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Michigan Auto No-Fault Reform: Significant
Changes to Final Utilization Review Rules
Michigan’s 2019 Auto No-Fault Reform legislation established a new “utilization review” system for evaluating claims for treatment, products, services or accommodations rendered by health care providers to individuals injured in auto accidents. “Utilization review” means the initial evaluation by an insurer of the appro- priateness of the level and the quality of treatment, products, services, or accommodations provided based on medically accepted standards.
As part of the introduction of this new system, the Auto No-Fault Reform legislation required the Michigan Department of Insurance and Financial Services (the “Department”) to issue administrative rules to establish criteria or standards for utilization review that identify utilization of treatment, products, services or accommo- dations above the usual range of utilization for the treatment, products, services or accommodations based on medically accepted standards. The administrative rules are also required to provide procedures related to: utilization review, including procedures for acquiring necessary records, medical bills, and other information concerning the treatment, products, services, or accom- modations provided; allowing an insurer to request an explanation for and requiring a physician, hospital, clinic, or other person to explain the necessity or indication for treatment, products, services, or accom- modations provided; and appealing determinations. By rendering any treatment, products, services, or accom- modations to injured persons subject to the No-Fault Act, a health care provider agrees to submit necessary records and other information concerning treatment, products, services, or accommodations provided for utilization review and to comply with any decision of the Department.
On December 16, 2019, the Department issued its proposed Utilization Review rules (the “Initial Rules”).
The Initial Rules proposed documentation standards and dispute resolution
requirements which concerned many stakeholders, including health care providers, as unreasonable and unduly burdensome. Following comments by providers, the public and other stakeholders, as well as a public hearing, on March 5, 2020, the Department issued a significantly scaled-back version of the draft Utilization Review rules, which were further revised by the Depart- ment following its receipt of additional public comments and a public hearing in April 2020 (the “Final Rules”).
The Final Rules were submitted to the Michigan Joint Committee on Administrative Rules, a legislative com- mittee comprised of members from the Michigan House of Representatives and Michigan Senate (“JCAR”) for consideration on July 21, 2020. Under the Administrative Procedures Act, JCAR has 15 session days (approximately late September 2020) to consider the Final Rules and either approve, object, or take other action regarding the Final Rules. If JCAR does not object or take other action that would impair the promulgation of the Final Rules, the Final Rules will become effective immediately upon being filed with the Michigan Secretary of State unless a later date is indicated in the Final Rules.
This article furnishes an overview of the Final Rules currently under consideration by JCAR.
Application of Final Rules
The Final Rules, if enacted, will apply to treatment, training, products, services, and accommodations provided after July 1, 2020 to an injured person who is insured under a No-Fault automobile insurance policy issued under the No-Fault Act. The Final Rules will also apply to (1) all “providers,” including physicians, hospi- tals, clinics or other persons providing treatment, training, products, services and accommodations to a person injured in an automobile accident subject to the No-Fault Act, (2) all insurers providing personal protec- tion insurance under the No-Fault Act, and (3) the Michigan Catastrophic Claims Association (“MCCA”).
Insurer Requests for Provider Explanations
If a provider provides treatment, training, products, services or accommodations to a person injured in an auto accident that are not usually associated with, are

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