• The Patient Holds the Power
• Analogy to Workers’ Compensation Law
• Ethical Considerations

1. The Patient Holds the Power

The no-fault law is silent regarding the involvement of case managers in the handling of no-fault PIP claims. Moreover, there are no reported Michigan appellate court decisions dealing with the use of case managers in the no-fault context. There is nothing, therefore, in either statute or case law that does any of the following: (1) authorizes a no-fault insurance company to insist on the use of case managers as a pre-condition to payment of benefits; (2) obligates a no-fault claimant to work with a case manager as a pre-condition to receiving no-fault benefits; or (3) requires a medical provider to deal with a case manager as a pre-condition to receiving payment for medical services rendered.

Even though there is no legal authority under the Michigan No-Fault Law regarding the use of case managers, some no-fault insurance companies are leading patients to believe that they must cooperate with a case manager selected by the insurance company or run the risk of jeopardizing their claim for PIP benefits. Insurers who create this impression are misleading patients regarding their rights and obligations under the Michigan no-fault law. More disturbing, however, is the fact that auto insurance companies are, with increasing frequency, using case managers as “gatekeepers,” through whom pre-authorization for treatment must be obtained. Insurance adjusters or case managers who represent that they have the authority to require pre-authorization in order for treatment to be compensable under the no-fault statute, are engaging in conduct that is illegal. In short, there is nothing in the Michigan no-fault statute or case law that authorizes a no-fault insurance company to require that medical treatment be pre-authorized by adjusters or case managers. Pre-authorization is simply not a part of the Michigan no-fault fee for services reparations system. Regardless of whether pre-authorization has been sought or given, Michigan no-fault insurance companies are legally obligated to pay for all “reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery or rehabilitation”. [See § 3107(1)(a)].

Given the clear language of the Michigan No-Fault Act, it is rather astonishing that insurance adjusters, and in certain circumstances, case managers, represent to patients and providers that medical treatment must be pre-authorized before it is compensable. In one recent case, the author obtained a copy of a letter from a no-fault insurance adjuster to a patient which contained the following statement:

“As stated, pre-certification for all testing, examinations, evaluations, or treatment modalities will be required by [X Insurance Company] for consideration of payment of benefits incurred referable to same. I want you to be clear in your understanding that your failure to obtain such pre-certification may jeopardize [X Insurance Company’s] further payment of your benefit claims. All such requests for pre-certification should be directed to my attention.”

The no-fault adjuster who wrote this letter has engaged in misrepresentation and possibly fraud. In fact, if the patient relied upon this completely inaccurate representation of Michigan law and decided to forego reasonably necessary medical treatment and, as a result, suffered a deterioration in medical condition, the adjuster who placed the patient in such jeopardy might be liable in tort pursuant to causes of action for misrepresentation, fraud, undue influence, etc. Patients and providers must understand that no-fault adjusters and case managers simply do not have legal authority to require pre-authorization for anything. If a medical or rehabilitation provider believes that certain services are “reasonably necessary” for the patient’s care, recovery or rehabilitation, then the provider should proceed to render those services and submit the bill to the no-fault insurance company for payment. The lack of pre-authorization, even when demanded by an insurance company is irrelevant under the language of the no-fault statute. If patients and providers are not aware of this fact, they will be intimidated or otherwise discouraged from seeking reasonably necessary products, services and accommodations that are legally compensable under the no-fault law.

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2. Analogy to Workers’ Compensation Law

Even though there are no Michigan appellate court cases that specifically address the use of case managers in the context of no-fault automobile insurance claims, there is an important decision that was rendered by the Michigan Court of Appeals regarding the selection and use of case managers in connection with workers’ compensation claims. The case is Dolenga v Aetna, 185 Mich App 620 (1990), wherein the Court of Appeals considered the relationship between a workers’ compensation insurer, a case manager appointed by that insurer, the patient’s treating physician, and a rehabilitation vendor recommended by the patient’s treating physician and approved by the patient. It appears that the rehabilitation vendor involved in this case was a company offering case management type services on behalf of injured workers. The worker’s physician referred the worker to this particular rehabilitation vendor for vocational rehabilitation services. When the case manager for the workers’ compensation insurer learned of this, she wrote a letter to the rehabilitation vendor advising the vendor that authority to work with the patient was being denied. The case manager also stated that the worker’s treating physician had no authority to make referrals for vocational rehabilitation and that the workers’ compensation insurer would make other arrangements for rehabilitation, presumably with a different vendor.

The Court of Appeals, in Dolenga, disapproved of unilateral insurer control over case managers and held that the worker should be the one who selects the rehabilitation vendor (case manager), with the workers’ compensation insurer retaining the right to petition the Workers’ Compensation Bureau for the resolution of any dispute regarding this process if the insurer objected. In this regard, the Court of Appeals stated in Dolenga:

“. . . While it is true that . . . an employee is entitled to receive rehabilitation services if necessary and, in fact, the employer may insist that the employee receive rehabilitation services, the fact that the act allows the employer or the employer’s insurance carrier to voluntarily offer to provide those services does not, as defendants seem to conclude, equate to the employer or carrier having the right to select the vendor of those services. Nothing in § 319 either explicitly or implicitly grants such a right to a workers’ compensation carrier. . . .

