Michigan’s Adult Foster Care Licensing Act (AFCLA); “Adult foster care facility”; MCL400.703(4); “Establishments”; MCL 400.713(1); “Foster care”; MCL 400.704(7); “The provision of”; Deference to an agency’s administrative expertise; Reasonable reliance on an agency’s statutory interpretation; Lawfully rendered services compensable under the No-Fault Act

The court held that at the time of defendant-State Farm’s insured’s (S) stay, plaintiff-Insight Healing Center did not qualify as an adult foster care facility and thus, did not require licensure. As a result, the court rejected State Farm’s contention that the services Insight provided to S were not lawfully rendered and not compensable under the No-Fault Act. In 2014, the Department of Licensing and Regulatory Affairs visited Insight and concluded that “it was not an adult foster care facility and did not require licensure.” State Farm insisted that the department was wrong, and that Insight met the statutory definition of an adult foster care facility. Thus, State Farm maintained, “Insight operated illegally from 2016 through 2018, when” S resided there. The trial court agreed. However, the court concluded on appeal that regardless of the reasons behind Insight’s structure, at the time S resided there, its “business model incorporated the use of independent contractors.” There was no evidence suggesting that this was improper. After the 2014 investigation, the investigator formally determined that “Insight did not require a license and recommended that the complaint be closed. Apparently, it was.” The court found that “Insight’s approach was to allow the residents to develop independent relationships with care providers who were not beholden to nor managed by Insight. Arranging for services to be provided is fundamentally different from ‘providing’ the services. Because Insight itself did not provide the services, it fell outside MCL 400.704(7) and did not require licensure.” The court further noted that there was no evidence “the services for which Insight billed were unnecessary or unreasonable.” Reversed and remanded.