                          STATE OF MICHIGAN

                           COURT OF APPEALS



RICHARD P. KOSKI,                                                   UNPUBLISHED
                                                                    February 14, 2017
               Plaintiff-Appellee,

v                                                                   No. 328233
                                                                    Baraga Circuit Court
AUTO CLUB INSURANCE ASSOCIATION,                                    LC No. 2013-006421-NF

               Defendant-Appellant.


Before: MARKEY, P.J., and MURPHY and RONAYNE KRAUSE, JJ.

PER CURIAM.

        Plaintiff sustained serious injuries when he was hit by a motor vehicle while operating his
motorcycle, and Marquette General Hospital (the hospital), amongst others, provided plaintiff
with medical treatment and services. Blue Cross & Blue Shield of Michigan (BCBSM) was
plaintiff’s health insurer, and BCBSM paid the hospital and other providers for the care that was
rendered to plaintiff. Pursuant to practitioner participation agreements with BCBSM, the
hospital and other medical providers accepted reduced payments from BCBSM in full
satisfaction for medical bills arising out of plaintiff’s care. The difference between the billed
medical expenses and the amounts accepted by the hospital and other medical providers as
payment in full has been described as the “BCBSM differential,” which totaled $142,561.
Defendant Auto Club Insurance Association (ACIA), as the no-fault insurer of the motor vehicle
involved in the accident, was responsible for the payment of personal protection insurance
benefits, commonly referred to as PIP benefits, and there is no dispute that ACIA was first in
priority with respect to the payment of plaintiff’s medical bills. Accordingly, ACIA fully
reimbursed BCBSM for the payments made by BCBSM. Plaintiff, however, claimed that he
remained entitled to payment of the BCBSM differential by ACIA, as the BCBSM differential
reflected “incurred” expenses for purposes of MCL 500.3107(1)(a). The trial court agreed with
plaintiff and entered a judgment awarding plaintiff, in part, the BCBSM differential, as well as
penalty interest, MCL 500.3142, a portion of which pertained to the BCBSM differential. ACIA
appeals as of right, and we reverse and remand for entry of judgment in favor of ACIA in regard
to the BCBSM differential and the penalty interest associated with the differential.

       This Court reviews de novo a trial court’s decision on a motion for summary disposition,
Loweke v Ann Arbor Ceiling & Partition Co, LLC, 489 Mich 157, 162; 809 NW2d 553 (2011),
as well as questions of law in general, including issues of statutory interpretation, Oakland Co
Bd of Co Rd Comm’rs v Mich Prop & Cas Guaranty Ass’n, 456 Mich 590, 610; 575 NW2d 751

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(1998). We conclude, quite simply, that Bombalski v Auto Club Ins Ass’n, 247 Mich App 536;
637 NW2d 251 (2001), and Williams v AAA Mich, 250 Mich App 249; 646 NW2d 476 (2002),
dictate reversal of the trial court’s ruling, absent the need for any further analysis.

        Under MCL 500.3107(1)(a), PIP benefits are generally payable for “[a]llowable expenses
consisting of all reasonable charges incurred for reasonably necessary products, services and
accommodations for an injured person's care, recovery, or rehabilitation.” (Emphasis added.) In
Williams, the plaintiff, who was injured in a motor vehicle accident, incurred expenses for
medical services and treatment provided by Mary Free Bed Hospital (MFBH). At the time of the
accident, the plaintiff had a no-fault insurance policy with the defendant insurer. The plaintiff’s
health insurer was BCBSM. Williams, 250 Mich App at 253-254. This Court observed that
“BCBSM [had] apparently paid many of plaintiff’s medical bills despite that its policy with
plaintiff provided that his no-fault carrier had primary responsibility for automobile-related
injuries.” Id. at 254 n 1. MFBH charged $163,266 for its services, but accepted $84,099 from
BCBSM as payment in full. Id. at 255. The “plaintiff argued that his policy with defendant [no-
fault insurer] required that defendant pay him uncoordinated medical benefits, specifically the
full amounts charged for services by MFBH, . . . not the lesser amounts that BCBSM negotiated
as payments in full . . . .” Id. at 254-255. The “defendant acknowledged plaintiff’s entitlement
to its payment of uncoordinated medical expenses, but asserted that its payment obligation was
limited to the amounts that BCBSM had paid in satisfaction of plaintiff’s health providers’
charges.” Id. at 255.

        The Williams panel stated that “[i]n Bombalski . . ., this Court recently decided the exact
issue that plaintiff raises.” Williams, 250 Mich App at 268. The Court in Williams declared that
Bombalski “held that under MCL 500.3107(1)(a) the plaintiff could recover no-fault benefits
only to the extent that he had incurred charges for reasonably necessary services.” Williams, 250
Mich App at 268. After quoting a passage from Bombalski, the Williams panel held:

               In this case, plaintiff seems to acknowledge that he owes no outstanding
       amounts to MFBH for the services it provided and that, pursuant to its contractual
       agreement with BCBSM, MFBH accepted the reimbursement amounts that
       BCBSM offered as payment in full for the services that MFBH provided.
       Consequently, plaintiff did not incur the full amounts billed by MFBH and is not
       entitled to a further recovery from defendant of the difference between the full
       amounts that MFBH billed for its services and the lesser amounts that MFBH
       accepted from BCBSM as payment in full. We conclude that the trial court
       properly calculated the amount of uncoordinated no-fault benefits to which
       plaintiff was entitled. [Id. at 269 (citation omitted; emphasis added).]

        This analysis and reasoning controls in the instant case, entirely undermining plaintiff’s
argument, which mimics the rejected argument made by the plaintiff in Williams. Plaintiff has
simply not “incurred” charges relative to the BCBSM differential. The hospital, via an affidavit
from its chief financial officer, indicated that there would be no attempts to collect the BCBSM
differential from plaintiff or ACIA, and there is no indication in the record that any other medical
provider has sought recovery of the BCBSM differential. Moreover, plaintiff does not even
argue that such a recovery can be, has been, or might be sought by a medical provider. Instead,
plaintiff proceeds on the basis that the BCBSM differential reflected incurred expenses

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regardless of the fact that recovery of the differential has not been requested or pursued by the
medical providers. Plaintiff attempts to avoid the impact of Bombalski and Williams by arguing
that BCBSM paid the medical providers in error or by mistake, as ACIA was solely obligated to
cover the medical expenses. According to plaintiff’s theory, absent BCBSM’s involvement,
ACIA would have been responsible for the entire amount billed by the providers; therefore,
ACIA should be made to pay plaintiff the BCBSM differential.1 We must take the facts as they
actually transpired, and the bottom line is that BCBSM did make the payments and the medical
providers have declined to pursue recovery of the BCBSM differential from plaintiff or ACIA.
Accordingly, plaintiff has not “incurred” charges related to the differential for purposes of MCL
500.3107(1)(a). Plaintiff’s arguments to the contrary are simply unavailing.

        Reversed and remanded for entry of judgment in favor of ACIA with respect to the
BCBSM differential and the penalty interest associated with the differential. We do not retain
jurisdiction. Having fully prevailed on appeal, ACIA is awarded taxable costs under MCR
7.219.



                                                           /s/ Jane E. Markey
                                                           /s/ William B. Murphy
                                                           /s/ Amy Ronayne Krause




1
 Plaintiff also suggests that Bombalski was wrongly decided; however, we are bound by
Bombalski, as well as Williams. MCR 7.215(J)(1).


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