Can an AI Cut Off Your No-Fault Medical Benefits?
You were hurt in a Michigan crash, your doctor ordered more therapy or another procedure, and then a letter arrives saying the treatment is no longer covered because it is not reasonably necessary. More and more, that decision is being shaped by software. A 2025 industry survey found that roughly 71 percent of insurers now use artificial intelligence in some form of utilization management, the process insurers use to decide which care they will pay for. This guide explains how an algorithm can end up between you and your treatment, what Michigan no-fault law actually requires the insurer to pay, and the specific tools the law gives you to fight a cutoff and recover the benefits, plus penalties, you are owed.
What Your No-Fault Benefits Are Supposed to Cover
Michigan no-fault insurance pays personal injury protection benefits, usually called PIP, for people hurt in motor vehicle crashes. The core promise is in MCL 500.3107(1)(a): the insurer must pay all reasonable charges for products, services, and accommodations that are reasonably necessary for your care, recovery, or rehabilitation. Since the 2020 reforms, the amount of medical coverage available depends on the PIP level chosen on the policy, which can range from a capped amount up to unlimited. Within whatever coverage you have, the legal standard is the same: if the care is reasonably necessary and the charge is reasonable, it should be paid.
The phrase that does all the work, and all the fighting, is reasonably necessary. That is where insurers push back, and increasingly they use AI to do it at scale.
How an Algorithm Decides Your Care Is Not Necessary
Utilization review is the insurer’s evaluation of whether your treatment is appropriate in level and quality. In Michigan it is governed by MCL 500.3157a and a set of state rules. The honest reality is that many insurers now feed your billing codes, treatment history, and records into software that flags care for denial based on patterns rather than a careful look at you. In the health insurance world, two of the country’s largest insurers have been sued over algorithms that allegedly denied claims in bulk, in one case averaging only seconds of human review per file. State lawmakers have started to respond. California, for example, now requires a qualified human to review AI-generated medical necessity decisions, and several other states passed similar laws in 2025.
For an injured Michigan driver, the danger is the same whether the denial comes from a person or a program: a generic decision that ignores what your own treating doctor says you need. Michigan has not yet passed a law that specifically regulates how insurers use AI to decide no-fault claims, so the protection you have today comes from the no-fault statute itself. The good news is that Michigan law does not let the insurer have the last word, and an algorithm’s say-so is not a legal trump card.
Michigan Gives You Real Leverage When Benefits Are Cut Off
This is the part insurers do not advertise. When a no-fault insurer wrongly refuses or delays your PIP benefits, the law adds real cost on top of the benefits themselves, which is meant to discourage exactly this kind of automated denial.
- Penalty interest. Under MCL 500.3142, if the insurer does not pay within 30 days after receiving reasonable proof of the loss, the overdue amount carries 12 percent simple interest per year. That clock runs in your favor while they delay.
- Your attorney fees. Under MCL 500.3148, if a court finds the insurer unreasonably refused to pay or unreasonably delayed payment, the insurer can be ordered to pay your reasonable attorney fees. That is a powerful deterrent against a denial that cannot be justified.
- The right to challenge utilization review. The state process under MCL 500.3157a lets a provider appeal a utilization review determination to the Department of Insurance and Financial Services, and if the appeal succeeds, interest on the overdue payment follows under MCL 500.3142.
In other words, an insurer that lets an algorithm cut off necessary care is taking a real financial risk if the denial does not hold up. That risk is your leverage.
What To Do the Day Your Benefits Are Cut Off
Acting quickly protects both your health and your claim. The table below shows the practical steps and why each one counts.
| Step | Why it helps | Why timing matters |
|---|---|---|
| Get the denial in writing | Forces the insurer to state a specific reason you can challenge. | A vague or template denial is easier to attack while it is fresh. |
| Keep treating with your doctor | Your provider’s ongoing records are the strongest proof the care is necessary. | Gaps in treatment are used against you and can be hard to undo. |
| Ask your doctor for a necessity letter | A treating physician’s individualized opinion outweighs a generic algorithm. | It is most persuasive when written close to the disputed care. |
| Save every bill, code, and letter | Builds the proof-of-loss record that starts the 30-day penalty clock. | The 12 percent interest under MCL 500.3142 depends on this record. |
| Call a no-fault attorney | We can demand the basis for the denial and pursue benefits, interest, and fees. | The one-year-back rule limits how far back you can recover, so delay costs money. |
Do Not Let the One-Year-Back Rule Erase What You Are Owed
Time is not on your side when benefits are denied. Under MCL 500.3145, you generally must give written notice of injury to the correct insurer within one year of the crash, and a related rule can bar you from recovering bills and wage loss that are more than one year old at the time you file suit. For crashes on or after June 11, 2019, that one-year-back period pauses once you submit a specific claim for a benefit and stays paused until the insurer formally denies it. The lesson is simple: a denial is the start of a deadline, not the end of the road. Every month you wait can quietly shrink the amount you can still collect, which is why a cutoff is worth a phone call right away.
Frequently Asked Questions
Can an insurance company really use AI to deny my treatment?
Insurers are allowed to review whether care is reasonably necessary, and many now use software to help. What they cannot do is escape the legal standard. Under MCL 500.3107(1)(a) the question is whether your specific care is reasonably necessary, judged on your condition and your doctor’s opinion, not on what an algorithm predicts for the average patient. A denial that ignores your treating physician is exactly what the appeal process is built to challenge.
What does it cost me to fight a denial?
If a court finds the insurer unreasonably refused or delayed payment, MCL 500.3148 allows your attorney fees to be charged to the insurer, and overdue benefits carry 12 percent interest under MCL 500.3142. Our consultations are free and we work on contingency, so there is no out-of-pocket cost to have a denial reviewed.
My doctor says I need the treatment but the insurer says no. Who wins?
Neither side automatically wins, but your treating doctor’s individualized opinion is strong evidence that the care is reasonably necessary. A generic algorithmic denial that cannot point to a case-specific medical reason is far weaker. Documenting your doctor’s reasoning is one of the most effective ways to overturn a cutoff.
How long do I have to act after a cutoff?
Do not wait. Under MCL 500.3145 the one-year-back rule can bar older benefits, so each month of delay can reduce what you recover. Submitting a specific claim can pause that clock for crashes on or after June 11, 2019, but the safest move is to challenge the denial promptly with help from a lawyer.
Should I stop treatment if the insurer stops paying?
Talk to a lawyer before you do. Stopping care can hurt both your recovery and your claim, because gaps in treatment are used to argue the injury was not serious. There are ways to keep care going while a denial is challenged, and we can help you protect both your health and your benefits.
Did a denial letter just cut off your care? Talk to a real attorney, free.
Attorney Manny Chahal will demand the reason behind the cutoff and fight for your benefits, penalty interest, and attorney fees under Michigan no-fault law. Free statewide consultation. No fee unless we recover.
Call 1-844-624-2425