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by Richard D. Weber, J.D.
MDA Legal Counsel
Published in the January 2000 issue of the Journal

Question: I have had a continuing dispute with a major no-fault auto insurance carrier. My patient was involved in a serious auto accident and the no-fault insurer has employed a case manager who has attempted to affect my dental care through treatment plans.

Also, the no-fault insurer has not paid my total fees billed, and has refused to pay for preparing a report and copying expenses for dental records I have been required to furnish the insurer.

Does an automobile insurance company have such dictatorial rights? What rights do I and my patient have? Please explain.

Answer: The Michigan No-Fault Law is not a managed care system. It is a fee-for-service system and the no-fault insurer has the statutory requirement to pay "all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation . . ." The statute does not give the insurance company any authority to apply principles of managed care, such as pre-authorization and the use of a case manager to affect dental care.

Automobile insurers in Michigan are governed by the No-Fault Statute, and dentists do not participate by contract with the insurer, as may be the case with health care plans. Health care plans often commit dentists to managed care requirements. Since this is not the case with automobile insurance, no restrictions should be placed by the insurer on dentists or patients relative to dental treatment.

With respect to reimbursement, the No-Fault Statute clearly provides that all reasonable dental fees incurred for reasonably necessary services must be paid. The fee must not exceed the amount customarily charged for like services in cases not involving insurance. The problem is that the insurer unilaterally determines what is "reasonable." If the insurer determines that the fee is not reasonable, the dentist has no direct claim against the insurer for the additional amount, for the reason that there is no contractual relationship between the dentist and the insurer. The dentist's only recourse is to balance bill and pursue collection against the patient.

Although some no-fault insurers have written dentists advising that the dentist has no legal right to balance bill and pursue collection, that advice is incorrect. It is true that a ruling by the insurance commissioner mandates no-fault insurers to defend and indemnify the insured patient in the event a health professional pursues collection against the insured patient. This means that the insurer provides legal counsel and covers the costs to defend any claim, and will pay any amount that is judged against the insured patient. The dentist is obviously left in a difficult position of having to pursue litigation against the patient to prove that the fee was reasonable, though the real defendant is the insurance company.

Based upon the statutory mandate, it is equally clear that no-fault insurers must also pay for all reasonable charges for necessary dental reports and copying expenses. Although insurers sometimes refuse to pay such charges, this position is not supported by the No-Fault Statute.

Failure or refusal to pay a dentist as required under the No-Fault Statute within 30 days after reasonable proof subjects the insurer to an interest penalty and may, in addition, make the insurer liable for attorney fees if such failure or refusal to make timely payment is determined to be unreasonable. Under the No-Fault Statute, overdue payment bears interest at the rate of 12 percent per annum.

Although dentists have had disputes over dental treatment and reimbursement under the No-Fault Statute, dentists, patients and carriers should be reminded that the statutory scheme is a fee- for-service system and not a managed care system. Therefore, the insurer has no authority to impose managed care requirements on the dentist-patient relationship. The insurer's only statutory authority and obligation is to reimburse dentists for all reasonable charges incurred for reasonably necessary services.

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