ACME – Michigan’s premier insurance regulator said Wednesday that auto insurers must help injured drivers access “adequate” medical care and “non-warehouse maintenance” even when vendors are dropping flawless customers because a new state law has cut their payment rates by 45 Percent.

“We’re not going to take an answer like ‘Hey sorry, we can’t find a nurse’.” That’s not an acceptable answer for the governor, “said Anita Fox, director of the Michigan Department of Insurance and Financial Services (DIFS). “It’s not an acceptable answer for us. I don’t think the legislature imagined it that way.”

Auto insurance carriers who fail to ensure customers are taken care of could face penalties for failing to meet the contractual obligations of their policies, Fox said.

“We consider this access to patient care to be a major focus right now, and we want each of these patients to get what they are entitled to,” said Fox.

Fox spoke on the stage of the Michigan Association of Health Plans annual conference at the Grand Traverse Resort, near Traverse City, Wednesday morning.

Fox’s comments are one of the strongest consumer-facing messages from Governor Gretchen Whitmer’s administration about how insurance regulators intend to oversee the implementation of the new payments structure.

Michigan’s 2019 Auto Insurance Reform Act first included caps on payments insurers make on claims made by medical providers who care for catastrophically injured motorists.

The new law, which went into effect July 1, limited home nursing fees to 55 percent of what they charged on January 1, 2019.

Injured driver attorneys argued that the 45 percent cut in payments to providers is so deep that a segment of the healthcare sector built on the once limitless medical benefits of auto insurance may go out of business and only drive high-risk drivers have few care options shortly before a nursing home.

Among her questions to auto insurers, Fox said she wanted them to show the department, “What is the plan to make sure it is proper maintenance and not warehouse maintenance?”

“You promised these patients a certain amount of care,” said Fox. “And if they don’t get that, then we have to go to the legislature and say that we have documented cases where we have done everything in our power to provide these people with adequate care.”

An unknown number of home health officials have laid off patients with car insurance since July 1, forcing injured drivers to either pay for care out of their own pocket, ask family and friends to help them with home care, or move into care or assisted living facilities, according to case managers surveyed by Crain’s.

“Our case managers are on the phone all the time because our clients are so scared – they know they’ll end up in a nursing home if they lose care,” said Joyce Mauk, owner of Wellspring Case Management in Plymouth. “We spend an enormous amount of time looking for home care.”

Wellspring Case Management has about 250 car accident survivors, most of whom have some form of paralysis and need around-the-clock care, Mauk said.

Mauk said that two of her company’s customers who moved into nursing homes because their home care businesses gave up due to the new payment rates have since died.

Although the exact circumstances of these deaths are not entirely clear, Mauk said, the two patients were not in poor health prior to the new law going into effect on July 1.

A third Wellspring Case Management customer is in a hospital intensive care unit after losing their caregivers, Mauk said.

“Suddenly we have two dead clients and one in the intensive care unit – everything since July 1st,” Mauk told Crain on Wednesday.

At the MAHP conference, Fox said the insurance department heard “such anecdotal stories”.

“These cases are very individual,” said Fox. “So when I hear that someone has died because of the change in care, we definitely don’t want that.”

Fox said the 56 hours per week limit on home care by family and friends under the new law does not exempt insurers from additional hours of care. Insurers will either have to purchase additional hours with a home care agency or with the injured driver’s family and friends, Fox said.

“If you have adequate medical care around the clock, you are still entitled to it,” Fox said.