Did an Algorithm Cut Your No-Fault Medical Bills?
You went to the hospital after a Michigan car crash, did everything right, and then the statements started arriving with numbers that do not add up. The bill says one thing, the insurer paid another, and somewhere in between a software program decided what your treatment was worth. More and more, insurance companies feed your medical bills through automated repricing tools that compare every line to a database and shave the payment down. This guide explains, in plain terms, how that repricing works in Michigan no-fault, why a computer cutting a bill is not the last word, and what you can do when an algorithm gets between you and the care you are owed.
What Bill Repricing Software Actually Does
When a doctor or hospital treats you after a crash and sends the bill to your no-fault insurer, that bill does not always reach a human first. Many insurers run it through repricing software, sometimes called a bill review or claims pricing engine. The program reads each charge, matches it against a reference database, and recommends a reduced amount the insurer will actually pay. It can flag a charge as above the usual rate, bundle separate services together, or recode a procedure to a cheaper one. The reduction is presented as objective, as if a neutral calculator simply found the correct price.
The problem is that the software is built and tuned by or for the company that pays the bill, and it is rewarded for finding reasons to pay less. It does not see your injuries, your chart, or the reason a treatment that looks unusual on paper was exactly what your condition required. It applies broad rules to a specific human being, and when those rules are wrong the result is an underpaid provider, a balance in dispute, and sometimes a patient caught in the middle.
How Michigan Decides What Your Treatment Is Worth
Michigan does not let an insurer or its software invent any number it likes. Two rules control. First, you are entitled to payment for reasonably necessary medical care related to the crash under MCL 500.3107, regardless of who was at fault. Second, how much a provider can be paid for that care is governed by the no-fault medical fee schedule in MCL 500.3157, which was added in the 2019 reform. For treatment that Medicare prices, the fee schedule generally limits payment to 190 percent of the Medicare amount for that service under MCL 500.3157(2). For treatment Medicare does not price, the limit starts from a percentage of what the provider charged on January 1, 2019, a baseline the law adjusts for inflation over time. Certain hospitals that treat large numbers of indigent patients are paid at higher percentages, and there is a 56 hour per week limit on in-home attendant care provided by a family member.
Two points often get missed. Not every benefit is capped by this schedule. Items such as home and vehicle modifications, non-emergency medical transportation, and over-the-counter medicines are paid under the simple reasonableness standard in MCL 500.3107, so software that applies fee-schedule cuts to those may be wrong on its face. And if you were injured before June 11, 2019, the fee schedule does not apply to your care at all. Under the Michigan Supreme Court’s decision in Andary v USAA, the older reasonable-charge standard still governs those claims.
That fee schedule is the real ceiling, set by statute, not by a vendor’s database. Repricing software is supposed to apply those rules, but it often goes further, cutting charges below what the law allows or recoding services in ways the statute does not support. When the algorithm and the fee schedule disagree, the fee schedule wins, and an attorney can hold the insurer to it.
Why a Computer Cutting Your Bill Can Reach You
Many people assume a billing dispute is only the hospital’s problem. Often it is, because a provider that accepts no-fault generally cannot bill you for the difference between its charge and what the fee schedule allows. But repricing reductions still find their way to patients in real ways. A provider that keeps getting underpaid may stop treating you or send the account toward collections. An underpayment can be dressed up as a coverage decision, with the insurer claiming a service was not necessary rather than simply cutting the price. And when you have a third-party claim against the at-fault driver, the value of your past medical bills becomes part of the fight, so a number a computer shrank today can be used to shrink your settlement later.
None of that is a reason to accept the algorithm’s figure. It is a reason to look closely at how the bill was cut, by what rule, and whether that rule matches Michigan law.
