Spectrum Health Hospitals v. Farm Bureau Mutual Insurance Company

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

SPECTRUM HEALTH HOSPITALS, FOR PUBLICATION
September 3, 2020
Plaintiff-Appellee, 9:05 a.m.

v No. 347553
Kent Circuit Court
FARM BUREAU MUTUAL INSURANCE LC No. 17-007661-NF
COMPANY OF MICHIGAN,

Defendant,
and

FARM BUREAU GENERAL INSURANCE
COMPANY OF MICHIGAN,

Defendant-Appellant.

SPECTRUM HEALTH HOSPITALS,

Plaintiff-Appellant,

v No. 348440
Kent Circuit Court
FARM BUREAU MUTUAL INSURANCE LC No. 17-007661-NF
COMPANY OF MICHIGAN,

Defendant,
and

FARM BUREAU GENERAL INSURANCE
COMPANY OF MICHIGAN,

Defendant-Appellee.

-1-
Before: TUKEL, P.J., and MARKEY and GADOLA, JJ.

MARKEY, J.

In this dispute involving personal protection insurance (PIP) benefits under the no-fault
act, MCL 500.3101 et seq., defendant Farm Bureau General Insurance Company paid 80% of the
charges billed by plaintiff Spectrum Health Hospitals but refused to pay the full amount on the
basis that charges exceeding 80% of the total amount billed were “unreasonable.” Spectrum filed
suit, seeking payment of the balance. The trial court denied Farm Bureau’s motion in limine
regarding, primarily, the relevance of evidence pertaining to payments by third-party payers such
as health insurers, Medicare, and Medicaid, concluding categorically that this evidence was not
pertinent to the question whether Spectrum’s charges were reasonable within the meaning of the
no-fault act. Thereafter, the parties entered into a consent judgment, preserving Farm Bureau’s
right to challenge the trial court’s ruling on its motion in limine. Subsequently, the trial court
entered an order denying Spectrum’s request for attorney fees under the attorney-fee penalty
provision of the no-fault act, MCL 500.3148. In Docket No. 347553, Farm Bureau appeals by
right, challenging the trial court’s earlier decision on the motion in limine. In Docket No. 348440,
Spectrum appeals by right the denial of its request for attorney fees. The appeals have been
consolidated by this Court.1 We reverse in Docket No. 347553, which also requires us to reverse
in Docket No. 348440, and remand for further proceedings.

I. BACKGROUND FACTS AND PROCEDURAL HISTORY

On August 22, 2016, Brett Sabby suffered bodily injuries in a motor vehicle accident that
occurred when the car in which he was a passenger left the road and struck a tree. As a result of
the accident, Sabby received medical care and treatment at Spectrum. Many of the medical records
available to us on appeal have been heavily redacted. But from the available information, it
appears that, among other injuries, Sabby suffered a femur fracture, a complex open ankle fracture,
broken ribs, a knee laceration, and a “Roy-Camille type III sacral U fracture.” From the redacted
billing-related documents, it also appears that Sabby’s treatment included surgery, laboratory tests,
x-rays, implants, physical therapy, “recovery room” services, and pharmacy services. For
treatment and services provided between August 22, 2016, and September 2, 2016, Spectrum’s
charges totaled $225,279.10.

Farm Bureau was responsible for providing Sabby with PIP benefits under the no-fault act.
Spectrum submitted Sabby’s bills to Farm Bureau for payment, but Farm Bureau only partially
paid the bills. In total, Farm Bureau paid Spectrum $180,223.27, or 80% of the total requested,
leaving an unpaid balance of $45,055.83. In denying full payment, Farm Bureau maintained that
any charges in excess of 80% of Spectrum’s gross charges were unreasonable within the meaning
of the no-fault act. Accordingly, Farm Bureau refused to pay any more than 80% of Spectrum’s
total charges. In denial letters dated October 14, 2016, Farm Bureau more fully explained its
reasons as follows:

1
Spectrum Health Hosps v Farm Bureau Mut Ins Co, unpublished order of the Court of Appeals,
entered April 16, 2019 (Docket Nos. 347553 & 348440).

-2-
 Based on recent court rulings, Farm Bureau understands that in cases not
involving insurance your hospital customarily discounts gross charges by twenty
percent if payment is made within ninety days of the date the charges are billed. In
those cases, the courts have ruled that under MCL 500.3157, charges to no-fault
insureds may not exceed eighty percent of gross charges if payment is made within
ninety days. Farm Bureau is making payment within thirty one days of the date the
charges have been billed. . . .

Furthermore, based on our own investigation, charges in excess of eighty
percent of gross charges are charges in excess of reasonable charges. Because under
MCL 500.3107(1)(a) and 3157 a hospital’s charge to a no-fault insured may not
exceed a reasonable charge, this is an additional reason why no-fault benefits are
not owed for charges in excess of eighty percent of gross charges.

On August 22, 2017, Spectrum filed the current lawsuit against Farm Bureau.2 Spectrum
sought (1) payment of Sabby’s benefits under the no-fault act, (2) a declaratory judgment to the
effect that Farm Bureau was liable for payment of Sabby’s no-fault benefits, (3) a declaratory
judgment providing that Farm Bureau’s practice of unilaterally paying only 80% of a claim was
unreasonable and violative of the no-fault act, and (4) an award of prefiling interest, costs, and
attorney’s fees pursuant to MCL 500.3142, MCL 500.3148, MCL 600.6013, and MCR 2.625. In
its answer to Spectrum’s complaint, Farm Bureau denied that it had any outstanding liability for
no-fault benefits. According to Farm Bureau, Spectrum’s total charges were in “excess of
reasonable charges;” therefore, Farm Bureau did not owe any additional amount.

The parties’ arguments regarding the reasonableness of Spectrum’s charges and how
reasonableness should generally be determined focus primarily on MCL 500.3157, MCL
500.3158, and MCL 500.3159.3 Relevant to the parties’ arguments, MCL 500.3157 provided:

A physician, hospital, clinic or other person or institution lawfully rendering
treatment to an injured person for an accidental bodily injury covered by personal
protection insurance, and a person or institution providing rehabilitative
occupational training following the injury, may charge a reasonable amount for
the products, services and accommodations rendered. The charge shall not exceed

2
Sabby was not a party to the case, but Spectrum obtained an assignment from Sabby. And the
parties entered into a consent judgment, agreeing that Spectrum was an assignee on the basis of a
“valid assignment” of rights. Given the valid assignment, there is no dispute on appeal that
Spectrum was permitted to pursue Sabby’s no-fault benefits for medical services provided in 2016.
3
With the enactment of 2019 PA 21, the Legislature substantially amended portions of the no-
fault act, including MCL 500.3157, effective June 11, 2019. Spectrum, however, commenced the
current case before the effective date of the amendment, meaning that this case is controlled by the
former provisions of the no-fault act. See George v Allstate Ins Co, __ Mich App __, __; __ NW2d
__ (2019); slip op at 3 n 3. Unless otherwise noted, references to the no-fault act are to the version
in effect at the time this action was commenced.

-3-
 the amount the person or institution customarily charges for like products, services
and accommodations in cases not involving insurance. [Emphasis added.]

MCL 500.3158(2) states:

A physician, hospital, clinic or other medical institution providing, before
or after an accidental bodily injury upon which a claim for personal protection
insurance benefits is based, any product, service or accommodation in relation to
that or any other injury, or in relation to a condition claimed to be connected with
that or any other injury, if requested to do so by the insurer against whom the claim
has been made, (a) shall furnish forthwith a written report of the history, condition,
treatment and dates and costs of treatment of the injured person and (b) shall
produce forthwith and permit inspection and copying of its records regarding the
history, condition, treatment and dates and costs of treatment.

And finally, MCL 500.3159 provides:

In a dispute regarding an insurer’s right to discovery of facts about an
injured person’s earnings or about his history, condition, treatment and dates and
costs of treatment, a court may enter an order for the discovery. The order may be
made only on motion for good cause shown and upon notice to all persons having
an interest, and shall specify the time, place, manner, conditions and scope of the
discovery. A court, in order to protect against annoyance, embarrassment or
oppression, as justice requires, may enter an order refusing discovery or specifying
conditions of discovery and may order payments of costs and expenses of the
proceeding, including reasonable fees for the appearance of attorneys at the
proceedings, as justice requires.

