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STATE OF MICHIGAN 

COURT OF APPEALS 

ST. JOHN MACOMB OAKLAND HOSPITAL, 

 Plaintiff-Appellant, 

FOR PUBLICATION 

December 8, 2016 

9:00 a.m. 

v No. 329056 

Macomb Circuit Court 

STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY, 

LC No. 2014-002692-NF 

 Defendant-Appellee. 

Before: JANSEN, P.J., and CAVANAGH and BOONSTRA, JJ. 

JANSEN, P.J. 

 Plaintiff appeals as of right the order granting defendant’s motion for reconsideration and 

dismissing the case. We reverse and remand for further proceedings consistent with this opinion. 

I. FACTS AND PROCEDURAL HISTORY 

 This case arises from injuries sustained by the insured, Nuo Dusaj, during a December 9, 

2011 car accident. Dusaj maintained a policy of no-fault insurance with defendant, and he had 

coordinated no-fault insurance and health insurance. His no-fault policy provided that the nofault benefits would be reduced by an amount “paid or payable” under Dusaj’s health insurance 

plan. Dusaj suffered a closed head injury during the accident, and a physician recommended that 

Dusaj be admitted to plaintiff’s partial day hospitalization program for closed head injuries. 

Dusaj was admitted to the program, and plaintiff filed a claim with Dusaj’s health insurer, Blue 

Cross Blue Shield of Michigan (Blue Cross), for payment of benefits for services Dusaj received 

starting on May 6, 2013. 

 On November 14, 2013, Magellan Behavioral of Michigan, Inc. (Magellan), which was 

authorized to administer Blue Cross’s mental health program, sent a letter to Dusaj, informing 

him that the partial hospitalization treatment was not medically necessary and that Magellan was 

unable to authorize the treatment. The letter explained that a physician advisor, who is a board 

certified psychiatrist, came to that determination after reviewing the medical record. The letter 

further indicated that an internal appeal was available as the first step in the appeals process and 

that a patient, provider, or facility may request an appeal. 
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 An attached document detailed the provider appeal rights. The document explained that a 

provider may request an internal appeal within 180 days after receipt of the denial letter and that 

a determination would be made within 30 calendar days. The document indicated that “[i]f 

treatment services are imminent or ongoing, or the patient’s condition is unstable or emergent, an 

expedited appeal may be requested verbally and conducted telephonically. . . . We reply to 

urgent appeals within the lesser of one business day or 72 hours.” The document further stated 

that if the provider disagrees with the internal appeal determination, the provider may request an 

external review within 30 calendar days of the appeal decision letter. An independent review 

organization would then review the request, and the provider would be notified of the decision 

within 30 days of the receipt of the request. 

 On January 9, 2014, a representative for plaintiff sent a letter to Magellan, indicating that 

a similar denial letter was needed with regard to an October 22, 2012 partial hospitalization 

admission in order for plaintiff to request that defendant pay for the partial hospitalization 

treatment related to the October 22, 2012 admission. 

 After seeking payment from defendant, plaintiff filed a complaint in the trial court, 

contending that defendant breached the no-fault contract by refusing to pay no-fault benefits for 

the medical services plaintiff provided to Dusaj. Defendant filed a motion for summary 

disposition under MCR 2.116(C)(10), contending that plaintiff failed to make reasonable efforts 

to obtain payment from Blue Cross/Magellan. Defendant argued that plaintiff failed to provide 

any evidence regarding what plaintiff submitted to Blue Cross/Magellan or that plaintiff sought 

an appeal of the medical necessity determination. 

 Plaintiff filed a response opposing defendant’s motion for summary disposition, in which 

plaintiff contended that its January 9, 2014 follow-up letter to Magellan demonstrated that it 

made reasonable efforts, but that Blue Cross/Magellan refused to pay for the services. The court 

issued an opinion and order denying defendant’s motion for summary disposition on the basis 

that there was a genuine issue of material fact on the issue of reasonable efforts. The court 

reasoned as follows: 

 Defendant, in effect, argues that plaintiff has just not tried hard enough to 

convince [Blue Cross] to pay for the medical treatments, and in this regard is 

therefore not entitled to benefits from State Farm. It appears that plaintiff hospital 

was not convinced that [Blue Cross]/Magellan’s multi-tiered appeal process was 

going to net them any beneficial results. Plaintiff was not seeking duplicative 

coverage, and it made reasonable efforts to obtain payments from [Blue 

Cross]/Magellan to no avail. The Court finds a question of fact as to whether 

plaintiff hospital made reasonable efforts to obtain payments, and whether the 

multi-tiered review and appeal process could be considered beyond reasonable. 

