Beyond the Holding: The Questions Canty v. Mason Leaves Behind
Every once in a while, the Michigan Supreme Court decides a case that answers one question while quietly raising several others. Canty v. Mason may be one of those decisions.
At first glance, Canty appears to be a fairly straightforward case interpreting Michigan’s 2019 no-fault reforms. A closer look, however, reveals a much larger discussion about how Michigan intended medical expenses to be allocated after the Legislature fundamentally changed the no-fault system.
The Facts
Following the 2019 reforms, certain Medicare beneficiaries were given a choice. Rather than purchasing Personal Protection Insurance (PIP) medical coverage, they could opt out of PIP entirely if they maintained qualifying Medicare coverage. In exchange, they paid lower insurance premiums.
The plaintiff in Canty made exactly that election.
After being injured in an automobile accident, he pursued a third-party negligence claim against the at-fault driver for his medical expenses. The defendant argued that because the plaintiff had Medicare, he was required to seek payment through Medicare and that any recovery should be limited accordingly.
The Supreme Court’s Decision
The Court reached what many will view as a split decision.
First, the Court unanimously held that a plaintiff who elected Medicare instead of PIP still has a duty to mitigate damages. In practical terms, that means the plaintiff must make reasonable efforts to obtain payment through Medicare for Medicare-covered treatment.
Second, the Court held that the reimbursement limitations contained in MCL 500.3157 apply only to PIP claims—not to third-party tort actions. According to the majority, while Medicare remains relevant to mitigation, the statutory fee schedule enacted as part of the 2019 reforms does not cap tort damages.
That is likely the portion of the opinion that will generate the most discussion.
The Questions I Keep Coming Back To
What happens if providers know there is a valuable tort case?
Imagine two patients. Both have Medicare. Both suffer identical injuries. Both receive identical treatment from the same Medicare-participating provider.
The first patient has no lawsuit. The provider bills Medicare exactly as expected.
The second patient has a significant negligence claim. Instead of billing Medicare, the provider simply waits while litigation proceeds. Would the medical provider be able to recover substantially higher billed charges through the tort case?
In other words, should the existence of a tort defendant change the amount recoverable for identical Medicare-covered treatment?
I’m not suggesting that this is what providers are doing. Nor am I suggesting that a different specific approach is necessarily the correct legal answer.
But I do think the hypothetical exposes the policy question underlying Canty.
One purpose of insurance systems is to allocate losses predictably. If parties bypass that system because another source of payment may exist, those incentives can begin producing results the Legislature may never have anticipated.
Why This Decision Matters
The real importance of Canty extends beyond Medicare.
The decision illustrates the continuing challenge courts face in interpreting Michigan’s 2019 no-fault reforms. Those reforms shifted costs between PIP insurers, health insurers, tort defendants, medical providers, and injured individuals. Unsurprisingly, difficult questions continue to emerge as courts attempt to reconcile those competing systems.
Whether the Legislature intended every consequence identified by the majority and the separate opinions remains open for debate.
One thing is certain: Canty will become an important case for anyone litigating automobile negligence cases involving Medicare beneficiaries who elected to opt out of PIP coverage.
As with many Supreme Court decisions, the holding answers today’s question. The policy debate it leaves behind may shape tomorrow’s.