During discovery, Farm Bureau sought documents and information from Spectrum on
matters that Farm Bureau asserted related to the reasonableness of Spectrum’s charges for Sabby’s
care and treatment within the meaning of the no-fault act. Farm Bureau requested information
concerning (1) the average annual increase in Spectrum’s charges and (2) whether charges for
uninsured persons were the same as for individuals with no-fault insurance. With respect to
Sabby’s charges more specifically, Farm Bureau sought information regarding (1) the amount
generally billed for the same care for the same dates of service, (2) the 115% Medicare rate for
this care, and (3) the rates Priority Health and Blue Cross/Blue Shield each paid for such care.
Farm Bureau also asked whether Spectrum compared its charges to other hospitals, and, if so,
whether the charges were comparable. Additionally, Farm Bureau requested that Spectrum
produce financial records for the 2015 to 2016 fiscal year, including (1) Spectrum’s federal
Hospital and Hospital Health Care Complex Cost Reports, (2) Spectrum’s IRS Form 990, (3)
Spectrum’s Audited Financial Statements, (4) Spectrum’s Financial Assistance Policy, and (5)
various documents related to billing and collection.

Spectrum objected to many, though not all, of these requests on the grounds that the
information was “irrelevant and not reasonably calculated to lead to discovery of admissible
evidence.” Briefly stated, Spectrum indicated that, to support its charges at issue in this case,
Spectrum “anticipate[d] that it will rely on its billing and medical records related to the dates of

-4-
service at issue . . . as well as its financial statements and comparative charge data for the years in
dispute.”

Relevant to its claim that the charges were unreasonable, on the same date that Farm Bureau
filed its answer in this case, Farm Bureau also filed an initial witness list, which included, among
other witnesses, Mark A. Hall, who was identified as an expert witness. Farm Bureau then filed a
motion in limine to qualify Hall as an expert in “health services research” specifically related to
healthcare costs. In its motion in limine, Farm Bureau did not present Hall’s opinions on the
charges related to Sabby in particular. Rather, Farm Bureau offered Hall’s general opinions on
healthcare costs and the opinions he provided in unrelated cases.

In moving to qualify Hall as an expert and in explaining the relevance of his testimony,
Farm Bureau asserted that the no-fault act did not define the term “reasonableness,” and in the
absence of a definition, the courts should look to the open market, just as courts look to the open
market when deciding valuation questions in other contexts. But, on the basis of Hall’s opinions,
Farm Bureau also maintained that open-market rates could not be determined by looking solely at
gross charges or even gross charges customary in the industry. Instead, quoting Hall, Farm Bureau
asserted:

“[T]he market for the prices in medical services is not an effective or
functioning market unless patients are represented by an insurance company. If
patients seek care outside of their insurance network or if they don’t have healthcare
insurance, then they’re left to whatever doctors and hospitals want to charge and
they’re not in an effective position to negotiate.

So if one is looking for sort of effective market or competition constraint
prices, one needs to look in the part of the market in which insurance companies
and government agencies negotiate over prices and not at the part of the market
where patients are left to their own devices.”

In addition to the amounts paid on the open market, Farm Bureau also asserted that
reasonableness should be determined by considering (1) costs to the hospital in providing
treatment, including specifically the hospital’s cost-to-charge ratio, and (2) “the amount generally
billed”4 for the services. Furthermore, Farm Bureau asserted that Hall should be qualified as an
expert on healthcare costs and that he should be allowed to offer an opinion on the reasonableness
of charges. In making this argument, Farm Bureau emphasized that, in an unrelated case, the
Kalamazoo Circuit Court qualified Hall as an expert on these topics after conducting a Daubert5
hearing. Ultimately, Farm Bureau’s motion in limine asked the trial court:

4
The “amount generally billed” is a specific figure that hospitals must calculate for tax purposes.
5
Daubert v Merrell Dow Pharmaceuticals, Inc, 509 US 579; 113 S Ct 2786; 125 L Ed 2d 469
(1993).

-5-
 1. For a ruling qualifying Defendants’ expert, Mark Hall.

2. For a ruling that the No-Fault Act does not define what is a
reasonable charge and the normal rules of evidence apply.

3. For a ruling that what is paid on the open market is relevant to the
reasonableness of the gross charge.

4. For a ruling that evidence of payment rates of payers other than no-
fault insurers are relevant to the reasonableness of Spectrum’s gross charges.

5. For a ruling that Spectrum’s ratio of costs to charges is relevant to
the issue of the reasonableness of the gross charge.

6. For a ruling that the amount generally billed is relevant,
discoverable, and admissible with regard to the reasonableness of the gross charge.

Spectrum filed a response to Farm Bureau’s motion. Spectrum indicated that it “did not
object” to Hall’s qualifications, given his experience, to testify as an expert at trial. Spectrum
noted, however, that Hall needed a foundation for his testimony as required by MRE 702 and MRE
703, and Spectrum reserved the right to object to his specific testimony should it fail to meet these
requirements. In particular, Spectrum reserved the right to object on the basis of the facts or data
used to support Hall’s opinions.

Although not objecting to Hall’s qualifications as an expert, Spectrum did object to Farm
Bureau’s requests for a ruling on what constituted relevant and admissible evidence regarding the
reasonableness of Spectrum’s charges. Detailing the holdings in several opinions issued by this
Court and the Michigan Supreme Court, Spectrum asserted that discovery and evidence relating
to reasonableness were limited by the no-fault act. More specifically, citing decisions of this Court,
Spectrum maintained that, because the focus of MCL 500.3157 is on “charges” and not “payment,”
the amount that others—such as insurance companies or Medicare—pay for services is not relevant
to a determination of reasonableness under the no-fault act. For this reason, Spectrum asked the
trial court to deny Farm Bureau’s request for a ruling that the amount others pay is relevant and
admissible.

Although disputing Farm Bureau’s assertion that the amount others pay is relevant,
Spectrum did not expressly address Farm Bureau’s additional arguments regarding the relevance
of (1) a hospital’s cost-to-charges ratio or (2) the amount generally billed. At most, in a footnote,
Spectrum asserted that in light of Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich
191; 895 NW2d 490 (2017), the “costs of treatment” a healthcare provider must disclose under
MCL 500.3158 were the costs to the injured person, “i.e., the provider’s charge,” as opposed to
the provider’s costs.

Farm Bureau filed a reply brief, reiterating Hall’s opinions regarding the open market and
again asserting that payments for healthcare services on the open market were relevant to assessing
reasonableness. In making this argument, Farm Bureau attempted to distinguish the cases from
this Court discussing the irrelevance of “payments” by asserting that the issue in those cases related
to whether a charge was “customary” rather than whether it was “reasonable” within the meaning

-6-
of MCL 500.3157. Farm Bureau also more specifically responded to Spectrum’s “costs of
treatment” argument under MCL 500.3158. Citing Bronson Methodist Hosp v Auto-Owners Ins
Co, 295 Mich App 431; 814 NW2d 670 (2012), Farm Bureau maintained that this Court had
already rejected the contention that a healthcare provider’s charge was the sole criterion for
assessing reasonableness, a conclusion that Farm Bureau contended had not been altered by
Covenant.

On January 12, 2018, the trial court held a hearing on Farm Bureau’s motion in limine.
The parties relied on their briefs. Ruling from the bench, the trial court granted Farm Bureau’s
motion in limine in part and denied it in part. Specifically, the trial court concluded:

I have read and reviewed this matter. It’s kind of an interesting argument
brought by the defense here for their expert. But I am going to side with Spectrum
Health with regards to this matter. I am going to adopt the law and argument as
stated in their brief. I believe that their definition of what is reasonable is
appropriate, pursuant to the law in the State of Michigan at this time.

On February 2, 2018, the trial court entered its order, granting in part and denying in part
Farm Bureau’s motion in limine. The trial court did specify that Hall could testify as an expert,
subject to any objections by Spectrum under MRE 702 and MRE 703. But the trial court denied
the remainder of Farm Bureau’s motion “for the reasons stated on the record.”

