Michigan Court of Appeals Ruling Supports Medicare Payment Methodology in Home Health Reimbursement Cases 

Today the Michigan Court of Appeals issued new legal precedent analyzing reimbursement limits for home health services under MCL 500.3157. This decision limits reimbursement for home health services to 200% of the amount payable under Medicare and opens the door for motion practice to address improper billing methodology. 

In Central Home Health Care Servs Inc v Progressive Mich Ins Co, ___ Mich App ___; ___ NW2d ___ (Docket No. 364653), the parties asked the Court to determine whether home health services are payable under Medicare. Specifically, whether reimbursement for home health services is limited to 200% of the Medicare payment or whether plaintiff is owed 55% of the rates listed in its charge description master. 

Defendant Progressive argued that Medicare covers home health services, so MCL 500.3157(2) should apply to limit Plaintiff’s reimbursement by 200% of what Medicare would pay for those services. Plaintiff Central Home argued that there is no identifiable amount payable under Medicare, so Plaintiff should be compensated at 55% of the rates identified in its charge description master effective on January 1, 2019, citing MCL 500.3157(7). 

The Court noted that “the simple question to answer in determining whether MCL 500.3157(2) or MCL 500.3157(7) applies is whether Medicare covers the service at issue.” Central Home, ___ Mich App at ___; slip op at 6. 

On March 21, 2024, the Court ruled that yes, Medicare covers the service at issue—home health services, such as in-home nursing and in-home physical therapy. The fact that Medicare covers a particular service means that MCL 500.3157(2)(a) applies. This means that any reimbursement sought by plaintiffs for home health services is limited to 200% of the amount that Medicare would pay for home health services. This greatly lowers the required reimbursement amount as compared to the 55% of the charge description master that Plaintiff-Appellee argued should apply to home health services. 

Other significant aspects of the opinion include the Court explaining the limitations unrelated to rates mentioned in MCL500.3157(15)(f) as well as setting forth a test to determine whether MCL 500.3157(2) or (7) applies to medical services.  

If you have any questions or would like further information on how today’s decision affects a current matter at hand, please contact your Novara lawyer.