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Michigan Supreme Court gives Guidance on Setting Rate for Attendant Care by Individual Caregiver

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Joseph E. Kozely, Jr.
Foster Swift No-Fault E-News
August 9, 2012

The Michigan No-Fault Insurance Act, MCL 500.3101, et seq., provides that an injured person is entitled to PIP benefits for “allowable expenses,” including attendant care.  Some claimants have argued that family members who provide attendant care should be paid at the rates charged by caregiving agencies for such services.  In Douglas v Allstate Insurance Co., No. 143503, by a 4-3 vote, the Michigan Supreme Court disallowed that approach.

This case is important because it clarifies how reasonable charges for attendant care are to be established and proved.

In Douglas, the claimant’s wife provided attendant care. The trial court approved payment at $40 per hour, based on the rate that a caregiving agency would have charged, and the Court of Appeals affirmed.  The Michigan Supreme Court vacated the award for attendant care and remanded the case for a determination of an appropriate rate:

If the fact-finder concludes that a plaintiff incurred allowable expenses in receiving care from a family member, the fact-finder must also determine to what extent any claimed expense is a “reasonable charge.” While it is appropriate for the fact-finder to consider hourly rates charged by individual caregivers when selling their services (whether to their employers that commercially provide those services or directly to injured persons), comparison of hourly rates charged by commercial caregiving agencies is far too attenuated from an individual’s charge for the fact-finder to simply adopt that agency charge as an individual’s reasonable charge.

Slip Opinion, p. 3

The Supreme Court also reinforced the statutory requirement that “allowable expenses” must actually be incurred and that courts must see proof that the expense was incurred. While recognizing that the statute does not establish a particular method of establishing entitlement to allowable expenses, the Court stated:

The requirement of proof is not extinguished simply because a family member, rather than a commercial health care provider, acts as a claimant’s caregiver.  . . .  Any insured who incurs charges for services must present proof of those charges in order to establish, by a preponderance of the evidence, that he is entitled to PIP benefits.

*  *  * 

This evidentiary requirement is most easily satisfied when an insured or a caregiver submits itemized statements, bills, contracts, or logs...

Slip Opinion, pp 24-25.