Thereafter, on March 7, 2018, Farm Bureau moved to compel discovery. Farm Bureau
interpreted the trial court’s partial denial of its motion in limine, along with the court’s acceptance
of Spectrum’s legal position, as the court’s conclusion that the “only evidence relevant” to the
reasonableness of Spectrum’s charges was evidence bearing on whether the “gross charges are
within a reasonable range of gross charges customary in the industry.” Recounting the details of
its previous discovery request, Farm Bureau asserted that Spectrum should be required to produce
documents “consisting of the gross charges of comparable hospitals for the same treatment”
provided to Sabby. More specifically, Farm Bureau sought published, publicly-available “charge
data” from a source such as “American Hospital Directory.com,”6 as well as a comparison of
Spectrum’s gross charges to comparable hospitals.7

Subsequently, the trial court entered a stipulated order compelling discovery as follows:

6
American Hospital Directory, Your Best Source of Hospital Information and Custom Data
Services, (accessed February 24, 2020).
7
Farm Bureau asserted that these types of materials and comparisons had been provided by
Spectrum in other cases. As an example, Farm Bureau attached an affidavit from a Spectrum
financial director from another lawsuit between Spectrum and Farm Bureau. As set forth in his
affidavit and supporting documents, the director conducted various analyses of Spectrum’s costs,
including comparison of Spectrum’s charges for specific treatment codes to the costs of similarly-
situated medical providers as reported on the American Hospital Directory website.

-7-
 IT IS ORDERED THAT Plaintiff shall produce such published, publicly
available comparative data printouts from ahd.com, clinical cost analyzer, showing
comparative data, including comparative gross change data, from comparable
hospitals as Plaintiff may rely on at trial in this case.[8]

Notably, in its motion to compel information about Spectrum’s gross charges, Farm Bureau
conceded that if the data in question showed that Spectrum’s charges were in the reasonable range
of gross charges customary in the industry, Farm Bureau would likely agree to a stipulated
judgment in Spectrum’s favor. But it would do so only if it could preserve its right to challenge
the trial court’s motion-in-limine order pertaining to Hall and the issue of identifying evidence
relevant to determining reasonableness. Indeed, following some additional discovery, Farm
Bureau moved for entry of judgment in Spectrum’s favor in the amount of $47,820.94. The request
for judgment preserved Farm Bureau’s right to appeal the trial court’s motion-in-limine order and
any subsequent award of postjudgment costs and attorney fees. Spectrum initially opposed the
motion for entry of judgment, asserting that there was no basis for the judgment and that Farm
Bureau simply intended to use this case to argue for a change in the law in the appellate courts.

After moving for entry of judgment, Farm Bureau also filed what it characterized as an
offer of proof relating to the trial court’s motion-in-limine order. In this offer of proof, Farm
Bureau detailed Hall’s opinions about reasonableness in general and, more specifically, about the
reasonableness of the charges in Sabby’s case. With regard to Sabby, Hall considered various
documents related to Sabby’s treatment, and according to his report, he was prepared to offer
various opinions regarding the reasonableness of the charges for Sabby’s treatment.9

8
In its motion to compel discovery, Farm Bureau also sought evidence of the amount customarily
“charged” in cases not involving insurance, including information about any 20% discount
Spectrum might provide to patients for prompt payment. The order did not mention any discount
information, and Farm Bureau does not pursue this argument on appeal.
9
Those opinions were as follows:
2. Farm Bureau paid $180,223.27 on total gross charges of $225,278.92 for
insured Brett Sabby for dates of service August 22, 2016 to September 13, 2016.
The treatment provided was the medical service of orthopedic surgery. More
specifically, the service was categorized as “Base MS-DRG 956-000-00,” which
signifies “limb reattachment, hip and femur procedures for multiple significant
trauma.” Spectrum’s charge, payment and cost data for these categories of
treatment is reported by American Hospital Directory. See attached Exhibit RE.
Data regarding average net payment received is reported in Spectrum’s Medicare
Cost Report and also by the American Hospital Directory.

3. It is my opinion that $180,223.27 reasonably compensates Spectrum for
$225,278.92 of gross charges. This opinion is based on my general knowledge and
extensive academic research about the extent to which hospitals typically mark-up
charges over costs and the extent to which they discount their list prices when they

-8-
negotiate market rates with third party payers that have some bargaining power. It
is also based on the . . . information [in the paragraphs that follow.]

In fiscal year ending June 30, 2016 Spectrum reported to the federal
government that, on average, it was paid 49% of its gross charges across all of its
patients. The American Hospital Directory (AHD) reports similar or greater rates
of charges to payments for the areas of clinical service involved in this case. My
opinion is that these actual payment amounts are highly relevant to determining the
reasonableness of hospitals’ non-discounted charges. Rates accepted from private
health insurers are freely negotiated in actual market conditions, and thus are a true
reflection of market rates. “List prices” that hospitals set in their “chargemasters”
usually have no firm basis in market realities or conditions. Almost no patient or
insurer pays these prices, so there are no significant market forces that deter
hospitals from setting unreasonable and unrealistic list prices. Also, the markups in
hospitals’ chargemasters are usually demonstrably unreasonable. Spectrum, like
other hospitals, sets its undiscounted prices almost 3 times greater than its actual
costs, which is much more than what they willingly accept from private insurers.
When hospitals’ list prices are demonstrably unreasonable, an alternative basis for
determining reasonableness is what a hospital actually agrees to accept from private
insurers with whom they negotiate.

Hospitals have less choice over what they receive from public insurers, such
as Medicare and Medicaid. Still, these insurers are under statutory legal obligation
to pay prices that assure a reasonable level of access for patients. Thus, these
government prices have some relationship to market-based reasonableness.
Generally speaking, government prices can be thought of as marking a lower bound
of reasonable prices, whereas prices from private insurers are closer to the upper
range of reasonable prices. Therefore, knowing this actual range of prices from the
predominant sources of hospital payment is highly relevant to knowing whether a
hospital’s list prices exceed what is reasonable.

It is also instructive to compare Spectrum’s gross charges to its costs. In
fiscal year ending June 30, 2016, Spectrum reported to the federal government that
its cost to charge ratio was .350044, and AHD reports a similar ratio (0.3445). This
means that Spectrum’s gross charges were about 290 percent more than its costs.
More specific data reported by AHD shows similar cost to charge ratios (0.37 –
0.38) for the specific medical services relating to limb reattachments, which equates
to a 260-270 percent markup.

[4.] Therefore, paying 80 percent of Spectrum’s gross charges equates to
paying a mark up of more than double its actual costs. Farm Bureau’s payment also
equates to paying in excess of 60 percent more than what other payers would pay,
on average. In my opinion, this amount paid is reasonable for the services rendered.

-9-
 On August 17, 2018, the trial court held a hearing on Farm Bureau’s motion for judgment.
At the hearing, the parties indicated that they had reached the “same agreement” that they reached
in another case a “few moments ago.” That agreement was not specified on the record in the
current case. The other case was Spectrum Health Hosps v Farm Bureau Mut Ins Co (lower court
docket no. 17-02224-NF). On the record in that case, the parties agreed that there was no issue
left for a jury and that judgment should enter in the amount sought in the complaint. But the parties
did not reach an agreement regarding penalty attorney fees. And they specified that “[e]verything
will be preserved for an appeal.”

Following the hearing in the current case, the trial court entered a consent judgment. The
judgment awarded Spectrum a total of $60,337.17, which consisted of $45,055.82 for unpaid
medical charges, $12,271.05 for interest under MCL 500.3142, $375 for costs pursuant to MCR
2.625, and $2,635.30 in prejudgment interest under MCL 600.6013. The consent judgment
specified that Spectrum could file a postjudgment motion for attorney fees. The consent judgment
also preserved Farm Bureau’s right to appeal the trial court’s motion-in-limine order.10

Spectrum moved for attorney fees under MCL 500.3158, asserting that Farm Bureau’s
partial denial of payment of Sabby’s medical bills was unreasonable for two reasons. First,
Spectrum contended that the denial was unreasonable because it was based on the assumption that
all hospital charges in excess of 80% of gross charges are per se unreasonable. Moreover,
according to Spectrum, this general assumption was unreasonable and violative of Farm Bureau’s
obligations under MCL 500.3157 to review “in each instance whether a charge is reasonable.”
Second, Spectrum contended that the denial was unreasonable because it was based on Farm
Bureau’s contention that reasonableness should be measured by amounts that other contracted-
payers pay for services despite the fact that this contention had been consistently rejected by the
appellate courts. In total, Spectrum sought attorney fees under MCL 500.3148 in the amount of
$14,616.50.

Farm Bureau opposed the motion for attorney fees, asserting that its denial of benefits was
reasonable because there were legitimate questions of statutory construction and a bona fide factual
controversy. First, in asserting that there was a legitimate legal question in this case, Farm Bureau
reiterated its contentions that the no-fault act does not define reasonableness, that caselaw on the
question of reasonableness was not binding because it constituted obiter dictum, and that the plain
meaning of the no-fault act should control. Second, with regard to the facts, Farm Bureau
maintained that publicly-available information proved there was a bona fide factual dispute as to
the reasonableness of Spectrum’s charges.