 Defendant subsequently filed a motion for reconsideration, arguing that plaintiff failed to 

submit evidence showing that it made reasonable efforts to obtain payment from Blue 

Cross/Magellan and contending that the court’s prior opinion improperly shifted the burden of 

proof onto defendant to demonstrate that Blue Cross/Magellan made an incorrect determination 

and that Blue Cross’s policy should cover plaintiff’s claim. The court agreed, and in a two-page 

opinion and order, the court determined that it had improperly shifted the burden of proof onto 
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defendant and that plaintiff failed to present any evidence demonstrating that it made reasonable 

efforts to obtain payment from Blue Cross/Magellan. Therefore, the court granted the motion for 

reconsideration and dismissed the case. 

II. STANDARD OF REVIEW 

 We review for an abuse of discretion a trial court’s decision on a motion for 

reconsideration. Frankenmuth Ins Co v Poll, 311 Mich App 442, 445; 875 NW2d 250 (2015). “ 

‘An abuse of discretion occurs when the trial court’s decision falls outside the range of 

reasonable and principled outcomes.’ ” Id. (citation omitted). We review de novo the trial 

court’s ruling on a motion for summary disposition. Id. “The trial court properly grants a 

motion for summary disposition under MCR 2.116(C)(10) when there is no genuine issue of 

material fact and the moving party is entitled to judgment as a matter of law.” Id. 

When a motion under subrule (C)(10) is made and supported as provided in this 

rule, an adverse party may not rest upon the mere allegations or denials of his or 

her pleading, but must, by affidavits or as otherwise provided in this rule, set forth 

specific facts showing that there is a genuine issue for trial. If the adverse party 

does not so respond, judgment, if appropriate, shall be entered against him or her. 

[MCR 2.116(G)(4).] 

III. REASONABLE EFFORTS STANDARD 

 The issue presented in this case is whether plaintiff supplied evidence that it made 

reasonable efforts to obtain payments that were available from Blue Cross/Magellan before 

seeking benefits from defendant. Specifically, the parties dispute whether plaintiff was required 

to appeal Blue Cross/Magellan’s medical necessity determination before seeking payment from 

defendant. Plaintiff argues that the trial court abused its discretion when it granted defendant’s 

motion for reconsideration and dismissed the case, and that plaintiff was not required to appeal 

the denial of its claim for health insurance benefits. We agree. 

 The trial court dismissed the case following reconsideration of its opinion and order 

denying defendant’s motion for summary disposition. MCR 2.119(F), the court rule governing 

motions for reconsideration, provides: 

 (1) Unless another rule provides a different procedure for reconsideration 

of a decision . . . a motion for rehearing or reconsideration of the decision on a 

motion must be served and filed not later than 21 days after entry of an order 

deciding the motion. 

 (2) No response to the motion may be filed, and there is no oral argument, 

unless the court otherwise directs. 

 (3) Generally, and without restricting the discretion of the court, a motion 

for rehearing or reconsideration which merely presents the same issues ruled on 

by the court, either expressly or by reasonable implication, will not be granted. 

The moving party must demonstrate a palpable error by which the court and the 
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parties have been misled and show that a different disposition of the motion must 

result from correction of the error. 

 The issue in this case is governed by the no-fault act, MCL 500.3101 et seq. MCL 

500.3105(1) provides, “Under personal protection insurance an insurer is liable to pay benefits 

for accidental bodily injury arising out of the ownership, operation, maintenance or use of a 

motor vehicle as a motor vehicle, subject to the provisions of this chapter.” MCL 500.3107(1)(a) 

adds, in part, that personal protection insurance (PIP) benefits are 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.” 

