State regulator: Auto insurers can't push car accident victims into 'warehouse care' - Crain's Detroit Business

ACME — Michigan's top insurance regulator said Wednesday that auto insurers are required to help injured drivers find access to "appropriate" medical care and "not warehouse care," even as providers drop no-fault clients because of a new state law slashing their payment rates by 45 percent.

"We're not going to take for an answer like, 'Hey, sorry, we can't find a caregiver.' That is not an acceptable answer for the governor," said Anita Fox, director of the Michigan Department of Insurance and Financial Services (DIFS). "It's not acceptable answer for us. I don't think that's what the Legislature envisioned."

Auto insurance carriers that don't "make sure care is in place" for customers could be subject to penalties for not meeting the contractual obligations of their policies, Fox said.

"We consider this access to care for patients to be a primary focus right now, and we want to see every one of those patients get everything they're entitled to," Fox said.

Fox spoke Wednesday morning on stage at the Michigan Association of Health Plans' annual conference at the Grand Traverse Resort near Traverse City.

Fox's comments mark one of the strongest consumer-focused messages yet from Gov. Gretchen Whitmer's administration about how insurance regulators intend to police implementation of the new payment structure.

Michigan's 2019 auto insurance reform law included first-of-its-kind caps on payments insurers make on claims from medical providers that care for catastrophically injured motorists.

The new law, which went into effect July 1, capped rates for home health care agencies at 55 percent of what they charged on Jan. 1, 2019.

Advocates for injured drivers argued the 45 percent cut in payments to providers is so deep that a segment of the health care sector built upon the once limitless medical benefits of auto insurance may go out of business, leaving high acuity injured motorists with few options for care short of a nursing home.

Among her questions for auto insurers, Fox said she wants them to show the department, "What is the plan to make sure it's appropriate care, not warehouse care?"

"You promised a certain level of care to these patients," Fox said. "And if they're not getting that, then that's something where we need to go to the Legislature and say we have documented cases where we've done everything that we can to get these people appropriate care."

An unknown number of home health care agencies have dropped patients with auto insurance since July 1, forcing the injured drivers to either pay for attendant care out of pocket, get family and friends to help them with their in-home care or move into nursing or assisted living facilities, according to case managers interviewed by Crain's.

"Our case managers are on the phone constantly because our clients are so scared — they know if they lose care they're going to end up in a nursing home," said Joyce Mauk, owner of Wellspring Case Management in Plymouth. "We're spending an enormous amount of time searching for home care."

Wellspring Case Management has about 250 auto accident survivors who mostly have some form of paralysis and require round-the-clock care, Mauk said.

Mauk said two of her company's clients who moved into nursing homes because their home health care companies quit due to the new payment rates have since died.

Though the exact circumstances of those deaths are not entirely clear, Mauk said, the two patients were not in failing health before the new law went into effect July 1.

A third client of Wellspring Case Management is in a hospital intensive care unit after losing his in-home caregivers, Mauk said.

"All of a sudden, we have two dead clients and one in the ICU — all since July 1," Mauk told Crain's on Wednesday.

At the MAHP conference, Fox said the insurance department is hearing "anecdotal stories like that."

"These cases are very individualized," Fox said. "So when I hear somebody died because of the change in care, we certainly never want that to happen."

Fox said the new law's 56 hours per week limitation on in-home attendant care by family members and friends does not let insurers off the hook for additional hours of care. Insurers are required to either contract for additional hours with a home health care agency or with the injured driver's family and friends, Fox said.

"If you have medically appropriate care 24-7, you're still entitled to that," Fox said.