On March 8, 2019, the trial court held a hearing on Spectrum’s motion for attorney fees.
The parties relied on their briefs. The trial court denied the request for attorney fees, explaining
as follows: “I think this is a question of a bona fide factual uncertainty. I’m going to adopt the law
and argument in Farm Bureau’s brief . . . .” Thereafter, on March 25, 2019, the trial court entered
an order denying Spectrum’s motion for attorney fees.

10
The consent judgment also dismissed defendant Farm Bureau Mutual Insurance Company of
Michigan with prejudice.

-10-
 Both Farm Bureau and Spectrum now appeal to this Court. In Docket No. 347553, Farm
Bureau appeals by right the consent judgment, challenging the trial court’s motion-in-limine order,
which matter was preserved in the consent judgment. In Docket No. 348440, Spectrum appeals
by right the trial court’s postjudgment denial of attorney fees and costs under MCL 500.3158. The
appeals were consolidated.

II. ANALYSIS

A. STANDARDS OF REVIEW AND STATUTORY CONSTRUCTION

This Court reviews for an abuse of discretion a trial court’s decisions regarding the
admission of evidence and discovery matters. Mueller v Brannigan Bros Restaurants & Taverns
LLC, 323 Mich App 566, 571; 918 NW2d 545 (2018); Mercy Mt Clemens Corp v Auto Club Ins
Ass’n, 219 Mich App 46, 50-51; 555 NW2d 871 (1996). “A trial court abuses its discretion when
its decision falls outside the range of reasonable and principled outcomes.” Mueller, 323 Mich
App at 571 (quotation marks and citation omitted). We review de novo preliminary or underlying
questions of law. Id. When a trial court makes a determination that is legally incorrect, the court
necessarily commits an abuse of discretion. Id. This Court reviews de novo questions of statutory
interpretation. Bazzi v Sentinel Ins Co, 502 Mich 390, 398; 919 NW2d 20 (2018).

With respect to statutory construction, our goal “is to ascertain and give effect to the
Legislature’s intent.” McNeill-Marks v MidMichigan Med Ctr-Gratiot, 316 Mich App 1, 21; 891
NW2d 528 (2016) (quotation marks and citation omitted).

[T]he Court must begin with the language of the statute, ascertaining the
intent that may reasonably be inferred from its language. It is axiomatic that the
words contained in the statute provide the most reliable evidence of the
Legislature’s intent. The Legislature is presumed to have intended the meaning it
plainly expressed, and clear statutory language must be enforced as written. If the
statutory language is clear and unambiguous, judicial construction is neither
required nor permitted, and courts must apply the statute as written. Only if a statute
is ambiguous is judicial construction permitted. [Bronson, 295 Mich App at 441-
442 (citations omitted).]

B. DISCUSSION

1. THE NO-FAULT ACT AND THE DISTINCTION BETWEEN REASONABLE AND
CUSTOMARY CHARGES

With the enactment of the no-fault act in 1972, the Legislature “eliminated the old
automobile tort reparations system” and replaced it with a system of mandatory no-fault insurance
under which “an injured insured was guaranteed what the Legislature considered to be a sufficient
and expeditious recovery from his or her own insurer for all expenses for reasonably necessary
medical care, recovery, and rehabilitation, as well as some incidental expenses.” Muci v State
Farm Mut Auto Ins Co, 478 Mich 178, 187; 732 NW2d 88 (2007). “The goal of the no-fault
insurance system was to provide victims of motor vehicle accidents assured, adequate,
and prompt reparation,” Shavers v Kelley, 402 Mich 554, 578-579; 267 NW2d 72 (1978), while

-11-
minimizing “administrative delays and factual disputes,” Brown v Home-Owners Ins Co, 298 Mich
App 678, 685-686; 828 NW2d 400 (2012).

But adequate and expeditious compensation were not the no-fault act’s only goals. “The
no-fault act was as concerned with the rising cost of health care as it was with providing an efficient
system of automobile insurance.” Dean v Auto Club Ins Ass’n, 139 Mich App 266, 273; 362
NW2d 247 (1984). Indeed, “[i]t represents the policy of this state that the existence of no-fault
insurance shall not increase the cost of health care.” Id. at 274. Furthermore, the no-fault act was
intended to create an affordable system that would restrain insurance premiums. Stevenson v
Reese, 239 Mich App 513, 519; 609 NW2d 195 (2000); see also Davey v Detroit Auto Inter-Ins
Exch, 414 Mich 1, 10; 322 NW2d 541 (1982). In short, while the no-fault act sought to “provide
individuals injured in motor vehicle accidents assured, adequate and prompt reparation for certain
economic losses,” it was also intended to provide these benefits “at the lowest cost to the individual
and the system.” Gooden v Transamerica Ins Corp of America, 166 Mich App 793, 800; 420
NW2d 877 (1988).

“The no-fault act provides a comprehensive scheme for payment, as well as recovery, of
certain ‘no-fault’ benefits, including personal protection insurance benefits.” Citizens Ins Co of
America v Buck, 216 Mich App 217, 223; 548 NW2d 680 (1996). “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 . . . .” MCL
500.3105(1). PIP benefits are payable for “[a]llowable expenses consisting of reasonable charges
incurred for reasonably necessary products, services and accommodations for an injured person’s
care, recovery, or rehabilitation.” MCL 500.3107(1)(a) (emphasis added). The amount that a
healthcare provider can “charge” for products and services is further described in MCL 500.3157,
which, again, provided as follows before the recent amendment of the no-fault act:

A physician, hospital, clinic or other person or institution lawfully rendering
treatment to an injured person for an accidental bodily injury covered by personal
protection insurance, and a person or institution providing rehabilitative
occupational training following the injury, may charge a reasonable amount for
the products, services and accommodations rendered. The charge shall not exceed
the amount the person or institution customarily charges for like products, services
and accommodations in cases not involving insurance. [Emphasis added.]

“When read in harmony, §§ 3107 and 3157 clearly indicate that an insurance carrier need
pay no more than a reasonable charge and that a health care provider can charge no more than
that.” McGill v Auto Ass’n of Mich, 207 Mich App 402, 406; 526 NW2d 12 (1994) (emphasis
added). Under § 3157 it is also clear that a “no-fault insurer is not liable for the amount of any
charge that exceeds the health-care provider’s customary charge for a like product, service, or
accommodation in a case not involving insurance.” Hofmann v Auto Club Ins Ass’n, 211 Mich
App 55, 103; 535 NW2d 529 (1995) (emphasis added). A plaintiff seeking payment of no-fault
benefits “bears the burden of proving both the reasonableness and the customariness” of the
provider’s charges. Munson Med Ctr v Auto Club Ins Ass’n, 218 Mich App 375, 385; 554 NW2d
49 (1996), overruled in part on other grounds by Covenant, 500 Mich at 196.

Notably, the reasonable and customary provisions are two “separate and distinct limitations
on the amount health-care providers may charge and what insurers must pay.” Advocacy Org for

-12-
Patients & Providers v Auto Club Ins Ass’n, 257 Mich App 365, 376; 670 NW2d 569 (2003)
(AOPP), aff’d 472 Mich 91 (2005). With regard to the customary-charge limitation, “whether
there has been an impermissible § 3157 overcharge is determined by looking to the provider’s
customary charge in cases not involving insurance, meaning those situations where there is literally
no insurance in the lay sense of the term—no Medicare, no Medicaid, no BCBSM, and so forth.”
Munson, 218 Mich App at 389-390 (quotation marks and citation omitted). In short, a healthcare
provider cannot charge a no-fault insurer—and a no-fault insurer is not liable for—an amount that
exceeds the amount that the healthcare provider would customarily charge patients without
insurance. See, e.g., Hofmann, 211 Mich App at 103-107.

But simply because a charge is “customary” in cases without insurance does not necessarily
mean that the charge is also reasonable. See AOPP, 257 Mich App at 375-376. That is, a
“customary” charge does not automatically equate to a “reasonable” charge. Id. at 376. The AOPP
panel explained:

Rather than defining what is a “reasonable” charge, the clear and
unambiguous language of the second sentence in MCL 500.3157 simply places a
maximum on what health-care providers may charge in no-fault cases. The first
sentence of § 3157 provides that a health-care provider may only charge a
reasonable fee, while the second sentence unambiguously provides that a health-
care provider’s charge for products, services, or accommodations in cases covered
by no-fault insurance shall not exceed the amount customarily charged in cases not
involving insurance. [Id. at 375-376 (quotation marks, citations, ellipses, and
alteration omitted).]

