Issues: Reasonableness of charges for surgical implant products under the No-Fault Insurance Act (NFA) (MCL 500.3101 et seq.); Docket No. 318440 - Motion for directed verdict; Elezovic v. Ford Motor Co.; Smith v. Foerster-Bolser Constr., Inc.; Bronson Methodist Hosp. v. Auto-Owners In.s Co.; Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass'n; Hardrick v. Auto Club Ins. Ass'n; Nasser v. Auto Club Ins Ass'n; Claim that cost containment provisions in MCL 500.3107(a) & MCL 500.3157 rise to the level of being a constitutional consideration or requirement when determining whether a provider's charge is reasonable; Shavers v. Attorney Gen.; Claim that the manner in which the plaintiff-hospital (Lakeland) calculates its charges for surgical implants - setting the customary charge high with knowledge that only no-fault carriers will pay the full amount - is unreasonable; Hofmann v. Auto Club Ins. Ass'n; Munson Med. Ctr. v. Auto Club Ins. Ass'n; Docket No. 319331 - Motion for attorney fees; MCL 500.3148(1); Claim that defendant-Auto-Owners' appeal was moot; Becker v. Halliday; B P 7 v. Bureau of State Lottery

Court: Michigan Court of Appeals (Unpublished)

Case Name: Lakeland Hosps. at Niles & St. Joseph Inc. v. Auto-Owners Ins. Co.

e-Journal Number: 59282

Judge(s): Per Curiam – O’Connell, Sawyer, and Markey


In Docket No. 318440, the court held that the trial court properly denied defendant-Auto-Owners Insurance Company's motion for directed verdict. In Docket No. 319331, the trial court did not abuse its discretion by denying plaintiff-Lakeland's request for attorney fees. The case involved the reasonableness of charges for surgical implant products billed by Lakeland to the insured's no-fault carrier, Auto-Owners, under the NFA. The insured, B, was injured in a motor vehicle accident in 8/07. Lakeland provided medical care and treatment to B for injuries related to the accident when he had a spinal fusion in 2011. Auto-Owners initially paid Lakeland the full amount charged for all expenses, except for the amount billed for the surgical implants; it later paid a reduced amount for the surgical implants. Lakeland sued for the outstanding amount. In Docket No. 318440, Auto-Owners argued on appeal that the trial court erred by denying its motion for directed verdict. However, the court disagreed, concluding that a factual question as to the reasonableness of the charge existed at the close of Lakeland's proofs on which reasonable jurors could differ. "Lakeland did not erroneously rely solely on the itemized bills and record to establish the reasonableness of the surgical implants charge. Rather, evidence was properly presented as to Lakeland's wholesale cost for the implants and the amount billed to Auto-Owners for the implants in relation to the total bill, as well as testimony that its total bill for the procedure was a 'bargain' compared to the total amount other providers charged for the same surgery." There was also testimony that the charge for the implants included the amount "allocated to the cost of running the whole health system, including the costs associated with the physicians, medical records, purchasing, building overhead, employee benefits, etc." B's total bill included an allocation for a certain portion of that cost, which for B's procedure was allocated to the cost charged for the surgical implant. "While it is true that each specific expense must be reasonable . . . it does not follow that only direct evidence of the implant cost may be used to establish the reasonableness of the charges. Rather, evidence regarding the additional overhead costs included in the price charged for the implants shed some light on the reasonableness of the charge and was appropriately heard by the jury." Because the issue was factually disputed and Lakeland presented evidence to support the reasonableness of the charge, the court held that the reasonableness of the charge was a question of fact for the jury to decide. Affirmed.


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