No Windfall Under PIP

In Bobalski v. Perri - Mich App - (2001), several of Plaintiff’s bones were broken when Mr. Perri’s car hit Plaintiff’s motorcycle. Plaintiff had coverage with Blue Cross & Blue Shield, and had an uncoordinated No Fault policy with Auto Owners Insurance Company.

All of Plaintiff’s medical bills were paid by Blue Cross, but Plaintiff’s medical providers accepted less than the full amount originally billed in satisfaction for Plaintiff’s treatment. Plaintiff and Auto Owners agreed that Auto Owners owed Plaintiff some PIP benefits pursuant to the uncoordinated policy, but they could not agree on the amount.

Plaintiff argued that the No Fault Act mandated coverage for "reasonable charges incurred" for treatment; therefore, amounts negotiated and paid for by Blue Cross were irrelevant and did not affect the amounts "incurred" by Plaintiff. Auto Owners argued that Plaintiff’s benefits were limited to the amounts that Plaintiff’s health care providers had accepted from Blue Cross as full payment for the health care services they provided. As the reasonableness of the care and the amount originally charged were not disputed, the Court of Appeals’ analysis focused on the statutory meaning of "incurred."

The Court of Appeals held that Blue Cross’ satisfaction of Plaintiff’s medical bills through payment of less than the amounts charged by the providers relieved Plaintiff of any legal obligation to pay anything more. "Because Plaintiff bears no liability for the full medical service amounts initially charged by his health care providers, he has not incurred these full charges." The Court concluded that PIP benefits did not include any amounts (1) exceeding those that Plaintiff’s health insurer actually paid in satisfaction of Plaintiff’s medical bills and (2) for which Plaintiff no longer bears legal responsibility.