Michigan No-Fault Auto Insurance Reform

New medical billing limits

Most of the Michigan no-fault auto insurance reform law took effect on July 2, 2020. This page explains the new limits on medical billing that will roll out in July 2021. 

There will be new medical billing limits? Tell me more.

Health care in the United States has gotten more and more expensive, but medical claims from auto accidents are especially prone to price inflation. One study in Michigan found that while auto insurers sometimes paid more than $3,000 for a patient’s MRI, Medicare typically paid less than $500 for the exact same service.

That’s partly because right now Michigan law requires insurers to pay whatever is “reasonably necessary” to treat accident victims. Disputes over what’s covered and how much it’ll cost often land in court, which further balloons the cost of insurance for all drivers.

On July 2, 2021, Michigan will institute a new medical fee schedule to cap how much insurance carriers are required to pay for medical services and treatments.

The limits will phase in starting at 200 to 250 percent of what Medicare would pay for a medical procedure. The reimbursement rate will drop to 190 to 230 percent, depending on the type of medical facility, by 2023.

Lawmakers believe this will rein in a major contributor to Michigan’s high insurance costs, but remember, that fee schedule doesn’t kick in until 2021, a year after the rest of the law goes into effect.

Is there anything I have to do relative to this part of the new law?

Nope. There’s nothing you need to do.


I still have questions. Who can help?

We can! Please reach out to your agent with any questions.

If you have a friend or family member who could also use some help, we’re here for them too. Have them give us a call at 877.381.3570 or let us know so we can get in touch.