In other words, under § 3157, a provider’s “customary” charge functions as “the cap on what
health-care providers can charge,” but it is “not, automatically, a ‘reasonable’ charge requiring full
reimbursement under § 3107.” Id. at 377. “It may be that a health-care provider’s ‘customary’
charge is also reasonable given the services provided, while at other times the ‘customary’ charge
may be too high, and thus unreasonable.[11] Either way, the trier of fact will ultimately determine
whether a charge is reasonable.” AOPP, 257 Mich App at 379. See also Advocacy Org for Patients
& Providers v Auto Club Ins Ass’n, 472 Mich 91, 95; 693 NW2d 358 (2005) (“[I]t is for the trier
of fact to determine whether a medical charge, albeit ‘customary,’ is also reasonable.”).

Accordingly, while the “customary” limitation establishes a cap on charges, the statutory
“reasonable amount” restriction on charges also functions as a distinct means of controlling
healthcare costs in the context of the no-fault act. See AOPP, 257 Mich App at 379; Hofmann,
211 Mich App at 113-114. In other words, while health and accident insurance carriers are
generally free to contain healthcare costs by placing “dollar limits upon the amounts it will pay to
doctors and hospitals for particular services,” a no-fault insurer may not do so. Hofmann, 211
Mich App at 113-114 (quotation marks and citation omitted). Instead, a no-fault insurer’s ability
to control costs—indeed its obligation to police costs as contemplated by the no-fault act—
involves determining “in each instance whether a charge is reasonable in light of the service or

11
But “a charge that is more than that charged to an uninsured person would, by necessity, be
unreasonable because of the limitation in § 3157.” AOPP, 257 Mich App at 377 n 3.

-13-
product provided.” AOPP, 257 Mich App at 379. The requirement that no-fault insurance carriers
pay no more than what is reasonable in relation to medical expenses evinces the Legislature’s
intent to place a check on healthcare providers who are without incentive to keep medical bills at
a minimum. McGill, 207 Mich App at 408. The Legislature clearly did not intend that no-fault
insurers pay all submitted claims absent review of the claims for excessiveness or fraud. Id.

Although the no-fault act and this Court’s caselaw clearly provide that no-fault insurers
have the right and obligation to pay only reasonable charges, the method of determining
reasonableness is unclear. As both this Court and the United States Court of Appeals for the Sixth
Circuit have recognized, the no-fault act leaves “open the questions of (1) what constitutes a
reasonable charge, (2) who decides what is a reasonable charge, and (3) what criteria may be used
to determine what is reasonable.” AOPP, 257 Mich App at 374-375, citing Advocacy Org for
Patients & Providers v Auto Club Ins Ass’n, 176 F3d 315, 320 (CA 6, 1999). This Court has
provided some answers to these questions.

For instance, in terms of who decides what is a reasonable charge, this Court has explained
that healthcare providers “necessarily make the initial determination of reasonableness by charging
the insured for the services. Once [they] charge the insured, the insurer then makes its own
determination regarding what is reasonable and pays that amount to plaintiffs.” AOPP, 257 Mich
App at 379 n 4. If the no-fault insurer does not pay all of the charges, a healthcare provider may
file suit to challenge the failure to fully pay the bills. It is the healthcare provider’s burden to
establish the reasonableness of the charges by a preponderance of the evidence. Bronson, 295
Mich App at 450. And “a hospital’s itemized bills and records do not, standing alone, satisfy the
‘reasonableness’ requirement.” Id. at 452. Whether the amount charged is reasonable is ultimately
a question of fact for a jury. AOPP, 257 Mich App at 379.

Although it is clear who determines reasonableness, the answers to the questions (1) what
constitutes a reasonable charge and (2) what criteria may be used to make this determination are
somewhat less certain. See id. at 374-375. This Court has approved consideration of some specific
factors when determining reasonableness. In AOPP, for example, the panel concluded that the no-
fault act did not prohibit consideration of charges by other healthcare providers for the same
services for purposes of assessing reasonableness. Id. at 382. In Bronson, 295 Mich App at 449-
450, this Court later clarified that a comparison to the charges of other healthcare providers is not
and should not be the only means of determining reasonableness. The Bronson panel concluded
that the cost to a healthcare provider of durable medical supply products used in treating an insured
is an appropriate (and discoverable) consideration in determining whether the charge for those
products was reasonable. Id. at 445-454 (case specifically focused on the actual cost of surgical
implant products). Neither AOPP nor Bronson, however, purported to delineate all the permissible
factors or evidence that would be relevant to a determination of reasonableness. See AOPP, 257
Mich App at 379 (“We will not attempt to delineate the permissible factors for determining what
is ‘reasonable,’ because it is not necessary to do so in resolving plaintiffs’ arguments.”); see also
Bronson, 295 Mich App at 449-450.

Against this backdrop, the present case is yet another instance in which a no-fault insurer
has denied full payment of charges on the basis that the charges—though apparently consistent
with customary charges for patients without insurance—were not reasonable within the meaning
of the no-fault act. The issue on appeal concerns the identification of the factors or criteria that
may be considered when determining reasonableness. Specifically, Farm Bureau asserts (1) that

-14-
reasonableness should be measured by the open market, including what others actually pay for
services, (2) that a healthcare provider’s cost-to-charge ratio is a permissible factor to be
considered when judging reasonableness, and (3) that the “amount generally billed” may also be
considered when assessing reasonableness.

2. PAYMENTS TO HEALTHCARE PROVIDERS BY THIRD-PARTY PAYERS – THE
CASELAW

Although Farm Bureau mentions various types of data allegedly relevant to an assessment
of reasonableness, the primary focus of Farm Bureau’s appellate briefing is on the payments that
healthcare providers accept for services from other payers, including health insurers and
government programs such as Medicaid and Medicare. Before considering the merits of Farm
Bureau’s arguments under the no-fault act regarding the relevance of this information to the
reasonableness of a charge, the preliminary question before us is whether this Court’s caselaw has
already foreclosed consideration of such data. As detailed below, this Court undoubtedly has held,
and correctly so, that the amount that others, such as a health insurer or government program,
actually pay to a healthcare provider has no bearing on the customary prong of § 3157. MCL
500.3157 caps charges at the amount a healthcare provider “customarily charges for like products,
services and accommodations in cases not involving insurance.” (Emphasis added.) But, as
discussed earlier, this Court in AOPP acknowledged that customary charges do not necessarily
equate to reasonable charges. In light of the significant distinction between customary and
reasonable, we conclude that this Court’s caselaw precluding consideration of third-party
payments in the context of the customary inquiry does not control whether those payment may be
considered when determining reasonableness.

More specifically, as detailed by the parties, for many years no-fault insurers have sought
to limit their liability under the no-fault act to the amounts paid by third parties such as healthcare
insurers, Medicaid, Medicare, and even worker’s compensation. This Court has repeatedly
rejected these attempts, but in doing so, the focus has been on the “customary” prong of § 3157.
This Court has refused to cap liability for no-fault insurers at the amounts customarily paid by
third parties. But this Court has not squarely addressed whether the amounts actually paid by third
parties for the same services might be relevant to the reasonableness of a charge.

To begin with, in Johnson v Mich Mut Ins Co, 180 Mich App 314, 320; 446 NW2d 899
(1989), “the defendant insurer argue[d] that the trial court committed error requiring reversal in
ordering payment of customary hospital charges instead of amounts which Medicaid would have
paid had plaintiff not been injured by an automobile.” In presenting this argument, the defendant-
insurer did not question the reasonableness of the charges or the necessity of the services. Id. at
321. Instead, the defendant-insurer simply “sought to persuade the trial court that the hospital’s
charges could only approximate those reimbursable by Medicaid.” Id. This Court found that
assertion “untenable . . . in light of the unambiguous statutory language of MCL 500.3157, which
clearly permits health care providers . . . to charge reasonable amounts not exceeding their
customary charges for the products, services and accommodations they provide to other injured
persons in cases not involving insurance.” Id. at 321-322. “[U]nder Johnson’s reasoning, the
acceptance of discounted payments does not define a health care provider’s ‘customary’ charge.”
Holland v Trinity Health Care Corp, 287 Mich App 524, 535; 791 NW2d 724 (2010). But Johnson
did not answer, nor even address, whether acceptance of discounted payments for services would
be relevant to a determination of a “reasonable charge.” See Johnson, 180 Mich App at 322.

