The Michigan Supreme Court issued a decision July 3, 2025, in *C-Spine Orthopedics, PLLC v. Progressive Michigan Insurance Company*, a case that addresses fundamental questions about medical providers' rights under Michigan's no-fault insurance system. The court consolidated multiple cases, including *Wallace v. Suburban Mobility Authority for Regional Transportation*, to examine how recent legislative changes affect healthcare payment disputes.
The case originated when C-Spine Orthopedics, PLLC, filed two actions in Macomb Circuit Court against Progressive Michigan Insurance Company. The medical practice sought to recover personal protection insurance benefits under Michigan's no-fault act for care provided to Progressive's insureds, Jose Cruz-Muniz and Sandra Cruz, who sustained injuries in a 2018 motor vehicle collision.
Central to the case is the assignment of rights mechanism that allows medical providers to pursue insurance claims directly. Jose and Sandra Cruz assigned their rights to seek PIP benefits from Progressive to C-Spine Orthopedics. This enabled the medical practice to initiate first-party no-fault actions under MCL 500.3112, as amended by 2019 PA 21, which granted medical providers a direct cause of action to claim benefits under the no-fault act.
The 2019 amendments to Michigan's no-fault insurance law represented a significant shift in how medical providers can pursue payment for services rendered to auto accident victims. Prior to these changes, healthcare facilities often faced challenges in collecting payment directly from insurance companies, frequently relying on patients to pursue claims and then pay medical bills.
However, the case presents complex factual circumstances that may affect the outcome. Before bringing the legal actions, C-Spine had entered into agreements with several factoring companies. These financial arrangements typically involve medical providers selling their accounts receivable to third parties for immediate cash flow, which can complicate questions of standing and ownership of claims.
The factoring company arrangements raise important questions about who has the right to pursue insurance claims when medical providers have transferred their financial interests in patient accounts. Courts must determine whether such assignments affect the provider's ability to maintain direct actions against insurance companies under the 2019 amendments.
Progressive Michigan Insurance Company's position in the litigation reflects broader industry concerns about the expanded rights granted to medical providers under the amended no-fault act. Insurance companies have argued that the changes could lead to increased litigation and higher costs, ultimately affecting premium prices for Michigan drivers.
The Michigan Supreme Court's consideration of these consolidated cases signals the importance of clarifying how the 2019 amendments interact with existing business practices in the medical and insurance industries. The court heard oral arguments on November 13, 2024, on applications for leave to appeal, indicating that lower courts had issued conflicting or unclear rulings that required high court review.
Michigan's no-fault insurance system, established under MCL 500.3101 et seq., requires drivers to carry personal protection insurance that covers medical expenses, wage loss, and other benefits regardless of fault in an accident. The system was designed to provide prompt payment for accident victims while reducing litigation over fault determinations.
The 2019 legislative amendments aimed to address concerns that medical providers were having difficulty collecting payment for services under the no-fault system. By granting direct causes of action, lawmakers intended to streamline the payment process and ensure that healthcare facilities could recover costs for treating accident victims.
The Supreme Court's decision will likely have far-reaching implications for how medical providers, insurance companies, and factoring companies structure their relationships and pursue claims under Michigan's no-fault system. Healthcare facilities across the state have been closely watching the case to understand their rights and obligations under the amended law.
The consolidated nature of the cases, including the companion matter involving the Suburban Mobility Authority for Regional Transportation, suggests that the court is addressing systemic issues that affect multiple types of defendants and claims scenarios under the no-fault act.
For medical providers, the decision will clarify whether factoring arrangements affect their ability to pursue direct actions against insurance companies. For insurance companies, the ruling will establish parameters for their obligations when medical providers have assigned or factored their claims.
The timing of the decision, coming more than five years after the 2019 amendments took effect, reflects the complex litigation that has emerged as parties have tested the boundaries of the new legal framework. The Supreme Court's ruling will provide guidance for lower courts handling similar disputes and help establish consistent interpretation of the amended no-fault act.
As Michigan continues to refine its no-fault insurance system, this decision represents an important step in balancing the interests of medical providers, insurance companies, and accident victims in ensuring timely and appropriate payment for necessary medical care.