WASHINGTON DC – Insurance companies argued that using the reimbursement schedule for worker’s compensation to control the costs for no-fault insurance would allow rate cuts, at least in the long run. But Democrats on the House Insurance Committee did not appear ready Wednesday to trade cuts to physicians and hospitals without a guarantee of rate cuts also for customers.

Committee members particularly from the Detroit area said they wanted to see insurance rates cut, but said they saw only insurance company profits from HB 4792 , which would tie payments for medical services under no-fault to the same payments under worker’s compensation.

“This is a fight for us as legislators to give a special compensation to the insurance companies,” said Rep. Bettie Scott (D-Detroit). “This is legislation that is useless, pointless.”

Scott’s and others’ comments drew the ire of committee Chair Rep. Virgil Smith (D-Detroit), who called on his caucus members to come up with another plan if they did not like his.

“I get tired of hearing, ‘They charge too much,’ but give them a plan and they don’t want it,” he said of the members of his caucus.

Insurers said the proposal would cut costs for them and, because of competition in their market, lead to lower rates for customers. David Field with Allstate Insurance said his customers could see average rates drop as much as 9 percent based on the differences in service reimbursement between the current system and using the worker’s compensation schedules.

But healthcare officials argued the reimbursement cuts for no-fault would simply mean increasing charges elsewhere in the system. “Revising the rates paid under auto no-fault will not make the costs go away,” said Laura Appel with the Michigan Health and Hospital Association.

She and others also argued the worker’s compensation schedules do not cover all of the services that could potentially have to be rendered to a car crash victim.

Appel argued insurers could see some cost cuts by negotiating rates with hospitals and physician groups as health insurers do.

But Michael Purner with Hastings Mutual Insurance Company said his company’s 18,000 auto insurance customers across the state does not give it enough leverage to negotiate much of a cut in reimbursements with all the various hospitals.

The committee had recessed until after session in hopes of reporting the bill, but adjourned about 6 p.m. with session still underway.

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