The Michigan Supreme Court issued a new ruling on August 1, 2010, that will help protect the rights of the most vulnerable Michigan citizen’s when they are injured in an automobile accident. There are a number of benefits provided to anyone who is injured in an automobile accident in Michigan, medical expenses can be the most costly. This ruling will also help the state collect hundreds of thousands, if not millions, of dollars from auto insurance companies who have wrongfully stuck the Michigan taxpayers with unpaid medical bills, among many other expenses.
At issue in U of M Regents v Titan Ins (pdf) was whether the state of Michigan could collect payment for medical expenses that occurred more than one year before a lawsuit was filed. Generally speaking, any person injured in an automobile accident has one year to have their medical expenses paid for by the proper auto insurance company, and if the bill is not paid within one year from when the treatment or bill was received, then it’s the responsibility of the person who is billed. This is what’s known as the ‘one year back’ rule, and it has resulted in many Michigan residents being stuck paying medical bills and other expenses that should have been the responsibility of the auto insurance company. This included state agencies or state run hospitals who had medical bills or other expenses for patients injured in automobile accidents.
The University of Michigan hospital, as a state run hospital, filed a lawsuit to collect payment for medical expenses, some of which were incurred more than one year before the lawsuit was filed. The hospital argued it was not bound by the ‘one year back’ rule under Michigan law MCL 600.5821(4), which says all Michigan governmental agencies “are not subject to the statute of limitations and may be brought at any time without limitation.” Both lower courts decided against the University of Michigan based upon the previous legal decisions and decided the University of Michigan could not collect payments for medical treatment incurred more than one year before the lawsuit was filed.
The Supreme court reversed the lower courts’ decisions and held MCL 600.5821(4) allowed the state to collect medical payments more than one year before a lawsuit was filed. In addition, the Supreme court also overruled the ‘one year back’ rule as it was applied to minors and legally incompetent persons who had medical expenses and other claims which were older than one year from the date a lawsuit was filed. This part of the decision was based upon MCL 600.5851(1) which preserves the right for minors and legally incompetent people to bring claims until one year after the disability is removed. For minors, that would be their 19th birthday; for legally incompetent people it would be one year after they are no longer legally incompetent.
This decision represents a restoration of fairness to the legal proceedings for the collection of unpaid medical expenses and other claims allowable to an injured person following a car accident. The prior legal landscape allowed insurance companies to skirt responsibility for medical expenses and other claims they are obligated to pay, simply because the person who was injured and required the treatment was not capable of protecting their rights due to their age or mental capacity. As for state agencies, the citizens of Michigan have been footing the bill for auto insurance companies for too long and this ruling makes it clear the insurance industry is accountable under Michigan law.