 MCL 500.3109a provides that an individual may coordinate his no-fault insurance policy 

and health insurance policy at a reduced premium rate. MCL 500.3109a; Farm Bureau Gen Ins 

Co v Blue Cross Blue Shield of Mich, 314 Mich App 12, 21; 884 NW2d 853 (2015). “The intent 

of [MCL 500.3109a] is to eliminate duplicative recovery for services and to contain insurance 

and healthcare costs.” Farm Bureau, 314 Mich App at 21. When an individual chooses to 

coordinate his no-fault coverage and health insurance coverage, the health insurer becomes 

primarily liable for medical expenses. Id. In that circumstance, the no-fault insurer is not liable 

for the medical expenses that the health insurer is required to pay for or provide. Tousignant v 

Allstate Ins Co, 444 Mich 301, 303; 506 NW2d 844 (1993). Thus, the individual is required to 

obtain payment from the health insurer “to the extent of the health coverage available from the 

health insurer.” Id. at 307 (emphasis added). Our Supreme Court has stated that the term 

“payable,” which appears in the no-fault contract at issue in this case, is the functional equivalent 

of the phrase “required to be provided.” Id. at 312. In Tousignant, our Supreme Court cited its 

previous decision in Perez v State Farm Mut Auto Ins Co, 418 Mich 634, 645; 344 NW2d 773 

(1984), for the proposition that the phrase “required to be provided” “means that the injured 

person is obliged to use reasonable efforts to obtain payments that are available.” Id. (quotation 

marks omitted). Thus, a plaintiff must make reasonable efforts to obtain payments that are 

available from the health insurer in order for the plaintiff to establish that the benefits are not 

payable by the health insurer. See id. 

 The parties dispute what actions plaintiff was required to take in order to establish that it 

made reasonable efforts to obtain payment from Blue Cross. In Tousignant, the plaintiff 

coordinated her no-fault insurance with her health insurance, which was provided through a 

health maintenance organization (HMO). Tousignant, 444 Mich at 303-304. The plaintiff 

sought treatment outside of her HMO plan. Id. at 305. The no-fault insurer informed the 

plaintiff that it would only cover medical care by a physician outside of the HMO if a physician 

within the HMO referred her to the out-of-network physician. Id. The plaintiff did not contend 

that necessary care was unavailable. Id. The no-fault insurer refused to pay for the services, 

contending that the services were required to be provided by the HMO. Id. Our Supreme Court 

concluded that because the plaintiff did not claim that the HMO would not or could not provide 

the medical care she needed, there was no basis for concluding that the benefits were not 

required to be provided by the health insurer. Id. at 312-313. 

 The Court’s decision in Tousignant suggests that a plaintiff must take some action toward 

receiving payment from the health insurer before seeking payment from the no-fault insurer. 

However, the Court did not specify the exact actions that a plaintiff must take in order to 
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establish that the plaintiff made reasonable efforts to obtain payment from the health insurer. 

The plaintiff in Tousignant made no efforts to obtain available benefits from her HMO, thus

leading our Supreme Court to hold that there was no basis to conclude that the benefits were not 

available. See Tousignant, 444 Mich at 312-313. In contrast, in this case, plaintiff did attempt to 

obtain payment of medical expenses when it filed a claim with Blue Cross/Magellan. The denial 

letter indicates that plaintiff submitted medical records to Blue Cross/Magellan, which a 

physician reviewed in determining that the treatment was not medically necessary. There is no 

indication that plaintiff failed to follow the proper procedure for filing the claim. Following the 

denial of the claim, plaintiff contended that the partial day hospitalization treatment was 

unavailable because Blue Cross/Magellan denied its claim under a medical necessity standard. 

Plaintiff did not seek duplicative recovery from Blue Cross and defendant, but instead, sought to 

obtain payment from the insured’s no-fault insurer after the insured’s health insurer denied 

payment. Accordingly, we conclude that plaintiff made reasonable efforts to obtain payment 

from Blue Cross/Magellan and that plaintiff was not required to appeal the medical necessity 

determination in order to establish that it made reasonable efforts to obtain payments that were 

available from the health insurer. 

 We find that the reasoning in this Court’s recent opinion in Adanalic v Harco Nat’l Ins 

Co, 309 Mich App 173, 176-178; 870 NW2d 731 (2015), applies in this context. In Adanalic, 

this Court decided the issue whether a no-fault insurer was excused from paying benefits because 

the plaintiff had a workers’ compensation claim that he could pursue even after an initial denial 

of workers’ compensation benefits. Id. at 184-185. Both the no-fault insurer and the workers’ 

compensation insurer denied the plaintiff benefits for his injuries. Id. at 178. The relevant 

statute at issue in the case provided that when workers’ compensation benefits are available to an 

employee sustaining an injury in the course of employment, then no-fault benefits are not 

available. Id. at 186. 

 Although the issue in Adanalic did not involve the reasonable efforts standard, this Court 

briefly discussed the reasonable efforts requirement, stating that the standard “ ‘does not, in light 

of the underlying purpose of the no-fault act, call for a potentially lengthy and costly effort . . . .’ 