 

It does, however, seem reasonable to conclude that the person receiving the services, the claimant, should normally be the person who selects the vendor. If, at that point, the employer or carrier is dissatisfied with the employee’s choice of vendor, it can petition the bureau for a resolution of the dispute under MCL 418.319(2) . . . . Both defendant Aetna and defendant Shankin (the case manager) misapprehend the role and authority of the compensation carrier in providing these benefits. That role is to pay for the treatment, not provide it. Ultimately, since it is the claimant who receives the medical treatment or rehabilitation services, it ought normally to be the claimant who chooses the provider of those services, subject to the dispute resolution procedures under the act if the claimant’s choice is objectively unreasonable. Plaintiffs are correct to the extent that they point out that § 315 at least implicitly recognizes that it is the worker’s choice of whom to utilize for the providing of services, not that of the employer or carrier. . . .

 

For the above reasons, we conclude that neither an employer nor a compensation carrier has the right to unilaterally reject a claimant’s choice of a rehabilitation services vendor and insist upon its own choice by way of denying authorization to the vendor selected by the claimant and referring the claimant to the carrier’s own vendor.” [Dolenga at 623, 624]

Even though the Dolenga decision is a workers’ compensation case, Michigan appellate courts have indicated on previous occasions that Michigan judges are permitted to analogize to the workers’ compensation statute and applicable case law for guidance and assistance regarding issues dealing with the meaning and interpretation of the Michigan No-Fault Automobile Insurance Act. [See Visconti v DAIIE, 90 Mich App 477 (1979)]. Therefore, the Dolenga decision has relevance in the world of no-fault.

Specifically, the Dolenga decision is important for two reasons. First, it clearly suggests that the process of selecting a case manager is not something that should be controlled by the unilateral decision of a no-fault insurance company, particularly where the patient objects to the insurer’s selection. Therefore, if a patient agrees to case management but objects to the involvement of a particular case manager, the patient should have the right to require the selection of a different case manager. Second, if a patient can show that case management services are otherwise reasonably necessary under § 3107(1)(a) of the no-fault act, then the patient should have the legal right to hire his or her own case manager and submit the expenses of this case manager to the no-fault insurance company for payment as an “allowable expense” under this specific statutory section. The patient would have this right even if the no-fault insurance company unilaterally appointed a case manager of its own. Having already hired a case manager, a no-fault insurer would be hard pressed to disagree with the patient’s contention that case management services are “reasonably necessary.”

The conclusion that patients have the right to select and hire case managers and recover the costs is supported by the language of § 3107(1)(a) and the decisions in Dolenga, supra, and Morgan, supra. Further support for this proposition is suggested by the Court of Appeals decision in McKelvie v Auto Club, 208 Mich App 331 (1994). This is a no-fault case wherein the Court of Appeals upheld an award of penalty attorney fees for the failure of a no-fault insurer to pay for certain rehabilitation services that appeared to be in the nature of “case manager services” and which were provided by Professional Rehabilitation Associates, the same vendor involved in the Dolenga, supra case. Moreover, it should be remembered that Michigan appellate courts have, on several occasions, expressed the principle that the no-fault act “is remedial in nature and must be liberally construed in favor of persons intended to benefit thereby.” [See Reed v Citizens, 198 Mich App 443, 451 (1993)].

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3. Ethical Considerations

A review of relevant professional literature reveals that increasing attention is being paid to the ethical issues of case management. The literature recognizes that case managers hired by insurance companies have important obligations to patients that should transcend loyalty to the insurance company who hired the case manager. The Case Management Society of America (CMSA) promulgated “Standards of Practice for Case Management” in 1995. These standards contain numerous references to a case manager’s ethical obligations to the patient, regardless of who hired the case manager. For instance, at page 9 of the CMSA Standards, the following is stated:

“The case manager should represent the client’s interests by advocating necessary funding, appropriate treatment and treatment alternatives, timely coordination of health services, and frequent re-evaluation of progress and goals. Recognizing that client advocacy can conflict with a need to balance cost constraints and limited healthcare resources, the case manager should continuously self-evaluate his/her decisions with the intent to uphold client advocacy.”

Similarly, the CMSA Standards state at page 19:

“The case manager’s central focus is on the client and his/her family. Ideally, the case manager should advocate both for the client and for the payer to facilitate positive outcomes. However, when a conflict arises, the needs of the client must be the priority. The case manager will advocate for the client/family at the service-delivery level, the benefits-administration level, and at the policy-making level.”

Read as a whole, the CMSA Standards clearly indicate that the case manager’s primary responsibility and loyalty is to the patient. If the case manager has to choose between saving money for the insurance company or promoting and enhancing the care, treatment and rehabilitation of the patient, it is the patient’s interests that must control. This may mean that a case manager will have to recommend or advocate for a particular level of care and treatment that the insurance company does not believe is necessary or required. A case manager who places his or her own economic self-interest above that of the patient in this situation is not engaging in conduct that is consistent with the ethical standards embraced by the CMSA.

