# Victoria Taylor v. Farmers Insurance Company

> Michigan Court of Appeals · April 14, 2025

URL: https://www.frixlaw.com/law-library/cases/10844849

## Case

- **Court:** Michigan Court of Appeals
- **Decided:** April 14, 2025
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10844849

## How later opinions describe it (automated extraction)

- explaining that it was consolidated with the hospital’s case against the no-fault insurer
- holding that a no-fault insurer did not have to pay more than what Medicaid paid to cover the plaintiff’s claim because the “plaintiff’s health care providers must accept as payment in full the Medicaid payments from the state”
- holding that a plaintiff did not “incur” any charges within the meaning of MCL 500.3107(1)(a) for treatment that the plaintiff received in Canada because the plaintiff received the treatment “free of charge” under Canada’s nationalized healthcare program

## Opinion text

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

VICTORIA TAYLOR, UNPUBLISHED
April 14, 2025
Plaintiff-Appellant, 1:39 PM
and

ASCENSION PROVIDENCE HOSPITAL,

Intervening Plaintiff,

v No. 368754
Wayne Circuit Court
FARMERS INSURANCE COMPANY, LC No. 21-001929-NF

Defendant-Appellee,
and

PROGRESSIVE MARATHON INSURANCE
COMPANY,

Defendant/Third-Party Plaintiff,
and

USAA CASUALTY INSURANCE COMPANY,

Third-Party Defendant.

Before: YATES, P.J., and O’BRIEN and FEENEY, JJ.

PER CURIAM.

In this first-party no-fault action, plaintiff, Victoria Taylor, appeals as of right the trial
court’s order granting partial summary disposition in favor of defendant, Farmers Insurance
Company. We affirm, but for reasons different than those given by the trial court.

-1-
I. BACKGROUND

Taylor was involved in a motor vehicle collision and sustained injuries. Those injuries
were treated by Detroit Medical Center Sinai-Grace Hospital (DMC). The relevant treatment
occurred between December 5, 2019 and December 8, 2019,1 and the cost of the treatment totaled
$113,072.25.

DMC billed Medicaid for Taylor’s treatment, and on January 17, 2020, Medicaid made a
conditional payment of $6,202.78 to DMC for Taylor’s medical bills. DMC accepted the
conditional payment, following which DMC’s billing statements showed that plaintiff owed $0 to
DMC.

At some point after Taylor was injured, she submitted a claim to Michigan Automobile
Insurance Placement Facility, which assigned Farmers to Taylor’s claim on January 25, 2021.
Taylor subsequently brought this case against Farmers, seeking unpaid no-fault benefits.2 Farmers
and Taylor were able to resolve all of their differences except for whether Farmers was obligated
to pay no-fault benefits to Taylor for the billed cost of her treatment at DMC from December 5,
2019 to December 8, 2019.

On that issue, Farmers moved for partial summary disposition under MCR 2.116(C)(8) and
(10), arguing that it was only responsible for paying charges that were “incurred” by Taylor, and
that Taylor did not “incur” any “expenses beyond those paid by Medicaid” because that is the
amount that satisfied Taylor’s bill and relieved her of any legal responsibility for the relevant
medical bills. Farmers added that DMC was in fact prohibited from seeking further recovery from
Taylor for the relevant medical expenses because, to accept Medicaid’s payment, DMC had to
agree that the payment fully satisfied Taylor’s bill.

In response, Taylor argued that she incurred the full amount of the charges reflected in her
medical bills when she received treatment from DMC, and that the Medicaid payment did not
change this fact because a medical provider in Michigan is entitled to “the total amount of
reasonable and customary charges, despite accepting payments by Medicaid.” Along with her
response, Taylor submitted an affidavit from Andrea Prevost, a billing representative for DMC,
who averred that the Medicaid payment that DMC accepted did not represent the reasonable and
customary charge for the treatment that DMC provided to Taylor. As for Farmers’ argument that
DMC was barred from seeking additional payments from Taylor after accepting a payment from
Medicaid, Taylor argued that the caselaw on which Farmers relied was inapposite because Taylor
technically did not qualify for Medicaid, as she was covered by a no-fault insurer.