” Adanalic, 309 Mich App at 186 n 8, quoting Perez, 418 Mich at 650.1

 This statement leads us 

to conclude that a plaintiff does not need to engage in the potentially lengthy and costly effort of 

challenging a medical necessity determination in order to obtain health insurance benefits before 

proceeding to obtain payment from the no-fault insurer. 

 Further, in determining whether the no-fault insurer was responsible for payment of the 

plaintiff’s expenses, this Court reasoned as follows: 

 

1

 Although Adanalic involved workers’ compensation benefits, our Supreme Court in Tousignant 

cited its earlier decision in Perez in articulating the reasonable efforts standard, suggesting that 

the standard is the same in both contexts. See Tousignant, 444 Mich at 312; Perez, 418 Mich at 

645-646 (opinion by LEVIN, J.). 
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 Both the workers’ compensation system and the no-fault system are 

intended to provide limited, but prompt payment of benefits to injured persons in 

order to assure medical care, rehabilitation, and income replacement. It is [the nofault insurer’s] position that when the employer and the no-fault insurer disagree 

on which of these two systems is primarily applicable, the injured person is to 

receive no benefits at all until each of the two insurers is satisfied that its assertion 

of denial has been fully adjudicated. We reject the notion that because an 

individual may be covered by two broad systems of insurance, he is not entitled to 

any benefits whatsoever for however long it takes to adjudicate a dispute about 

which system is obligated to provide benefits. Indeed, requiring an employee to 

engage in lengthy workers’ compensation litigation before being paid PIP benefits 

“is wholly inadequate to accomplish the no-fault act’s purpose of providing 

assured, adequate, and prompt recovery for economic loss arising from motor 

vehicle accidents.” [Adanalic, 309 Mich App at 187 (citation omitted; emphasis 

added).] 

This Court went on to explain that the term “available” was used in order to prevent duplicative 

recovery under both workers’ compensation and no-fault insurance, and that there was no 

duplicative recovery because the plaintiff was denied workers’ compensation benefits. Id. at 

188. Accordingly, this Court concluded that workers’ compensation benefits were not available 

and that the plaintiff’s no-fault insurer was not entitled to withhold payment of PIP benefits. Id. 

at 189. 

 Although this Court’s decision in Adanalic involved workers’ compensation benefits, its 

reasoning applies equally in this case. As in Adanalic, plaintiff did not receive payment because 

neither insurer took responsibility for payment of the insured’s medical expenses. The purpose 

of the no-fault act cannot be met by requiring an injured person to engage in a potentially lengthy 

appeals process with the health insurance company. Defendant’s position would prevent an 

injured person from receiving benefits from the no-fault insurer until the insured adjudicated the 

health insurer’s denial. This is entirely at odds with the policy underlying the no-fault act to 

ensure prompt payment for economic losses. Further, the purpose of the coordinated benefits 

statute is to prevent duplicative recovery, and plaintiff would not receive benefits from two 

sources in this case because Blue Cross/Magellan denied plaintiff’s claim. Therefore, we 

conclude that a plaintiff is not required to appeal a health insurer’s medical necessity 

determination in order to establish that reasonable efforts were made to obtain payment from the 

health insurer. 

 Defendant relies, in large part, on this Court’s recent decision in Farm Bureau for the 

proposition that plaintiff was required to appeal the denial. In Farm Bureau, the insured, Judy 

Klein, received skilled-nursing services from Spectrum Health Rehab and Nursing Center 

(Spectrum). Farm Bureau, 314 Mich App at 14. Klein’s health insurer was Blue Cross, and 

Blue Cross had a participation agreement with Spectrum under which Spectrum assumed 

financial responsibility for the services that it provided to the insured. Id. The agreement 

required Spectrum to follow Blue Cross’s preauthorization requirements and detailed the appeals 

process for an initial denial of a preauthorization request. Id. at 16. Blue Cross approved and 

paid for 14 days of skilled-nursing treatment, but denied Spectrum’s request for additional time. 
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Id. at 14-15. Instead of appealing that decision, Spectrum submitted the claim to Farm Bureau, 

which was Klein’s no-fault insurer. Id. at 15. Farm Bureau paid under protest. Id. 

