The Michigan Supreme Court refused to review an Appellate Court decision in the case of Sprague v. Farmers that clarifies the cost savings function of the state’s coordination of benefits provision. However, the Supreme Court sent the case back to the trial court for further factual determination.
Michigan’s personal injury protection (PIP) insurance laws allow consumers to coordinate their health or accident insurance with their auto insurance policy at a reduced premium. In the contested case, the plaintiff, Kate Sprague, had a coordinated benefits plan through her HMO and also had no-fault automobile insurance with Farmers Insurance Exchange. Sprague began treatment for injuries suffered in a car accident with a chiropractor and submitted the bills to her HMO.
The HMO declined coverage on the basis that no referral existed and because chiropractic services were not covered.
Sprague then submitted the chiropractor bills to Farmers Insurance Exchange, which also denied coverage, on the basis that she had not made a reasonable effort to obtain medical services from her HMO. The trial court ruled that Farmers Insurance Exchange was obligated to pay to the expenses.
The Appellate Court upheld this decision.
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