At the start of the hearing on Farmers’ motion, the trial court clarified that the parties were
not disputing that Farmers was liable but rather were disputing the extent of Farmers’ liability—

1
Taylor received additional services from DMC after December 8, 2019, but the only services
relevant to this appeal are those rendered between December 5, 2019 and December 8, 2019.
2
As the case caption suggests, this case involved more litigants, but the issues concerning the other
litigants have been resolved, and only Farmers and plaintiff are parties to this appeal.

-2-
Farmers was contending that it was liable for the amount that Medicaid paid to satisfy Taylor’s
obligation to DMC, while Taylor was arguing that Farmers was liable for the full amount of
DMC’s original bill to Taylor. After listening to the parties’ ensuing arguments, the trial court
issued its ruling from the bench. The court first observed that federal caselaw prohibited a medical
provider from accepting a Medicaid payment then attempting to recover more from a third party.
“When providers enter into an agreement with . . . Medicaid,” the court explained, “they agree to
accept certain amounts and not bill over those amounts.” Providers were not required to accept
payment from Medicaid, the court reasoned, but if they chose to do so, and the decision was not a
mistake,3 then they were required to accept Medicaid’s payment as satisfaction of the patient’s
bill. The court added that if a provider was not happy with this arrangement, the provider could
choose not to accept payment from Medicaid. Following the hearing, the court entered an order
granting Farmers’ motion for partial summary disposition.

This appeal followed.

II. STANDARDS OF REVIEW

Farmers moved for partial summary disposition under MCR 2.116(C)(8) and (10). The
trial court, however, clearly granted the motion under MCR 2.116(C)(10) because it considered
evidence outside the pleadings. See Mino v Clio Sch Dist, 255 Mich App 60, 63 n 2; 661 NW2d
586 (2003).

A trial court’s decision on a motion for summary disposition brought under MCR
2.116(C)(10) is reviewed de novo. Johnson v Recca, 492 Mich 169, 173; 821 NW2d 520 (2012).
A motion under MCR 2.116(C)(10) tests the factual sufficiency of a claim. El-Khalil v Oakwood
Healthcare, Inc, 504 Mich 152, 160; 934 NW2d 665 (2019). The rule provides that a trial court
may grant a motion for summary disposition if there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. MCR 2.116(C)(10). “A genuine issue of
material fact exists when the record leaves open an issue upon which reasonable minds might
differ. Johnson v Vanderkooi, 502 Mich 751, 761; 918 NW2d 785 (2018) (quotation marks,
citation, and alteration omitted). When reviewing a motion filed under MCR 2.116(C)(10), courts
must consider the evidence in the light most favorable to the nonmoving party. El-Khalil, 504
Mich at 160.

III. ANALYSIS

Taylor argues that the trial court erred by granting Farmers’ motion for partial summary
disposition. We disagree.

3
Taylor asserted in the trial court, and maintains on appeal, that DMC billed and accepted payment
from Medicaid by mistake. We agree with the trial court, however, that Prevost’s affidavit dispels
any notion that DMC accepted Medicaid’s payment by mistake. Prevost’s affidavit states that
“DMC billed Medicaid” for Taylor’s treatment, Medicaid paid for the treatment, and DMC intends
to reimburse Medicaid “[w]hen and if payment is received” from Farmers.

-3-
Under MCL 500.3107(1)(a), a person injured in a motor vehicle collision is entitled to
recover personal protection insurance (PIP) benefits 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.” Our Supreme Court has explained that

the plain language of this provision imposes four requirements that a PIP claimant
must prove before recovering benefits for allowable expenses: (1) the expense must
be for an injured person’s care, recovery, or rehabilitation, (2) the expense must be
reasonably necessary, (3) the expense must be incurred, and (4) the charge must be
reasonable. [Douglas v Allstate Ins Co, 492 Mich 241, 247; 821 NW2d 472
(2012).]

