The No-Fault Act (NFA); The trial court’s subject-matter jurisdiction; Whether an administrative appeal of an insurer’s utilization review is required; MCL 500.3157a; MI Admin Code, R 500.64 & 500.65; MCL 500.3112; Statutory interpretation; “May”; Department of Ins & Fin Servs (DIFS)

The court held that an administrative appeal of defendant-insurer’s utilization review via the procedures in MCL 500.3157a and R 500.65 was permissive, not mandatory. Thus, plaintiff-healthcare provider could sue defendant under MCL 500.3112 without exhausting the nonexclusive administrative appeal, and the trial court had subject-matter jurisdiction over plaintiff’s claims. As a result, the court affirmed the trial court’s denial of defendant’s motion for summary disposition under MCR 2.116(C)(4) and its award of no-fault benefits, costs, and attorney fees to plaintiff. In asserting that the trial court lacked subject-matter jurisdiction, defendant contended MCL 500.3157a and Rule 500.65 required plaintiff “to appeal to the DIFS before filing suit.” On appeal, the court concluded that at “its core, a utilization review is an ‘initial evaluation’ of the appropriateness of the level and quality of treatment. . . . The cause of action that the Legislature provided in MCL 500.3112 is not preconditioned on the permissive administrative appeal of that initial evaluation.” Rather, the NFA’s plain language showed “that the Legislature intended alternate pathways for determining whether care was appropriate.” The court noted that “MCL 500.3157a(5) provides that if an insurer’s utilization review determines that a provider ordered inappropriate treatment, the provider ‘may appeal the determination’ to the DIFS.” It uses the permissive word “may” rather than “shall” or “must.” Further, Rule 500.65 likewise uses the word “may.” The court found that the “ordinary meaning of these words suggests that both the Legislature and the DIFS intended subsection 3157a(5) and Rule 500.65 to provide an alternative and discretionary way to appeal a utilization review determination to the DIFS, not an exclusive or mandatory method for challenging denial of benefits.” The court agreed with the trial court that “reading the permissive language in MCL 500.3157a(5) and Rule 500.65 as mandatory or exclusive conflicts with the Legislature’s intent as expressed in other” sections of the NFA. As an administrative appeal is permitted but not required, plaintiff “was not required to appeal the utilization review decision to the DIFS to satisfy administrative exhaustion requirements.”