-15-
 Next, in Hofmann, 211 Mich App at 98, the relevant issue again concerned the “customary”
prong and, in particular, whether the healthcare providers in that case “violated MCL 500.3157 by
charging more for products and services in cases involving no-fault insurance than they
customarily charged in cases not involving insurance.” In resolving the dispute, the Hofmann
panel recognized that “the relevant inquiry under § 3157 is not the amount that is customarily
charged to other health insurers, but rather the amount that is customarily charged ‘in cases not
involving insurance.’ ” Id. at 107. More specifically, pertinent to the instant case, the insurer in
Hofmann argued that the amount Blue Cross and Blue Shield of Michigan (BCBSM) paid as a
health insurer should be used to determine the healthcare provider’s “customary” charge because,
among other reasons, at least 70% of the healthcare provider’s patients had BCBSM coverage for
the charges in question. Id. at 112. In rejecting this argument, this Court reasoned:

[The insurer’s] reasoning is premised on the principle that BCBSM’s
“payments” to plaintiffs for x-rays, as opposed to plaintiffs’ “charges” to BCBSM
for those x-rays, are the proper criteria to be used in determining the plaintiffs’
“customary charge” for x-rays. This position is untenable, however, in light of the
clear statutory language of § 3157, which states that a “charge” in a no-fault case
“shall not exceed the amount [a] person or institution customarily charges for like
products, services and accommodations in cases not involving insurance”
(emphasis added). Thus, [the insurer’s] reliance on the amount that was “paid” by
BCBSM, as opposed to the amount that plaintiffs “charged,” is unwarranted.

Furthermore, [the insurer’s] position ignores the fact that the amounts that
plaintiffs receive in payment from BCBSM are subject to contractual limitations,
whereas the amounts that [the insurer] must pay for covered medical expenses are
not limited contractually. Our Supreme Court discussed this distinction in Auto
Club Ins Ass’n v New York Life Ins Co, 440 Mich 126, 139; 485 NW2d 695 (1992):

One way of containing [health care] costs is for an insurer to
place dollar limits upon the amounts it will pay to doctors and
hospitals for particular services. While health and accident carriers
generally are free to establish such limits, a no-fault insurer is not.
Only the statutory qualification of reasonableness limits the amount
that must be paid by a no-fault carrier for covered medical expenses.
[Emphasis added.]

The Court justified this distinction by noting that the obligation of a no-fault carrier
is secondary to that of a health or accident insurer in situations where both types of
coverage exist. Id.

In essence, [the insurer] is asking this Court to establish a rule that, in
situations where other health or accident insurance coverage does not exist, the
obligation of a no-fault carrier must be limited to what a health insurer would have
had to pay if health insurance existed, notwithstanding that the health insurer’s
obligation might be controlled by contract, whereas the no-fault carrier’s is not.
This position does not find support in the no-fault act. [Hofmann, 211 Mich App
at 113-114.]

-16-
 In short, Hofmann, consistent with Johnson, rejected the assertion that “third-party
contractual or statutory limitations [may be used] as a benchmark for determining the extent of a
no-fault insurer’s liability for payment of a health-care provider’s customary charge.” Id. at 109
(emphasis added). Notably, like Johnson, the Hofmann Court specified that the reasonableness of
the charges under § 3157 was not at issue. Id. at 114. The Hofmann Court expressly qualified its
ruling in this respect, stating:

We note that the absence of contractual limitations in no-fault situations
does not give health-care providers liberty to charge no-fault insurers any amount.
In addition to the “customary charge” limitation discussed above, §§ 3107 and 3157
also impose a statutory qualification of reasonableness, such that a no-fault carrier
is liable only for those medical expenses that constitute a reasonable charge for the
product or service. In this case, however, [the insurer] has not challenged the
reasonableness of the x-rays charges that comprise the basis of its § 3157
counterclaim for reimbursement. [Id. (citations omitted; emphasis added).]

Hofmann, in other words, recognized a potential distinction between reasonable charges and
customary charges, and its holding regarding the irrelevance of payments by third-parties was
specific to the customary-charge cap under § 3157.

The distinction between customary and reasonable charges was somewhat muddied by two
decisions from this Court following Hofmann. First, in Munson, 218 Mich App at 378, the no-
fault insurer refused to pay the full amount billed and instead paid the healthcare provider
according to the fee schedule in the Worker’s Disability Compensation Act, MCL 418.101 et seq.
In recounting the background and facts of the case, the Munson panel noted that the insurer
contested the reasonableness of the charges in the trial court on the basis that it was unreasonable
and unfair to charge no-fault insurers one amount for services while accepting lesser amounts from
other sources—such as Medicaid, Medicare, BCBSM, and worker’s compensation—as payment
for the same services. Munson, 218 Mich App at 379-381. Under a heading of “Reasonable and
Customary Charges,” the Court turned to analysis of the no-fault act, including § 3157. Id. at 381.
Importantly, while mentioning “reasonable” charges in the opinion, the Munson Court focused its
analysis solely on customariness rather than reasonableness. Specifically, the Court stated:

Under th[e] statutory scheme, [the insurer] is required to pay the “customary
charges” for services rendered by Munson. The critical issue in this case is what
the statutory term “customary charges” means. Munson, of course, argues that
“customary charges” means the standard amount it bills on behalf of every patient
treated, regardless of the fact that Munson routinely accepts less than this amount
in many cases (Medicare, Medicaid, and BCBSM insured cases). [The insurer]
argues that “customary charges” means the lesser amount that Munson actually
accepts in full satisfaction of the bill for the services rendered. [Munson, 218 Mich
App at 382.]

After quoting extensively from Hofmann, the Munson panel then rejected the no-fault insurer’s
attempt to limit its liability to the amount paid by third-party payers, holding:

In the instant case, [the insurer’s] proffered definition of “customary
charges” is the same one that was rejected by Hofmann, although [the insurer’s]

-17-
 benchmark is broader here than it was in Hofmann. (Here, [the insurer] defines the
benchmark as the amount that Munson received from Medicare, Medicaid,
BCBSM, and arguably, worker’s compensation.) And, as in Hofmann, [the insurer]
ignores the limitations placed upon Munson by the federal statutes governing
Medicare and Medicaid, by the state statutes governing Medicaid and worker’s
compensation, and by the contractual arrangement between Munson and BCBSM.
Defendant’s argument therefore fails for the same reasons it did in Hofmann.
[Munson, 218 Mich App at 385.]

In rejecting reliance on what others pay, after quoting from Hofmann, the Court in Munson
recognized that the proper point of comparison for customariness under § 3157 is those patients
without any insurance because “it is obvious that the phrase ‘in cases not involving insurance’
means those situations where there is literally no ‘insurance’ in the lay sense of the term—no
Medicare, no Medicaid, no BCBSM, and so forth.” Id. at 390. Finally, in rejecting the insurer’s
reliance on the worker’s compensation fee schedules, Munson determined that despite “a strong
equitable argument” from the insurer, the worker’s compensation fee schedules could not simply
be incorporated into the no-fault act, particularly when voter-referendum attempts to amend the
no-fault act to include fee schedules had failed. Id.

Unlike Hofmann and Johnson, Munson did not expressly limit its holding to the customary
prong of § 3157, and indeed the Munson Court mentioned reasonableness, to some extent seeming
to lump “reasonable and customary” together in its analysis. Id. at 381. But
despite the reference to reasonableness, we conclude that Munson cannot be relied upon as having
resolved the question presented in this case, i.e., whether payments by third parties are relevant to
the reasonableness of a charge. While alluding to reasonableness, Munson stated that “[t]he critical
issue in this case is what the statutory term ‘customary charges’ means.” Id. at 382. The Court
proceeded to analyze the term “customary charge” without any analysis of what a reasonable
charge entails. Id. at 382-385. For Munson to be read as having determined what a reasonable
charge entails—and whether third-party payments are relevant to reasonableness—the Munson
panel would have had to assume that reasonableness and customariness were coextensive. Such
an assumption, however, is not expressly stated anywhere in Munson, and in any event, “[i]t is a
well-settled principle that a point assumed without consideration is of course not decided.” 2
Crooked Creek, LLC v Cass Co Treasurer, 329 Mich App 22, 46; 941 NW2d 88 (2019) (quotation
marks and citation omitted). And, perhaps more importantly, the assumption that reasonableness
and customariness are one and the same has absolutely no validity after AOPP. See AOPP, 257
Mich App at 376-377.

