Michigan Legislators Leave Town Without Permanent Solution to Crisis of Care for Auto Accident Victims

Senate Bill 28 offers assistance that is too little and too late

BRIGHTON, Mich. – (June 30, 2021) — The Michigan Legislature today failed to pass meaningful legislation that would protect access to care for auto accident victims, and legislators are now leaving town for their summer vacations with the fate of survivors hanging in the balance.  

The only action taken was the Senate’s passing of Senate Bill 28, a bill that offers no solution for most survivors and unnecessarily utilizes taxpayer dollars for a problem created by a draconian government-mandated price fix, while other viable alternative approaches were ignored without even a hearing.

“Senate Bill 28 simply does not provide a viable solution—it’s as useful as throwing a 10-foot lifeline to a group of people 100 feet away being dragged further by the current,” said Tom Judd, president of the Michigan Brain Injury Provider Council. “The Legislature must commit to identifying a long-term fix and passing it when they return in the fall. MBIPC looks forward to being an active partner in this process. In the meantime, it will be a devastating summer for accident victims, as they scramble to find increasingly limited care options while providers continue to discharge patients that they can no longer adequately support.”    

Based on data from the Michigan Catastrophic Claims Association (MCCA), the reimbursement cap on specialized rehabilitation services without a Medicare code that goes into effect on July 1 will create a funding gap of at least $350 million every year for survivors of catastrophic auto accidents. Furthermore, instead of finding a long-term solution that reasonably utilizes the $23 billion in the MCCA, which every driver has paid into, the legislature is choosing to subsidize that fund with taxpayer dollars, with little to no meaningful result.

Meanwhile, any providers struggling to survive under the government-mandated 45% cut will need to wait months before they can access the fund, which creates onerous new bureaucratic layers before the state can make a determination whether a provider qualifies for assistance. SB 28 also institutes a $500,000 cap per provider, which severely limits the number of survivors who can be assisted by the fund. 

“This program laid out in Senate Bill 28 does not offer enough relief in a timely fashion, or to the degree necessary to give providers the ability to maintain payroll and operations,” Judd said. “The inevitable result is the imminent disruption of care and displacement of vulnerable accident survivors throughout Michigan. Therefore, MBIPC has no choice but to partner with accident survivors and their families in opposition to this program and urges the Legislature to pass a long-term solution that provides the relief and protection needed.” 

Already, post-acute providers are preparing to close down or discharge their auto insurance-funded patients in anticipation of the new reimbursement cap, in many cases leaving patients—including some of the most vulnerable and severely disabled residents in the state—with no viable place to go. According to data being collected by the MBIPC, the sudden loss of care risks displacing at least 678 patients this summer. Nearly 1,500 frontline healthcare heroes are expected to lose their jobs when caregiver businesses are forced to close or significantly downsize. These numbers will certainly escalate over the coming months.

This legislative session, four bills have been introduced that would provide the narrow, technical fix needed for a permanent solution to this small but vital aspect of the 2019 auto reforms: HB 4486, HB 4992, HB 5125 and SB 314. None, however, have been allowed hearings in the face of fierce lobbying from the auto insurance industry.