Recent Article: Raed L. Abboo, Farmington Hills

Michigan Supreme Court Finds That Providers Do Not Have a Direct Cause of Action Under the No-Fault Act in Landmark Covenant Decision

By: Raed L. Abboo, Esq.

After months of suspense, the Michigan Supreme Court has finally issued its long awaited decision in the matter of Covenant Medical Center, Inc. v. State Farm Mutual Automobile Insurance Company. Covenant v. State Farm, ___ Mich ___, ___NW2d ___, Docket No. 152758 (May 25, 2017). The opinion was written by Justice Zahra, who was joined by Chief Justice Markman, and Justices McCormack, Viviano, and Larsen in deciding the case.

The Covenant case involved the significant issue and question of whether a healthcare provider such as a hospital, physical therapist, or MRI Center, holds a direct cause of action against a No-Fault insurer to recover alleged outstanding personal protection insurance benefits incurred by an underlying claimant under the Michigan No-Fault Act (MCL 500.3101 et seq). The Court held that “[a] thorough review of the statutory No-Fault scheme reveals no support for an independent action by a healthcare provider against a No-Fault insurer.” Essentially, the Court decided that a healthcare provider does not have a direct cause of action to sue a No-Fault insurer for its outstanding bill in Michigan. Rather, the Court stated that a provider may sue the underlying claimant and discussed other possibilities.  READ FULL ARTICLE HERE