Indeed, Munson’s failure to analyze reasonableness is particularly notable in light of
AOPP. The foundational premise of Munson’s analysis was that the no-fault act requires the
insurer “to pay the ‘customary charges’ for services rendered by” the healthcare provider. Munson,
218 Mich App at 382. But of course, under AOPP and the plain language of the no-fault act, this
is not an accurate statement. Rather, the customary inquiry is “separate and distinct” from the
reasonableness determination. And while a provider’s “customary” charge functions as “the cap
on what health-care providers can charge,” it is “not, automatically, a ‘reasonable’ charge requiring
full reimbursement under § 3107.” AOPP, 257 Mich App at 376-377.

To the extent AOPP and Munson could be read to conflict insofar as Munson states that an
insurer is required to pay customary charges, it bears emphasizing that the Michigan Supreme

-18-
Court affirmed this Court’s decision in AOPP, agreeing that “it is for the trier of fact to determine
whether a medical charge, albeit ‘customary,’ is also reasonable.” AOPP, 472 Mich at 95. By
lumping reasonable and customary together and analyzing customariness while wholly failing to
provide any analysis of reasonableness, the Munson panel failed to recognize the distinction
between reasonable and customary. And it ultimately did not consider or decide the question
whether evidence of third-party payments may be relevant to reasonableness. In short, reasonable
and customary are separate questions. Rather than assume that Munson answered the
reasonableness question presented in this case, we read the Munson decision as simply having
resolved the customariness issue that it actually decided. Any incidental reference to “reasonable”
in Munson was nothing more than dictum. See People v Aaron, 409 Mich 672, 722; 299 NW2d
304 (1980) (“While there are some cases containing language which may be construed as assuming
the existence of such a rule in Michigan, the language is clearly dictum as the question was neither
at issue nor expressly considered.”). Consequently, like Johnson and Hofmann, Munson does not
provide the answer to the question in this case.

The issue of third-party payers arose again in Mercy Mt Clemens, 219 Mich App at 49,
wherein the insurer asserted that a “ ‘charge’ means the amount customarily accepted by a plaintiff
as payment in full.” (Quotation marks omitted.) On the basis of this interpretation, the insurer
sought discovery of information about the amounts actually paid by “third-party payers such as
Medicare, Medicaid, Blue Cross-Blue Shield . . ., worker’s compensation insurers, health
maintenance organizations (HMOs), and preferred provider organizations (PPOs).” Id. at 48. The
healthcare providers sought a protective order, arguing that information about third-party payers
was irrelevant because “under § 3157 their charges could not exceed the amount customarily
charged for such services ‘in cases not involving insurance.’ ” Id. at 49. The trial court agreed
with the healthcare providers that amounts paid by third parties were not relevant and “were
outside the parameters of discovery.” Id. at 50.

On appeal, the issue was framed as whether “reference to ‘insurance’ in § 3157 . . . should
be read to refer to no-fault insurance only, rather than all types of insurance that provide payment
for medical care.” Id. The Court answered this question in the negative, ruling that “[t]he words
‘in cases not involving insurance’ in § 3157 should not be interpreted to mean ‘in cases not
involving no-fault insurance.’ ” Id. at 51. The Mercy Mt Clemens panel held:

[R]eimbursement from Medicare, Medicaid, and worker’s compensation
insurance is set by statutory and regulatory limitations. Reimbursement from Blue
Cross, HMOs, and PPOs is set by contracts between those entities and health-care
providers. Under Munson, Hofmann, Hicks, and Johnson, such information is not
admissible to prove the customary charge that defendant must pay under § 3157. .
. . In light of this precedent, we conclude that the circuit court did not err in finding
that the information sought on discovery was not relevant to whether the amounts
charged by plaintiffs met the requirements of §§ 3107 and 3157 of the no-fault act
and that it was not reasonably calculated to lead to the discovery of admissible
evidence. The circuit court did not abuse its discretion by granting plaintiff’s
requested protective order. [Mercy Mt Clemens, 219 Mich App at 54-55.]

This Court also noted that “[r]egardless of whether third-party health-coverage providers such as
Medicare, Medicaid, worker’s compensation, Blue Cross, HMOs, and PPOs are technically
insurance carriers, the amounts that plaintiffs accepted as payment in full from those entities cannot

-19-
be used to prove the customary charge for those services under § 3157 of the no-fault act.” Id. at
55.

Very much like Munson, the decision in Mercy Mt Clemens mentioned reasonable charges
and acknowledged that charges must be reasonable. Id. at 52. But, like Munson, the analysis then
focused solely on the question of customary charges and whether third-party payments were
relevant to determining a customary charge in cases not involving insurance. Id. at 52-55. Missing
from Mercy Mt Clemens was a recognition that customary charges are not necessarily reasonable
and that an insurer need not automatically pay a customary charge. Rather than assume Mercy Mt
Clemens answered the reasonableness question presented in the instant case, we construe that
decision as simply having resolved the customariness issue that it actually addressed and decided.
And any incidental reference to “reasonable” in Mercy Mt Clemens was nothing more than dictum.
See Aaron, 409 Mich at 722. Consequently, like the other cases cited by Spectrum, Mercy Mt
Clemens does not provide the answer to the question in this case.

The first case to actually address the separate and distinct question of reasonableness was
AOPP. As detailed earlier, the panel in AOPP, 257 Mich App at 376, determined that “the
‘customary charge’ limitation in § 3157 and the ‘reasonableness’ language in § 3107 constitute
separate and distinct limitations on the amount health-care providers may charge and what insurers
must pay with respect to victims of automobile accidents who are covered by no-fault insurance.”
Because they are separate inquiries, and an insurer only has to pay a reasonable charge (subject to
a customary-charge cap), AOPP also determined that an insurer did not necessarily have to pay a
charge simply because it represented a customary charge in cases not involving insurance. Id. at
376-379.

While addressing reasonableness, AOPP did not involve a situation in which the insurer
sought to have reasonableness determined on the basis of the amounts paid by third parties. Indeed,
this Court in AOPP noted that the no-fault insurer did not attempt to use worker’s compensation
fee schedules, nor did the insurer try to make comparisons to the amounts paid by health insurers,
Medicaid, or Medicare. Id. at 381-382. Instead, AOPP entailed an insurer’s use of an 80th
percentile test that assessed reasonableness by comparison to the amounts charged by other
healthcare providers rendering the same service. Id. More specifically, under the test, payment is
recommended “of one hundred percent of the charges as long as the charge does not exceed the
highest charge for the same procedure charged by eighty percent of other providers rendering the
same service.” Id. The Court held that “the criterion . . . used [by the insurer] in determining
whether a particular charge is reasonable is not precluded under the plain language of the statute
or Michigan case law.” Id. at 381. As part of its analysis, the AOPP panel stated:

Indeed, the panels in Mercy Mt Clemens, Munson, and Hofmann each
concluded that the data regarding payments made by third-party payers could not
be used to determine the customary charge under § 3157. In contrast, this case
involves defendants’ review of plaintiffs’ medical charges for reasonableness under
§ 3107 by comparing plaintiffs’ charges to those of other providers for similar
services. [AOPP, 257 Mich App at 382 (citation omitted).]

Spectrum asserts here that AOPP rejected comparisons to third-party payers because they are
irrelevant to the determination of reasonableness. But that question was simply not addressed in
AOPP.

-20-
 In sum, while there may be cases from this Court containing language that might be
construed as precluding consideration of amounts paid by third parties when determining the
reasonableness of an amount charged by a healthcare provider, a careful review of the caselaw
shows that this specific question was neither at issue nor expressly considered in these decisions.
In other words, there is, at most, obiter dictum on this question, which lacks the force of
adjudication and is, therefore, not binding on this Court under the principle of stare decisis. Aaron,
409 Mich at 722; 2 Crooked Creek, 329 Mich App at 46.