The parties dispute the third requirement—whether Taylor “incurred” expenses beyond what
Medicaid paid to satisfy Taylor’s bill. “To ‘incur’ means [t]o become liable or subject to,
[especially] because of one’s own actions.” Proudfoot v State Farm Mut Ins Co, 469 Mich 476,
484; 673 NW2d 739 (2003) (quotation marks and footnote omitted, alteration in Proudfoot).

The parties rely on competing cases to argue for different results. Taylor relies on this
Court’s opinion in Shanafelt v Allstate Ins Co, 217 Mich App 625; 552 NW2d 671 (1996), to argue
that she incurred the entire amount of DMC’s bill when she accepted DMC’s medical treatment.
Farmers relies on this Court’s later opinion in Bombalski v Auto Club Ins Ass’n, 247 Mich App
536; 637 NW2d 251 (2001), to argue that Taylor only incurred the amount that Medicaid paid to
satisfy her bill with DMC.

In Shanafelt, the plaintiff was injured while getting into a vehicle. Shanafelt, 217 Mich
App at 628. The plaintiff’s no-fault insurer denied her claim, so the plaintiff’s health insurer paid
it. Id. at 629. On appeal, the no-fault insurer argued that the plaintiff never “incurred” any
expenses because her bills were “paid directly by her health insurer.” Id. at 636. To address this
argument, the Shanafelt Court turned to a dictionary to define the word “incur” because it was not
defined in the no-fault act. Id. at 638. The dictionary defined “incur” as “to become liable for.”
Id., quoting Random House Webster’s College Dictionary (1995). The Shanafelt Court reasoned
that the “plaintiff became liable for her medical expenses when she accepted medical treatment,”
and the fact that her health insurer paid for her medical expenses “does not alter the fact that she
was obligated to pay those expenses.” Shanafelt, 217 Mich App at 638.

In Bombalski, the plaintiff was injured in a motor vehicle collision, and despite being
eligible for no-fault benefits, the plaintiff’s health insurer covered his medical care. Bombalski,
247 Mich App at 538-539. The plaintiff’s health insurer did not pay the entire amount of the
plaintiff’s medical bill, however, and the plaintiff’s no-fault insurer argued in a motion for
summary disposition that it was only liable for the amount that the plaintiff’s health insurer paid
to satisfy the plaintiff’s medical bills. Id. at 539. The trial court agreed and accordingly limited
plaintiff’s recovery to the amount that his health insurer paid to the plaintiff’s medical providers
to satisfy the plaintiff’s bill. Id. at 540. On appeal, the plaintiff argued that the trial court erred by
limiting his recovery to what his health insurer paid rather than “the full amounts charged” by his
medical providers “when he accepted their services.” Id. at 540-541. To address this argument,
the Bombalski Court looked to Shanafelt’s definition of “incur” to mean “to become liable for,”
and explained that “liable” means “[r]esponsible or answerable in law; legally obligated.” Id. at

-4-
542-543 (quotation marks and citations omitted). With this understanding of “incur,” the
Bombalski Court reasoned:

The satisfaction of plaintiff’s medical bills by [the plaintiff’s health insurer] through
payment of less than the amounts charged by the providers relieved plaintiff of any
responsibility or legal obligation to pay the providers further amounts exceeding
those proffered by [the plaintiff’s health insurer] and accepted by plaintiff’s health
care providers. Because plaintiff bears no liability for the full medical service
amounts initially charged by his health care providers, he has not incurred these full
charges. [Id. at 543.]

After explaining why the public policy behind the no-fault act also supported this conclusion, id.
at 543-545, the Bombalski Court concluded

that in light of the ordinary meaning of incurred and the public policy behind the
no-fault act, incurred charges within MCL 500.3107(1)(a) do not encompass any
amounts (1) exceeding those that plaintiff’s health insurer actually paid in
satisfaction of plaintiff’s medical bills and (2) for which plaintiff no longer bears
legal responsibility. [Bombalski, 247 Mich App at 546.]