 This Court concluded that under the “unique circumstances” in the case involving 

Spectrum’s assumption of liability for the medical expenses, neither the no-fault insurer nor the 

health insurer was responsible for payment of the medical expenses. Farm Bureau, 314 Mich 

App at 20-21. This Court explained that the provisions in the agreement between Blue Cross and 

Spectrum were dispositive because Spectrum had agreed to assume full financial responsibility 

for claims that were denied as medically unnecessary, unless the insured accepted financial 

responsibility in writing. Id. at 23. This Court explained that “with respect to Farm Bureau, the 

effect of Spectrum’s participating provider agreement is to relieve Klein from responsibility for 

paying for Spectrum’s services, and, because Klein has no legal responsibility for the medical 

costs, Farm Bureau has no obligation to pay for these expenses under MCL 500.3107(1)(a).” Id. 

 This Court noted, during its discussion of the issue, that although there were mechanisms 

permitting Klein or Spectrum to contest the denial of the preauthorization request, neither Klein 

nor Spectrum challenged the denial. Farm Bureau, 314 Mich App at 24. Indeed, the evidence in 

the record suggested that Spectrum did not seek an appeal of the denial because there was a 

secondary insurer. Id. at 24 n 3. This Court explained, “Spectrum’s decision not to contest Blue 

Cross’s medical necessity denial and its decision not to seek preapproval at a later time does not, 

without the assumption of liability by Klein, render Farm Bureau liable as a secondary payer.” 

Id. at 24-25. Instead, since Klein did not have any legal responsibility for the payment, the 

payment was not “incurred” by her, and Farm Bureau was not liable as Klein’s no-fault insurer. 

Id. at 25. 

Farm Bureau does not control the outcome in this circumstance because the dispositive 

fact in Farm Bureau was Spectrum’s contract with Blue Cross. This Court concluded that 

because Spectrum contracted with Blue Cross to assume financial liability for the claim, the 

insured party did not “incur” the expense, and, therefore, Farm Bureau was not liable for the 

expense under MCL 500.3107(1)(a). Farm Bureau, 314 Mich App at 23. In contrast, there is no 

indication that plaintiff had a similar participation agreement with Blue Cross or Magellan 

indicating that plaintiff would assume full financial responsibility for medical services deemed 

medically unnecessary. Although this Court in Farm Bureau mentioned the fact that Spectrum 

did not appeal the medical necessity determination, this Court’s discussion of the issue pertained 

to the fact that Spectrum could have attempted to avoid liability under the provider agreement by 

seeking an appeal of Blue Cross’s decision. Id. at 24 n 3. This Court did not suggest that an 

insured person or a provider must seek an appeal of a health insurer’s decision in order to pursue 

payment from a no-fault insurer. Instead, the holding of Farm Bureau is limited to the “unique 

circumstance” of the provider agreement between Spectrum and Blue Cross. Accordingly, Farm 

Bureau does not require that an individual or a provider appeal a medical necessity determination 

in order to establish that reasonable efforts were made to obtain payments that were available 

from the health insurer. 

IV. MOTION FOR RECONSIDERATION 

 We conclude that the trial court abused its discretion by granting the motion for 

reconsideration. The court improperly concluded that it shifted the burden of proof onto 
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defendant in its previous opinion. Instead, in its initial opinion and order, the court noted that 

plaintiff presented evidence regarding whether it made reasonable efforts to obtain payment from 

Blue Cross/Magellan. The trial court’s initial conclusions did not constitute improper burden 

shifting. The court also erroneously concluded, without explanation, that plaintiff failed to 

present evidence establishing that it made reasonable efforts to obtain payment from Blue 

Cross/Magellan. Contrary to the trial court’s determination, plaintiff presented evidence 

establishing that it sought payment from Blue Cross/Magellan and that its claim for benefits was 

denied on the basis that the treatment was not medically necessary. We therefore conclude that 

plaintiff presented sufficient evidence to establish that it made reasonable efforts to obtain 

payment from Blue Cross/Magellan. We further conclude that plaintiff was not required to 

present evidence that it appealed the denial in order to establish that it made reasonable efforts to 

obtain payment from Blue Cross/Magellan. To conclude otherwise would be contrary to the 

purpose of the no-fault act to provide for assured, adequate, and prompt recovery for economic 

losses stemming from motor vehicle accidents. 

 Reversed and remanded for further proceedings consistent with this opinion. We do not 

retain jurisdiction. 

/s/ Kathleen Jansen 

/s/ Mark J. Cavanagh 

/s/ Mark T. Boonstra