities, participate in rehabilitation research and clinical education, and be
accredited by one or more third party, independent organizations focused on quality.
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The Code sets the following maximum payment levels for Level I and Level II trauma centers
providing emergency treatment to an injured individual covered by PIP before the individual
is stabilized and transferred:
-- For treatment rendered after July 1, 2021, and before July 2, 2022, 240% of the amount
payable to the hospital for the treatment under Medicare.
-- For treatment rendered after July 1, 2022, and before July 2, 2023, 235% of the amount
payable to the hospital for the treatment under Medicare.
-- For treatment rendered after July 1, 2023, 230% of the amount payable to the hospital
for the treatment under Medicare.
The bill would sunset the latter provision on July 1, 2024. For treatment or training rendered
after July 1, 2024, the bill would set the maximum payment level at 240% of the amount
payable to the person for the treatment or training under Medicare.
If Medicare does not provide an amount payable for a treatment or training described above
the provider is not eligible for payment or reimbursement of more the applicable percentage
of the amount payable for the treatment or training under the individual's charge description
master or, if there were no charge description master, the provider will be reimbursed
between 71% and 75% of the amount that was charged for the service, based on the date of
treatment. The bill deletes these reimbursement rates.
For any increase in an amount payable under Medicare that occurs after June 11, 2019, the
change must be applied to the amount allowed for payment or reimbursement. The bill would
delete a provision prohibiting the amount allowed from exceeding the average amount
charged by a provider on January 1, 2019.
Under the Code, for care rendered in an injured person's home, the insurer is only required
to pay benefits for attendant care up to certain hourly limitations. Additionally, the Code
specifies the eligibility requirements for the attendant care. The insurer may contract to pay
benefits for attendant care for more than the hourly limitation. The bill deletes these
provisions. It also deletes a provision which states that neurological rehabilitation clinics are
not entitled to payment or reimbursement for treatment, training, product, service, or
accommodation unless the clinic has certain accreditation.
Proposed Reimbursement Rates for Treatment or Training
Under the bill, if Medicare did not provide an amount payable for a treatment or rehabilitative
occupational training to an injured person for accidental bodily injury that occurred after June
10, 2019, and that individual was covered by PIP, the provider would have to be reimbursed
in the manner described below:
Service Metro Detroit Rest of State
HHA/CNA Supervision Level Services, using code S9122 $32.78/hour $32.92/hour
with modifier 01.
HHA/CNA Basic Care Level Services, using code S9122 $36.57/hour $34.97/hour
with modifier 02.
HHA/CNA High-Tech Care Level Services using code S $40.37/hour $38.60/hour
9122 with modifier 03.
Licensed Practical Nurse Home Health Care Level $77.50/hour $74.50/hour
Services, using code S9124.
Licensed Practical Nurse Home Health Care Level $181.15/visit $178.95/visit
Services, using code T1031.
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 Service Metro Detroit Rest of State
Registered Nurse Home Health Care Level Services, using $86.56/hour $82.76/hour
code S9123.
Registered Nurse Home Health Care Level Services, using $220.88/visit $211.19/visit
code T1030.
Residential Services Level 1, using code T2048 with $454.65/day $434.71/day
modifier 01.
Residential Services Level 2, using code T2048 with $599.62/day $573.32/day
modifier 02.
Residential Services Level 3, using code T2048 with $754.46/day $721.37/day
modifier 03.
Residential Services Bed Hold, using code T2048 with 55% daily rate per care level
modifier 04.
One-on-One Staffing: Aide Services, using code S5125. $9.66/15 $9.24/15
minutes minutes
Day Treatment: Half Day, using code H2001 with $216.77/day $207.26/day
modifier 01.
Day Treatment: Full Day, using code H2001 with modifier $433.96/day $414.93/day
02.
Day Treatment: 15 minutes, using code H2032. $18.36/15 $17.81/15
minutes minutes
Home- and Community-Based Therapies, using codes $82.23/15 $78.63/15
97535, 97110, 97530, 97537, 92507, 97129, or 97130, minutes minutes
with Place of Service codes 12 or 99.
In-Home Occupational Therapy, using code S9129. $269.55/visit $256.07/visit
In-Home Physical Therapy, using code S9131. $267.71/visit $254.32/visit
In-Home Speech Language Pathology, using code S9128. $291.00/visit $274.45/visit
Job Development/Job Placement, using code H2015. $45.03/15 $43.06/15
minutes minutes
Job Coaching, using code H2025. $21.44/15 $20.50/15
minutes minutes
Enclave Work Site – Group, using code H2023. $17.25/15 $16.49/15
minutes minutes
Case Management, using code T1016. $42.90/15 $41.01/15
minutes minutes
Pharmacy – Generic Drugs, Dispensing Fee, using an $6.36/ $6.53/
unidentified code. Prescription Prescription
Pharmacy – Generic Drugs, Drug Payment, using an 12% discount to average
unidentified code. wholesale price.
Pharmacy – Name Brand Drugs, Dispensing Fee, using an $4.05/prescription
unidentified code.
Pharmacy – Name Brand Drugs, Drug Payment, using an 12% discount to average
unidentified code. wholesale price.
Pharmacy – Custom Compounds, Dispensing Fee, using $14.45/prescription
an unidentified code.
Pharmacy – Custom Compounds, Drug Payment, using 12% discount to average
an unidentified code. wholesale price.
Pharmacy – Commercially Manufactured Topicals, $9.83/prescription
Dispensing Fee.
Nonemergency Medical Transport – Charge per Mile while $3.47/mile
Rider Is in the Vehicle, using code S0215,
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 Service Metro Detroit Rest of State
Nonemergency Medical Transport – Wheelchair Van $39.30/pick up
Pickup Fee – Weekday, using code A0130 with modifier
01.
Nonemergency Medical Transport – Nonwheelchair Van $36.61/pick up
Pickup Fee – Weekday, using code A0100 with modifier
01.
Nonemergency Medical Transport – Wheelchair Van $45.37/pick up
Pickup Fee – Weekend, using code A0130 with modifier
02.
Nonemergency Medical Transport – Nonwheelchair Van $40.46/pick up
Pickup Fee – Weekend, using code A0100 with modifier
02.
Nonemergency Medical Transport – Wait Time, using $8.45/15 minutes
code T2007.
These reimbursements also would apply to a service with a substantially similar code or
modifier.
Additionally, a personal caregiver who rendered home care services to an injured person for
accidental bodily injury that occurred after June 10, 2019, and was covered by PIP would
have to be reimbursed as follows:
Service Metro Detroit Rest of State
HHA/CNA Supervision Level Services. $19.67/hour $19.37/hour
HHA/CNA Basic Care Level Services. $