Farmers Insurance loses PIP battle over Medicare-covered medical expenses
Antoine Lee sued Farmers for medical expenses incurred years after a 1978 motor vehicle collision. The expenses were incurred in 2008 and Lee sued in 2009. Ultimately, the trial judge ruled that Farmers owed Lee about $100,000.00 in medical expenses that had been improperly paid by Medicare, plus $50,000.00 in fees and costs. Although Medicare would have a lien on the recovery, Farmers argued that it should not have to pay the expenses at all, despite its contract obligation, if Medicare had previously paid them. Farmers did not dispute the fact that under Michigan's no fault law, it owed the benefits: it argued that Medicare's payment discharged its obligation.
Two Judges of the Court of Appeals readily agreed with the trial court that Medicare's payment of the medical expenses did not relieve Farmers' of its statutory duty. Judge Henry Saad, the insurer's best friend, dissented and would relieve Farmers' of its statutory obligation because it had allowed the obligation to be fulfilled by taxpayers.