Crash survivors claim neglect from insurers under new law

After a car accident in October 2020, Cheryl Capiak was left paralyzed from the chest down and receives constant care at her home.

However, she said that needed assistance may be taken away from her due to recent changes in Michigan's auto insurance law.

"It's a contract that's been broken," said Capiak, a Niles resident. "For 40 years, I paid for unlimited (auto insurance) because I was like, God forbid something happens. The first thing I thought when I woke up in the hospital was, 'Thank God I have insurance.'"

The 60-year-old said the cost for the 24/7 care she needs and medical supplies is high, with her wheelchair alone costing $40,000.

"I wouldn't have everything I needed if I had to pay for all of this stuff myself," said Capiak, who needs help doing everything from getting out of bed to bathing.

But the amount of money auto insurance companies are required to pay for the care of some long-term patients has been cut almost in half due to a provision in a state law approved by state legislators in 2019, which was aimed at reducing auto insurance rates for Michigan drivers.

As of July 1, 2021, auto insurance companies are only required to reimburse providers at 55 percent of what they were paying in 2019 for services not covered by Medicare, which includes most home health care. That rate drops to 54 percent this July and to 52.5 percent after July 1, 2023.

Capiak said Private Duty Home Healthcare in St. Joseph is now asking her to pay the difference, which is $13.50 an hour.

"Who can afford that? Nobody can afford that," she said. "If I had known I was going to have to do that, I would have taken on another insurance policy. But I didn't think I needed another insurance policy because I already had an unlimited policy. How does that not pay for this?"

She's called around, but no other company is able to provide her care at the cost the auto insurance company is now paying.

'They broke a contract'

Capiak isn't the only person in Southwest Michigan who is having problems paying for care due to the new state law.

Edwin Vance of Berrien Springs said his wife, Sheryl Vance, 81, was hit by a car while walking across the street in 2010 and suffered a traumatic brain injury, leaving her with memory problems, difficulty walking and seizures – which have gotten worse over the years.

He said he was her sole, unpaid caregiver until about three years ago, when his car insurance company agreed to pay to have a home health care worker come to the home 12 hours a week to watch his wife while he is out of the house.

However, since the new rates took effect, Vance said he's been required to pay $500 a month or risk losing those 12 hours of weekly care.

"The reason they cut back is because the new auto insurance law requires them to pay less," Vance said the insurance company told him. "Unless they get the law changed, they say they can't pay more."

State Sen. Aric Nesbitt, R-Lawton, who sponsored the 2019 bill, said the 55 percent is the minimum auto insurance companies are required to pay – but they can pay more.

"The auto insurance companies still have contractual obligations to make sure that the auto accident victims that have unlimited lifetime care are still taken care of," he said when contacted by phone Thursday.

Vance said he and his wife have paid for car insurance in Michigan since 1972.

"When I bought the insurance from the insurance company, it was said that (traumatic injury care) would be for a lifetime," he said. "When you have a traumatic head injury, that lifetime is until she dies. I believe that they broke a contract with the Michigan people when they wrote that law. If they had written the law where it grandfathered in all the old insurance and they started doing it with the new accidents, that would be another thing."

Going to court

Sarah Rhein, assistant director of Private Duty Home Healthcare, said the agency will have to stop serving several patients whose care is being paid for through auto insurance because the reimbursement rate doesn't even cover the cost of staff.

Rhein said their St. Joseph company has been able to continue caring for the patients because they have other patients who either self-pay or have private insurance.

But she said it's unsustainable to continue caring for patients at a loss, and the company gave notice in December to at least two clients that it would have to stop providing care after Jan. 15 – if the auto insurance company didn't start paying the full rate.

That led to Private Duty and the guardian of one of their patients filing a civil lawsuit on Dec. 9 against Auto-Owners Insurance Co. at the Berrien County Courthouse in St. Joseph. According to the lawsuit, the plaintiffs claim the insurance company is violating the state's no-fault act by cutting how much it is paying to care for the patient.

An emergency motion for a preliminary injunction concerning the case will be heard at 2 p.m. Tuesday in front of Circuit Court Judge Donna Howard. Private Duty and the guardian are asking the insurance company be required to pay the rates it was paying before the law went into effect while the case winds its way through the court system.

The case involves a 27-year-old St. Joseph Township woman who, in August 2010, was struck by several vehicles while walking along Nickerson Avenue in Benton Township. Her grandmother, who is also her guardian, said her granddaughter was 17 and entering her senior year at St. Joseph High School when the accident happened.

The grandmother, who is in her 80s, asked that their names not be used to protect their privacy.

She said her granddaughter suffered a traumatic brain injury, leaving her paralyzed and only able to communicate through blinking.

Rhein said it's frustrating because the granddaughter won't be able to survive without 24/7 skilled nursing care.

"If this young lady doesn't get a (court) ruling in her favor, the only other option would be for her to go to a nursing home if insurance will pay for it," she said.

But that means she will go from one-on-one care to about one nurse designated to 20 people each.

"That's not going to keep her alive," Rhein said.

In court documents, the attorney representing Auto-Owners said the company had no choice but to cut the rate paid to 55 percent of what it was previously paying in order to follow the new law.

If the court orders the company to pay what it was previously paying, "then Auto-Owners will be required to continue reimbursing claims in amounts that are contrary to the current law and that it is not required to reimburse," the documents state.

Auto-Owners also states there is nothing retroactive in the law passed by state legislators in 2019.

Dan Witalec, administrator of corporate communications for Auto-Owners, said in an email to The Herald-Palladium that the company is following the law.

"Michigan PIP reform changed rates of reimbursement for medical benefits, including home health care," he said in the email. "Auto-Owners is adhering to this statutory language. Unfortunately, some health care providers won't provide care at this rate."

Stuck in limbo

Rhein said she has another client who was on the verge of suing her auto insurance company until the company verbally said it would extend full payments for another 30-90 days.

"But that hasn't solved the problem. She's in limbo," Rhein said of the client, who gave her permission to discuss the details of her case.

Rhein said this client, who lives in Bainbridge Township, was paralyzed from the chest down after an automobile accident in August 2019. She said they have no idea how long the full payments have been extended for because the auto insurance company hasn't put the extension in writing.

Rhein said they are doing everything they can to not drop clients due to reduced pay from the auto insurance companies.

"We don't feel like we can morally stop because what are they going to do?" she said.

She said the auto insurance companies are only interested in reducing rates.

"They haven't identified any appropriate alternative care options," Rhein said.