In 1996, the CMSA issued a “Statement Regarding Ethical Case Management Practices,” which further emphasizes the principle that the case manager’s primary role is to be the patient’s advocate. The Statement provides in pertinent part:

“Case management is guided by the principles of autonomy, beneficence, nonmaleficence, justice and veracity.

 

Autonomy is defined as ‘a form of personal liberty of action when the individual determines his or her own course in accordance with a plan chosen by himself or herself. (Beauchamp and Childress, 1979, pg. 56). This is the fundamental ethical principle of case management practice. The role of case manager as client advocate arises from a commitment to the concept of client autonomy. The needs of the client, as perceived by the client, are preeminent. Thus the client is primary relative to decision making. The case manager collaborates with the autonomous client with the goal of fostering and encouraging the client’s independence and self determination. This leads the case manager to educate and empower the client/family to promote growth and development of the individual and family so that self advocacy and self direction of care is achieved. This implies informing and supporting the client in their options and decisions related to their healthcare.”

The ethical constraints imposed upon case managers include, but are not limited to informing the client if the case manager has reason to believe that the client’s rights have been, or are about to be, violated or compromised. A case manager cannot ethically sit back and do nothing when he or she is aware that the insurance company has taken action that is, or may be, inconsistent with the insurer’s legal obligations under the Michigan No-Fault Statute. In this situation, the case manager has an ethical duty to inform the patient that the patient may need to assert and protect his or her rights under the Michigan No-Fault Act. In this regard, the CMSA Standards of Practice set forth certain obligations of the case manager with respect to the client’s legal rights. Regarding legal issues, the CMSA Standards state in pertinent part at page 18:

“The case manager will: . . . 3. Maintain current knowledge and understanding of applicable state and federal laws protecting the rights of the client and act in accordance with such laws . . . 6. Utilize appropriate and reliable resources for the resolution of legal or other relevant questions and issues. 7. Maintain current and appropriate knowledge and understanding concerning benefits and benefits administration that specifically pertain to case management services.”

Regarding ethical issues, the CMSA Standards further state, at page 19:

“The case manager will: . . . 2. Act as a client advocate to the end that information is provided to the client to make an informed health decision and promote informed consent. . . . 5. Utilize appropriate and reliable resources and consultation to help formulate ethical decisions. . . .”

The ethical obligation to advise a patient that a no-fault insurance company may be acting in violation of the patient’s legal rights, is an issue that appears more frequently than one would imagine. How many times has a case manager observed a situation where a catastrophically injured patient was entitled to more attendant care than the no-fault insurer was providing? How many times has a case manager seen replacement service expenses not claimed but clearly due and owing? How many times has a case manager noticed that a patient may be entitled to certain work loss benefits that were not properly calculated or taken into consideration? In these situations, if the case manager is properly discharging his or her ethical obligations under the CMSA Standards and other applicable ethical principles, the case manager should, as the advocate of the patient, inform the patient of the need to protect his or her legal rights. Many times case managers do exactly this. Other times, unfortunately, they do not.

In the case of Wynn v State Automobile Mutual Insurance Co, 856 F.Supp. 330 (1994), however, the United States District Court for the Eastern District of Michigan ruled that under the Michigan no-fault law, neither the automobile insurance policy nor Michigan no-fault law imposed a legal duty on the insurer or its agents to act as the insured’s advisor and inform the insured of benefits covered by the contract or the statute. The insurer’s agent in this case was a case manager who allegedly did not give proper advice to the patient regarding medical care and the patient did not receive the course of treatment recommended by the patient’s treating physicians. In holding that the insurance company and case manager do not have legal liability to the patient in this situation, the court noted that, “If medical experts recommended a course of treatment, plaintiff should have sought such treatment and then requested reimbursement from Mutual Insurance.” (See p. 335). The case did not, however, address whether the case manager had any ethical obligations to the patient in this situation or had any independent liability as a fiduciary. Moreover, the case is not a Michigan appellate case and therefore, has no precedential value.

Another disturbing ethical matter involves case managers who testify against their patients. In one recent case, the author observed a case manager testifying against her patient in a lawsuit filed by the patient against his no-fault insurance company seeking an increase in attendant care benefits. At trial, the insurance company called the case manager as its principal expert opinion witness to dispute the plaintiff’s claim that additional attendant care was required. Needless to say, the claimant was distressed to see his case manager take the witness stand at trial and give testimony that was in direct conflict with the patient’s claim. Case managers who solicit a patient’s trust and who then permit themselves to be used as hired expert opinion witnesses for insurance companies in litigation disputes involving the very patients whose interests they are obligated to advocate, are treading perilously close to engaging in conduct that is inconsistent with their professional ethical responsibilities. Case managers should, whenever possible, avoid these situations.

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