Bombalski thus built on the foundation laid in Shanafelt. The issue in Shanafelt was
whether a claimant “incurred” expenses if another insurer paid the claimant’s bill. This Court
explained that to “incur” means “to become liable for,” and the plaintiff in Shanafelt was clearly
liable for the medical bills that her health insurer paid—the reason why the plaintiff’s health insurer
paid the plaintiff’s bill was because the plaintiff was liable for it. Shanafelt, 217 Mich App at 638.
The issue in Bombalski was not whether a claimant “incurred” expenses that another insurer paid
but the extent to which a claimant “incurs” expenses if another insurer satisfies the claimant’s bill
for less than the billed amount. Bombalski built off of Shanafelt’s definition of “incur” and
explained that “liable” means “[r]esponsible or answerable in law; legally obligated,” so an
expense is “incurred” only to the extent that a claimant is responsible for paying it. Bombalski,
247 Mich App at 542-543. See also Farm Bureau Gen Ins v Blue Cross Blue Shield of Michigan,
314 Mich App 12, 22; 884 NW2d 853 (2015) (“When an insured has no legal responsibility for
disputed medical costs, those expenses are not ‘incurred’ by the insured within the meaning of
MCL 500.3107(1)(a), and they are not subject to payment by the no-fault insurer.”). If a medical
provider accepted less than the amount reflected in the claimant’s bill as satisfaction of the bill,
then that lesser amount was all that the claimant was truly responsible for paying, so the lesser
amount is the expense that the claimant “incurred.” Bombalski, 247 Mich App at 546.

Returning to the instant case, we agree with Farmers that Bombalski controls. Farmers
submitted DMC’s billing statements, which show that Taylor was charged $113,072.25 for
services that DMC performed between December 5, 2019 to December 8, 2019. Those same
billing statements reflect that DMC received a payment from Medicaid for $6,202.78 on January
17, 2020, after which DMC subtracted the remaining $106,869.47 balance from Taylor’s bill, so
she owed $0. This evidence established that Taylor’s bill was satisfied for $6,202.78, and Taylor
did not bear any responsibility for an amount in excess of that. Taylor’s argument that she incurred
the entire $113,072.25 charged by DMC, not just what Medicaid paid to satisfy her bill, runs
directly counter to Bombalski’s holding that “incurred charges” within the meaning of MCL

-5-
500.3107(1)(a) do not include amounts exceeding what was “actually paid in satisfaction of [the
claimant’s] medical bills” for which the claimant no longer bears responsibility. Bombalski, 247
Mich App at 546.

Taylor insists that she remains liable for the entire amount charged by DMC because the
Medicaid payment was not intended to satisfy Taylor’s bill, but nothing in the record supports that
assertion. That is, nothing in the record suggests that DMC is seeking to collect anything more
from Taylor to satisfy her bill. The affidavit of DMC’s billing specialist, Prevost, states that DMC
charged Taylor $113,072.25 for services that DMC performed between December 5, 2019 to
December 8, 2019; that DMC billed Medicaid and accepted Medicaid’s payment for Taylor’s
treatment; and that “[w]hen and if payment is received from [Farmers], DMC will reimburse
[Medicaid4] in the amount of $6,202.78.” Prevost’s affidavit does not state that Taylor remains
liable to DMC for any amount or that DMC plans to pursue Taylor for some unpaid amount of her
bill. This is presumably because, as Farmers’ evidence shows, Medicaid’s payment satisfied
DMC’s bill, and Taylor no longer owes DMC anything.

