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What is Utilization Review and how does it affect auto insurers?
Under R 500.61 through R 500.69, established under the authority granted to the DIFS Director by MCL 500.3157a, each automobile insurer providing personal protection insurance in Michigan is required to establish a Utilization Review program to determine the medical appropriateness of treatment received by insureds after an auto accident after July 1, 2020. Those determinations must be based on “medically accepted standards” and may later be appealed by the health care provider who submitted the claim if they disagree with the insurer’s determination. See Rules 64 and 65 for more information on the Determination and Provider Appeals Process.
When must each insurer implement a Utilization Review Program?
Under Rule 66, within 60 days of the effective date of these rules, insurers must have in place a utilization review program to review records and bills for treatment, training, products, services, and accommodations provided to an injured person that is above the usual range of utilization based on medically accepted standards. The effective date of the rules was December 18, 2020; therefore each insurer must have the Utilization Review program in place and file their application for certification no later than February 16, 2021. Insurers must file DIFS' Application for Initial Certification of No-Fault Utilization Review Program (FIS 2357) with DIFS for review and approval. An insurer may not rely on a third party reviewer to submit an application on the insurer’s behalf. An unconditional certification renewal application must be submitted to DIFS at least 90 days before the expiration of the current certification.
Should an auto insurer wait for DIFS’ certification approval prior to implementing their utilization review program?
No. The auto insurer’s utilization review program must be in place on or before February 16, 2021. If there are any deficiencies in the auto insurer’s application, DIFS will issue a conditional certification. The auto insurer will have up to one year to correct any deficiencies noted.
What duties does each insurer have under Utilization Review?
For additional information and clarification of duties, please see R 500.61 through R 500.69, which were required under MCL 500.3157a(3). In general, each insurer providing personal protection insurance in Michigan must:
- Under Rule 66, establish a Utilization Review program no later than February 16, 2021, using DIFS' Application for Initial Certification of No-Fault Utilization Review Program (FIS 2357) and, under Rule 67, apply for renewal of the program’s certification at least 90 days before it is set to expire.
- Under Rule 64, when necessary, gather sufficient information to enable the insurer to identify overutilized or otherwise inappropriate treatment, product, training, service, or accommodation provided after July 1, 2020 to an injured person who is insured under a policy of no-fault automobile insurance issued under chapter 31 or chapter 31A of the act, MCL 500.3101 to 500.3179 and 500.3181 to 500.3189. Under Rule 69, all information gathered under these reviews must be retained for at least two years after the request.
- Under Rule 63, submit any request for additional information or explanation to the provider within 30 days of the receipt of a disputed bill.
- Under Rule 64, issue a written notice of the determination to the provider within 30 days when a determination is made that a treatment, product, training, service, or accommodation is not medically appropriate.
- Under Rule 65, if the insurer wishes to reply to a provider appeal, the insurer must respond within 21 days after the date of the notice.
- Under Rule 68, submit an annual report to the Department no later than March 31 of each year. This report shall consist of a form prescribed by the department and will include utilization review data and activities.
Can an auto insurer’s application for certification be denied for not meeting DIFS’ standards?
No. DIFS’ will either provide a designation of either unconditional or conditional for certification applications. In the event of a conditional certification, the insurer must resolve all deficiencies before reapplying for unconditional certification.
Can an auto insurer complete a single Application for Initial Certification of No-Fault Utilization Review Program (FIS 2357) form with multiple NAIC numbers?
Yes, but only if the following is true: (1) the contact information noted on the application form is the same for all included companies; (2) the utilization review program must be same for all included companies. When completing one application for multiple companies and NAIC numbers, please attach all company names and NAIC numbers on a separate document with the application.
Note: Separate applications must be used for each company and NAIC number if its Utilization Review program will differ in any way.
Can a third-party reviewer file an application for Initial Certification of No-Fault Utilization Review Program (FIS 2357) form on behalf of an auto insurer?
No. The auto insurer is responsible for submitting the application to DIFS. Contact information and authorized signature in the application must be for the auto insurer.