Michigan News: Auto No-Fault Court of Appeals Decision on Home Care Reimbursement

​​A recent decision from the Michigan Court of Appeals provides important clarification regarding how reimbursement caps apply to home care services under the state’s amended auto no-fault law.
 
While the ruling does not resolve every reimbursement dispute, it answers a key legal question that has shaped provider and insurer litigation since the 2019 reform.

Background: Michigan’s 2019 auto no-fault reform
For decades, Michigan’s no-fault system provided unlimited lifetime personal injury protection (PIP) benefits for individuals injured in automobile accidents. Providers were reimbursed for “all reasonable charges” for medically necessary care, and disputes centered largely on whether a charge was reasonable.

In 2019, Michigan enacted sweeping reforms intended to reduce auto insurance premiums. Among other changes, the law:

• Introduced tiered PIP coverage options
• Established statutory reimbursement caps
• Created a new fee schedule structure tied either to Medicare rates or to a provider’s 2019 average charges

Under MCL 500.3157, reimbursement for post-reform services depends on whether Medicare has an “amount payable” for the service in question:

• If Medicare has an amount payable → reimbursement is capped at a percentage of Medicare (currently indexed to approximately 190%).
• If Medicare does not have an amount payable → reimbursement is capped at a percentage of the provider’s 2019 average charge.

Since 2019, a central dispute has been which subsection applies to home health aide and skilled nursing services.
 
The court’s decision
 In West Michigan Home Care Services, Inc. v. Meemic Insurance Company (October 20, 2025), the Michigan Court of Appeals addressed whether Medicare has an “amount payable” for home health aide and skilled nursing services.
 
The insurer argued that because Medicare often uses a prospective or bundled payment system, there is no discrete billable “amount payable” for these services, meaning the lower 2019 charge-based cap should apply.
 
The Court rejected that argument. The Court held that:

• Medicare covers both home-health-aide and skilled-nursing services.
• Medicare’s payment methodology (prospective vs. fee-for-service) does not determine whether an “amount payable” exists.

 
Therefore, MCL 500.3157(2), the Medicare-based reimbursement cap, applies.
 
Because the opinion is published and no appeal was filed, it is now binding statewide precedent. This interpretation will govern reimbursement under the current statute unless the legislature amends the law.
 
What the decision does and does not do
 What it does:

• Clarifies that the Medicare-based reimbursement cap governs covered home care services.
• Resolves a key statutory interpretation dispute that has been litigated across multiple cases.
• Provides binding appellate guidance for lower courts.

 
What it does not do:

• Set specific hourly reimbursement rates.
• Order insurers to pay a particular amount in all cases.
• Determine whether a provider’s charges are reasonable.
• Eliminate ongoing factual disputes about payment calculations.

 
In other words, the court determined which statutory framework applies, not the final reimbursement amount owed in every situation.
 
Considerations for home care providers
Under MCL 500.3157, reimbursement is limited to charges that are reasonable and for services that are reasonably necessary, subject to the applicable cap.
 
Because the Court determined that subsection (2) applies, reimbursement for covered home health aide and skilled nursing services is now governed by the Medicare-based framework set forth in the statute, rather than the 2019 charge-based limitation.
 
Importantly, the statute establishes a ceiling, not a guaranteed payment amount. Actual reimbursement remains dependent on:

• Whether the services are reasonably necessary,
• Whether the provider’s charges are determined to be reasonable, and
• How the Medicare-based cap is calculated and applied in individual cases.

 
As insurers and providers implement the decision, reimbursement disputes may still arise. Some providers are continuing to litigate rates on a case-by-case basis to resolve disagreements regarding reasonable charges.
 
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