In sum, the evidence submitted by the parties leads to one conclusion: that DMC accepted
Medicaid’s payment as satisfaction of Taylor’s medical bill. Farmers submitted evidence showing
that, after DMC accepted Medicaid’s payment, DMC reduced the amount that Taylor was required
to pay on her bill to $0. In response to this evidence, Taylor failed to submit evidence creating a
question of fact whether Medicaid’s payment to DMC satisfied Taylor’s liability to DMC. Without
evidence that Taylor remains liable to DMC for any amount in excess of what Medicaid paid,
Farmers is correct that the only charges “incurred” by Taylor for services that DMC provided
between December 5, 2019 to December 8, 2019 is the amount paid by Medicaid. Farmers is
therefore only responsible for paying that amount under MCL 500.3107(1)(a). See Duckworth v
Continental Nat’l Indemnity Co, 268 Mich App 129, 136-137; 706 NW2d 215 (2005) (holding that
a plaintiff did not “incur” any charges within the meaning of MCL 500.3107(1)(a) for treatment
that the plaintiff received in Canada because the plaintiff received the treatment “free of charge”
under Canada’s nationalized healthcare program).

To be clear, we are not reaching the issue that the trial court reached: whether it would
hypothetically be legal for DMC to pursue additional recovery from Taylor after accepting
Medicaid’s payment. The trial court reasoned that DMC could not do so based on federal caselaw
prohibiting “balance billing,” which occurs when a medical provider accepts payment from
Medicaid, then seeks to recover from the patient the balance between the Medicaid payment and
the provider’s customary fee. See Spectrum Health Continuing Care Group v Anna Marie Bowling
Irrecoverable Tr, 410 F3d 304, 314 (CA 6, 2005). That prohibition stems from 42 USC
1396a(a)(25)(C), which federal courts have held prohibits not only balance billing but “substitute
billing.” Substitute billing occurs when a medical provider “already has accepted payment from
Medicaid but tries to refund the payment in order to bill the patient directly, usually because
Medicaid reimbursements are often much lower than the provider’s customary fees.” Robinett v
Shelby Co Healthcare Corp, 895 F3d 582, 587 (CA 8, 2018) (quotation marks, citation, and

4
Prevost’s affidavit mistakenly uses “Medicaid” and “Medicare” interchangeably.

-6-
alteration omitted). As the Eighth Circuit explained, these prohibitions “only become[] relevant
once the provider has billed Medicaid and accepted payment for services provided to a
beneficiary.” Id.5 As Taylor’s briefing highlights, there is tension between federal caselaw and
Michigan caselaw in this area. Namely, this Court has held that it is permissible for a medical
provider to bill Medicaid for a patient’s treatment, accept Medicaid’s payment on the bill, then
collect additional amounts on the same bill for the same treatment from the patient’s no-fault
insurer. See Hicks v Citizens Ins Co of Am, 204 Mich App 142, 146-147; 514 NW2d 511 (1994);
Botsford Gen Hosp v Citizens Ins Co, 195 Mich App 127, 137-138; 489 NW2d 137 (1992)
(rejecting the argument “that acceptance of Medicaid payments for injuries suffered in accidents
involving automobiles discharges an assigned claims servicing insurer from liability to the
claimant or the providers of medical services for charges exceeding the statutory amount paid by
Medicaid”). But see Sheeks v Farmers Ins Exch, 146 Mich App 361, 365; 379 NW2d 493 (1985)
(holding that a no-fault insurer did not have to pay more than what Medicaid paid to cover the
plaintiff’s claim because the “plaintiff’s health care providers must accept as payment in full the
Medicaid payments from the state”).

Instead of wading into this potentially-thorny area, we hold only that, based on the record
before us, there is no question of fact that DMC accepted Medicaid’s payment as satisfying
Taylor’s bill, and nothing in the record suggests that DMC is pursuing or plans to pursue additional
payment from Taylor.6 As this Court explained in Bombalski, “incurred charges” within the