When an Underpayment Becomes a Penalty Problem for the Insurer
Michigan no-fault does not just set what is payable. It also pushes insurers to pay on time. No-fault benefits are overdue if they are not paid within 30 days after the insurer receives reasonable proof of the loss, under MCL 500.3142. Overdue benefits carry penalty interest at 12 percent per year. On top of that, if an insurer unreasonably refused to pay or delayed payment of a clearly owed benefit, MCL 500.3148 can require the insurer to pay your attorney fees. So when a repricing engine cuts a valid charge and the insurer leans on that cut to delay or deny payment, the law gives you tools that a software vendor never accounted for.
A Closer Look: Algorithm Versus the Statute
The table below compares what repricing software tends to do with what Michigan law actually allows.
| Issue | What the software does | What Michigan law says |
|---|---|---|
| Setting the price | Applies a vendor database tuned to pay less. | Caps payment by the MCL 500.3157 fee schedule, not a private database. |
| Calling care unnecessary | Flags or recodes based on broad rules. | Necessity is a medical question under MCL 500.3107, decided on your records. |
| Paying on time | Has no deadline of its own. | Benefits overdue after 30 days draw 12 percent interest, MCL 500.3142. |
| Unreasonable cuts | Treated as routine bill review. | Unreasonable refusal or delay can shift attorney fees, MCL 500.3148. |
An algorithm can produce a number quickly, but it cannot rewrite the statute, and that gap is where a lawyer goes to work.
What To Do If You Think a Bill Was Wrongly Cut
Start by keeping every document. Save the provider’s itemized bill, the insurer’s explanation of how much it paid, and any letter describing a reduction or a code change. Ask the insurer, in writing, to identify the exact basis for the reduction and the fee schedule provision it relied on. Watch your deadlines, because the one-year notice and one-year-back rules in MCL 500.3145 can limit how far back you may recover unpaid benefits. And if the cuts keep coming or a provider threatens collections, have the claim reviewed before the underpayment hardens into a denial.
Frequently Asked Questions
Can a no-fault insurer really use software to reduce my medical bills?
Yes. Many insurers run bills through automated repricing tools that recommend a reduced payment. What the software cannot do is pay less than Michigan law allows. The MCL 500.3157 fee schedule sets the ceiling for covered care, and a cut below that figure can be challenged.
Will I have to pay the difference the insurer did not cover?
Usually not. A provider that accepts no-fault generally cannot bill you for the gap between its charge and the fee schedule amount. There is an exception worth knowing: if the insurer denies your claim outright rather than just underpaying it, a provider may try to collect from you while the dispute is unresolved. Either way, balance bills or collection notices after a crash are a sign something is wrong and worth having reviewed.
What is the most the insurer has to pay my doctor?
For care that Medicare prices, the no-fault fee schedule generally limits payment to 190 percent of the Medicare amount. For care Medicare does not price, the limit is 52.5 percent of the provider’s January 1, 2019 charge. Some hospitals serving many indigent patients are paid at higher percentages.
The insurer says a treatment was not necessary. Is that the same as repricing?
No, and the difference matters. Repricing is about the dollar amount. Necessity is a medical question under MCL 500.3107, decided on your records and your doctors’ judgment, not a software rule. An insurer cannot turn a price cut into a denial without medical support.
Does the insurer owe me anything extra for paying late?
It can. Benefits not paid within 30 days of reasonable proof are overdue and carry 12 percent yearly interest under MCL 500.3142. If the insurer unreasonably refused or delayed a clearly owed benefit, MCL 500.3148 can require it to pay your attorney fees.
Does it cost anything to have a lawyer look at my bills?
No. A consultation with our office is free, and we work on contingency, which means no fee unless we recover for you. If an algorithm has been cutting your no-fault bills, it costs nothing to have your case reviewed.
Did a computer shrink the bills your no-fault insurance is supposed to pay? Talk to a real attorney, free.
Attorney Manny Chahal will check the reductions against Michigan’s fee schedule, demand the basis for every cut, and pursue interest and fees when an insurer underpays. Free statewide consultation. No fee unless we recover. Call 1-844-MCHAHAL.
Call 1-844-624-2425