Michigan health system out $65M in payments after law change

Health systems in Michigan are feeling the financial pinch from a no-fault auto reform law passed by the state last year, according to ABC affiliate WZZM13

The no-fault auto reform law sought to save drivers money, but there were unintended consequences for accident survivors and health systems due to reimbursement caps, the fee schedule and a limit on paid in-home care hours, according to the report. 

Specifically, BHSH System  — formed by the recent merger of Grand Rapids, Mich.-based Spectrum Health and Southfield, Mich.-based Beaumont Health — said the law change has cost it $65 million in the eight months since it took effect. 

That is "a huge amount of money for us," BHSH System CFO Matthew Cox told WZZM13.

"They've compelled us to make changes to programs, to staffing," said Mr. Cox. "We've taken these cuts into account for our 2022 operating plan."

The health system is working to offset the loss of payment by looking into automation and other efficiency measures to lower costs. 

Other hospitals in Michigan are affected by the law change as well. Mary Free Bed Rehabilitation Hospital is trimming $5.5 million from next year's budget due to the reform, inflation and changing payer mix, according to the report. 

"We're working together with all our team members in this process," a spokesperson for Mary Free Bed told WZZM13. "Each of us is reviewing ways to do our jobs more efficiently and reduce costs. Simultaneously we're looking for opportunities to grow clinical services and create more value for the communities we serve."

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