Case Update: Provider Actions Not Barred Because An Insurer Rescinds Claimant’s Policy
Case Update: Provider Actions Not Barred Because An Insurer Rescinds Claimant’s Policy
Aimee M. Fowler, Esq.
On April 6, 2023, the Court of Appeals issued its opinion in C-Spine Orthopedics, PLLC v. Progressive Michigan Ins. Co. and LM General Ins. Co, COA #359681, resulting in a major win for medical providers treating auto accident patients. The Court determined that when a provider files a lawsuit, before the underlying claimant files his or her action, a determination by the automobile insurer to rescind the underlying claimant’s policy, does not automatically preclude recovery by the provider in its separate action.
Following its developing line of cases, the Court determined that the legal doctrine of res judicata, which bars the same civil matter from being filed twice where it has been previously resolved, does not bar a properly filed provider suit based upon an assignment. The Court has held that the assignment of rights by an auto accident claimant causes them to lose privity in interest, meaning they no longer share the same legal interest. As such, the legal doctrines of res judicata and collateral estoppel cannot bar or result in a dismissal of a provider’s claim on these grounds, if they have properly filed separate suit based upon an assignment of rights.
Under those circumstances, even if the insurer rescinded the claimant’s policy during the course of litigation and obtained a judgment, the provider’s claim is not defeated on grounds of res judicata or collateral estoppel. This does not mean other challenges couldn’t result in defeat of the provider’s claim, but these avenues are no longer available to insurance defendants to attempt to dispose of a claim.
Providers are having to navigate seemingly choppier waters in the No-Fault space each passing day. Our office specializes in working with providers to find refuge from these stormy times in the No-Fault act by providing advanced strategies to improve the speed and values of outcomes, even where the Medicare Fee Schedule may apply all or a portion of a provider’s bills. If you are a provider looking for guidance, please contact our office to see if we can help you.










