Michigan Court of Appeals Allows Plaintiff to Pursue Private Cause of Action against No-Fault Insure


In Holmes v. Farm Bureau Gen. Ins. Co., No. 320723, 2014 Mich. App. LEXIS 1031 (Mich. Ct. App. May 19, 2015), Holmes was injured in a motor vehicle accident. Her automobile insurance policy through Farm Bureau General Insurance (Farm Bureau) provided underinsured motorist coverage, including PIP coverage. Notably, however, Farm Bureau did not pay for Holmes’ medical treatment. Instead, the treatment was paid for by Medicare and Medicare AARP Supplemental Insurance. Holmes filed suit against Farm Bureau and argued that the Medicare Secondary Payer Act (MSPA) created a private cause of action for double damages where medical expenses were paid by Medicare that should have been paid by a primary payer- here, the no-fault insurer Farm Bureau. The Michigan Court of Appeals agreed.

The Court first looked to the language of the insurance policy itself, which established Farm Bureau’s responsibility to pay, and concluded that the policy language plainly indicated that Farm Bureau coverage was primary. The policy included language acknowledging that, as a matter of law, the parties could only contract for a policy which makes Medicare the secondary payer. The Court then turned to the MSPA and, finding the statutory language to be clear, held that a private cause of action exists that allows individuals to file suit against a primary payer for funds improperly paid by Medicare and double damages may be recovered.

We will continue to follow this case and will keep you informed of any developments as the parties proceed and litigate their case.

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