Background
Joseph Canty alleged that he was injured in a February 2021 automobile accident caused by Michael Mason. Although Canty carried no-fault insurance, he had opted out of personal protection insurance coverage because he had qualified health coverage through Medicare Parts A and B. He therefore sued Mason in tort under MCL 500.3135(3)(c) to recover allowable medical expenses.
Mason moved for partial summary disposition, asserting that several treating providers participated in Medicare but neither billed Medicare nor charged Medicare rates. He argued that Canty failed to mitigate his damages by seeking Medicare payment and that any recovery was limited by the reimbursement provisions of MCL 500.3157. The trial court rejected both arguments. A divided Court of Appeals reversed, holding that Canty had a duty to mitigate and that MCL 500.3157 applied.
The Court’s Holding
The Michigan Supreme Court held that the common-law mitigation-of-damages doctrine applies to tort claims under MCL 500.3135(3)(c). A Medicare-covered plaintiff must make reasonable efforts to obtain Medicare payment for treatment received from Medicare-participating providers. The defendant bears the burden of proving failure to mitigate, and the reasonableness of the plaintiff’s efforts is a question for the factfinder. Canty may still argue that obtaining treatment from non-Medicare providers was reasonable.
The Court separately held that MCL 500.3157’s reimbursement limits do not apply to tort damages under MCL 500.3135(3)(c). The latter statute incorporates the definitions in MCL 500.3107 through MCL 500.3110, not MCL 500.3157, whose text addresses treatment covered by PIP insurance. The Court therefore affirmed the Court of Appeals on mitigation, reversed it on the reimbursement limits, and remanded for further proceedings.
Key Takeaways
- A Medicare beneficiary who opted out of PIP coverage must reasonably seek Medicare payment for treatment from Medicare-participating providers before claiming those expenses as tort damages.
- The phrase “without limit” in MCL 500.3135(3)(c) does not eliminate the requirement that allowable expenses be reasonable and reasonably necessary.
- The reimbursement caps in MCL 500.3157 govern PIP benefits and do not cap damages in a third-party tort action under MCL 500.3135(3)(c).
Why It Matters
The decision separates two constraints on medical-expense claims after a Medicare beneficiary opts out of PIP coverage. Plaintiffs must use Medicare when reasonable to reduce their losses, but defendants cannot automatically impose the no-fault act’s MCL 500.3157 reimbursement caps on the remaining tort claim.
The ruling may permit recovery above PIP reimbursement limits for expenses proven reasonable and necessary, while leaving defendants able to contest mitigation and the reasonableness of the claimed charges. The case returns to the trial court for those issues to be addressed.