Centria Home Rehabilitation, LLC v. Philadelphia Indemnity Insurance Company

Summary

The Michigan Court of Appeals held that a healthcare provider acting as an assignee of an insured’s rights, or pursuing a direct action under MCL 500.3112, may sue an insurer to recover the difference between billed and paid PIP benefits when the reasonableness of the charges is disputed. The court distinguished prior cases involving insureds who had not suffered actual damages and adopted persuasive reasoning from an unpublished decision concerning assignments of PIP-benefit rights. It reversed summary disposition, vacated case-evaluation sanctions, and remanded for further proceedings.

Holdings

1. When a healthcare provider acts under an assignment of rights from an insured and seeks to recover the balance due for PIP benefits while the reasonableness of the charges is disputed, the provider has standing to sue the insurer directly.
2. A healthcare provider may sue an insurer directly under MCL 500.3112 to recover overdue PIP benefits for services provided after June 11, 2019, the effective date of the amendment creating that cause of action.
3. Summary disposition was improper because a genuine dispute existed regarding whether Philadelphia Indemnity's partial payments were reasonable, and the trial court had made no finding resolving that issue.
4. The order awarding case evaluation sanctions had to be vacated because reversal eliminated the judgment that had supplied the relevant verdict for purposes of the sanctions analysis.
5. The fraud argument did not warrant affirmance on summary disposition; the one-year-back issue was moot because Centria disclaimed claims for services rendered before March 2, 2019; and MCL 500.3143 did not bar claims for services provided after June 11, 2019 because those claims could proceed under MCL 500.3112 without an assignment.

Questions Presented

1. Whether a healthcare provider acting as an assignee of an insured's rights may sue an insurer directly for the difference between the provider's billed charges and the insurer's partial payment when the reasonableness of the charges is disputed.
2. Whether a healthcare provider may bring the same claim directly under MCL 500.3112 for services provided after the effective date of the statutory amendment.
3. Whether the trial court properly granted summary disposition when the reasonableness of the insurer's payments had not been resolved.
4. Whether the order awarding case evaluation sanctions could stand after reversal of the summary-disposition judgment.
5. Whether the one-year-back rule barred the claims and whether MCL 500.3143 barred claims for services provided after the assignment date.

Disposition

reversed_and_remanded