5
With this understanding of the federal court’s interpretation of 42 USC 1396a(a)(25)(C), it is
worth briefly revisiting Prevost’s affidavit. In that affidavit, Prevost is careful to avoid stating how
much, if anything, Taylor (and by extension, Farmers) owed on Taylor’s bill following Medicaid’s
payment. If Prevost averred that DMC planned to refund Medicaid’s payment and expects to
recover from Taylor (through Farmers) the entire amount that DMC initially charged Taylor, it
could suggest that DMC was engaged in substitute billing. Prevost instead averred that “[w]hen
and if payment” of an unspecified amount “is received from” Farmers for an unspecified reason,
DMC would reimburse Medicaid.
6
In the cases relied upon by plaintiff on appeal, the medical providers were parties, and there was
no dispute that they were pursuing payment of their bills beyond what Medicaid paid. Compare
Hicks, 204 Mich App at 144 (explaining that it was consolidated with the hospital’s case against
the no-fault insurer); Oostdyk v Auto Owners Ins Co, unpublished per curiam opinion of the Court
of Appeals, issued December 30, 2014 (Docket No. 317221), p 4 (noting that the hospitals
intervened to collect payment in excess of what Medicaid paid); and Botsford Gen Hosp, 195 Mich
App at 130 (identifying the hospital as a plaintiff) with Bombalski, 247 Mich App 536 (the
healthcare provider who accepted an amount less than the amount billed to the patient as
satisfaction of the patient’s bill was not involved in the litigation). Given the potentially-serious
implications of deciding whether a medical provider is legally permitted to pursue additional
amounts from a no-fault insurer after accepting payment from Medicaid, we believe it prudent to
wait for a case in which a medical provider is clearly engaging in this practice before opining on
the issue, particularly because the medical provider may have a lot to say on the matter. Accord
Centria Home Rehab, LLC v Philadelphia Indem Ins Co, 345 Mich App 649, 668; 9 NW3d 104
(2023) (“By recognizing a healthcare provider’s ability to bring a claim against an insurer for the

-7-
meaning of MCL 500.3107(1)(a) do not include amounts exceeding what was “actually paid in
satisfaction of [the claimant’s] medical bills” for which the claimant “no longer bears legal
responsibility.” Bombalski, 247 Mich App at 546. So, Taylor only “incurred” charges in the
amount paid by Medicaid because that amount satisfied Taylor’s bill and absolved Taylor of all
legal responsibility for further payment, as evidenced by DMC’s billing statements. The amount
that Medicaid paid is therefore the amount that Farmers is responsible for paying under MCL
500.3107(1)(a).

We briefly address two other points raised by Taylor. First, Taylor observes that she does
not qualify for Medicaid because she has no-fault insurance. See Workman v Detroit Auto Inter-
Ins Exch, 404 Mich 477, 501-502; 274 NW2d 373 (1979). Whether Taylor qualifies for Medicaid
is irrelevant, however, because DMC accepted Medicaid’s payment as full satisfaction of Taylor’s
bill, and nothing suggests that DMC is pursuing further collection from Taylor. Second, Taylor
insists that there is a question of fact whether Medicaid’s payment to DMC constitutes the
reasonable and customary rate for DMC’s services. But this, too, is irrelevant because Taylor is
not entitled to allowable expenses beyond the charges she incurred. See MCL 500.3107(1)(a).

IV. CONCLUSION

We hold that the trial court did not err by granting Farmers’ motion for partial summary
disposition. As Farmers conceded in its motion for partial summary disposition and the trial court
recognized at the start of the parties’ hearing, Farmers is clearly liable for the amount that Medicaid
paid to satisfy Taylor’s bill. And for the reasons explained in this opinion, based on the record
evidence, there is no question of fact that Taylor did not “incur” allowable expenses beyond what
Medicaid paid, and Farmers is only responsible for paying that amount at this time. We expressly
decline to reach the issue of whether it would hypothetically be legal for DMC to collect additional
payment from Taylor beyond what Medicaid paid because there is no evidence that DMC has done
that or is planning to do so in this case. We therefore affirm the trial court, but on different grounds.

/s/ Christopher P. Yates
/s/ Colleen A. O’Brien
/s/ Kathleen A. Feeney

difference between what was billed and what was paid, claims concerning these amounts will be
most efficiently litigated by the parties with the pecuniary interest at stake.”).

-8-

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10844849. Public record. Not legal advice.