3. REASONABLENESS AND THE RELEVANCE OF THIRD-PARTY PAYMENTS

The question, of course, becomes whether third-party payments are a permissible
consideration under the no-fault act for purposes of assessing reasonableness. Again, under
§ 3107(1)(a), an insurer is liable for “[a]llowable expenses consisting of reasonable charges
incurred for reasonably necessary products, services and accommodations for an injured person’s
care, recovery, or rehabilitation. . . .” (Emphasis added.) And MCL 500.3157 provides additional
details about what a healthcare provider can charge for its services. As commonly understood, “a
‘charge’ is a ‘[p]ecuniary burden, cost’ or ‘[a] price required or demanded for service rendered or
goods supplied.’ ” Douglas v Allstate Ins Co, 492 Mich 241, 267; 821 NW2d 472 (2012) (citation
omitted; alterations in original). Generally speaking, absent a contractual limitation or some other
restriction imposed by law, healthcare providers are “free to charge the public whatever they
want[.]” Mich Ass’n of Psychotherapy Clinics v Blue Cross & Blue Shield of Mich, 118 Mich App
505, 528; 325 NW2d 471 (1982). In the no-fault context, however, healthcare providers are not
free to charge whatever they want. Rather, §§ 3107(1)(a) and 3157 limit a charge to a “reasonable”
amount, so long as it does not exceed the amount customarily charged.

Although “[t]he Legislature selected ‘reasonableness’ as the operative criterion for
determining the amount of a charge for services,” Hardrick v Auto Club Ins Ass’n, 294 Mich App
651, 671-672; 819 NW2d 28 (2011), the Legislature did not define the term “reasonable,” AOPP,
257 Mich App at 379. Relying on dictionary definitions, the Michigan Supreme Court has
generally defined the term “reasonable” as follows:

The term “reasonable” commonly refers to that which is “agreeable to or in
accord with reason; logical,” or “not exceeding the limit prescribed by reason; not
excessive[.]” The term “reasonable” has also been defined to mean “fair, proper, or
moderate under the circumstances” and “[f]it and appropriate to the end in view.”
[Krohn v Home-Owners Ins Co, 490 Mich 145, 159; 802 NW2d 281 (2011)
(citations omitted; alterations in original).]

Pursuant to this common understanding of the term “reasonable,” we see that a healthcare
provider’s charge must be fair, proper, or moderate, in accord with reason, and not excessive. A
determination of reasonableness—while initially made by the healthcare provider and
independently reviewed by the insurer—is ultimately a question for the fact-finder. See Bronson,
295 Mich App at 448.

In this context, the issue in this case is simply whether amounts paid for the same services
by health insurers and others, such as Medicaid and Medicare, may be considered by a fact-finder
as a point of comparison for determining whether the amount a healthcare provider charged a no-
fault insurer was reasonable. We conclude that while it is certainly not dispositive of the

-21-
reasonableness of a charge, the amount that third-parties pay is nevertheless evidence bearing on
the reasonableness of a healthcare provider’s fees. Cf. Bronson, 295 Mich App at 454
(“[P]laintiff’s actual cost for the surgical implant products is not dispositive on the issue whether
its charges were reasonable; however, the actual cost of the durable medical equipment is certainly
a piece of the overall ‘collage of factors affecting the reasonable rate’ of plaintiff’s charges.”).
Simply put, third-party payments which are accepted by a healthcare provider as payment in full
during the pertinent timeframe for products and services are relevant to determining the
reasonableness of charges for those very same products and services in the context of treatment
covered by PIP benefits.

In Hardrick, 294 Mich App at 667-668, this Court discussed the characteristics of relevant
evidence, explaining as follows:

Relevant evidence is evidence having any tendency to make the existence
of any fact that is of consequence to the determination of the action more probable
or less probable than it would be without the evidence. MRE 401 (emphasis added).
Relevance divides into two components: materiality and probative value. Material
evidence relates to a fact of consequence to the action. A material fact need not be
an element of a crime or cause of action or defense but it must, at least, be in issue
in the sense that it is within the range of litigated matters in controversy. Materiality
looks to the relation between the propositions that the evidence is offered to prove
and the issues in the case. If the evidence is offered to help prove a proposition that
is not a matter in issue, the evidence is immaterial. . . .

To be relevant, evidence must tend to make the existence of any fact that is
of consequence to the determination of the action more probable or less probable
than it would be without the evidence. . . . The threshold is minimal: any tendency
is sufficient probative force. Evidence is relevant if it in some degree advances the
inquiry, and is not objectionable simply because it fails to supply conclusive proof.
No single item of evidence can be rejected upon the sole ground that it falls short
of making a case; if it contributes to that end it must be received, and its sufficiency
in connection with the other evidence must be determined on a review of the whole
when the case is closed. [Quotation marks, citations, and alteration omitted.]

In this case, the question is whether the charges for Sabby’s surgery and other medical
treatments and services were reasonable. In this context, comparison of the amounts that Spectrum
charged for the services Sabby received to the amounts that others actually paid for the same
services during the same general timeframe—and that Spectrum accepted as payment in full for
these services—tends to make it more or less likely that the amounts Spectrum charged were
reasonable or unreasonable. That is, what others actually pay can be used to measure the value of
the medical services provided and can constitute a useful point of comparison for assessing the
reasonableness of medical charges. This evidence, supplying one measure of the value of the
services provided, “throws some light, however faint, on the reasonableness of a charge” and is
therefore worthy of a jury’s consideration. See Bronson, 295 Mich App at 452 (quotation marks
and citation omitted).

Indeed, unlike the customary-charge cap, which is expressly limited to comparison of the
charges to cases not involving insurance, the reasonableness prong does not contain any similar

-22-
restriction. See MCL 500.3157. Rather, it is more broadly concerned with ensuring that a charge
is fair and not excessive, and this concern invites comparison to amounts actually being paid on
the open market. See, e.g., Douglas, 492 Mich at 275 (“The compensation actually paid to
caregivers who provide similar services is necessarily relevant to the fact-finder’s determination
of a reasonable charge for a family member’s provision of these services because it helps the fact-
finder to determine what the caregivers could receive on the open market.”). We agree with the
following sentiments of the Georgia Supreme Court in Bowden v The Med Ctr, Inc, 297 Ga 285,
292; 773 SE2d 692 (2015):

The amounts that TMC charged to (and agreed to accept as payment in full
from) other patients treated at the same hospital for the same type of care during
the same general time frame that Bowden was treated may not be dispositive of
whether TMC’s charges for Bowden’s care were “reasonable” under OCGA § 44–
14–470(b), to the extent that the other patients were not similarly situated in other
economically meaningful ways. But that does not mean that how much TMC
charged those other patients is entirely irrelevant—particularly in the broad
discovery sense—to the reasonableness of the charges for Bowden’s care.

The fair and reasonable value of goods and services is often determined by
considering what similar buyers and sellers have paid and received for the same
product in the same market, with adjustments upward or downward made to
account for pertinent differences, and we see no reason why the same cannot be
true of health care. [Citation omitted.12]

A medical provider’s typical price cannot be deemed reasonable unless it reflects an
amount that is actually being charged in the marketplace, and a realistic standard considers the
amount insurers actually pay and the amount a medical provider is willing to accept. Nassau
Anesthesia Assoc PC v Chin, 32 Misc3d 282, 286; 924 NYS2d 252 (2011). Quite simply, when
determining reasonableness, the amount that others pay for the same goods or services is a
pertinent factor to be considered when deciding whether a charge of those same goods or services
is reasonable.13

12
Cases from other jurisdictions, while not binding, may be considered persuasive. Hiner v
Mojica, 271 Mich App 604, 612; 722 NW2d 914 (2006).
13
Although we hold that the amount third parties pay for products and services may be relevant to
a determination of reasonableness, the evidence needs to be specific to the particular charges at
issue and cover the same general timeframe. See AOPP, 257 Mich App at 379 (a no-fault insurer
need only pay a reasonable charge “for the particular product or service”). General information
and broad statistics are irrelevant to the question whether the particular charges in a given case
were reasonable. Thus, an insurer would not be justified in uniformly reducing the payment on all
medical bills by a set percentage based on general statistics. Instead, each case and each expense
needs to be considered and analyzed individually. Here, while Farm Bureau offered general
information about the healthcare market and Hall’s general opinions on reasonableness, it also
provided Hall’s opinions specifically with respect to Spectrum’s particular charges related to its

-23-
 We emphasize that the amount third parties pay does not conclusively establish a
reasonable amount. Instead, in ruling that third-party payments may be relevant, we are simply
indicating that such evidence may be considered as a point of comparison to assist the trier of fact
in determining the amount of a reasonable charge for the services in question. See Bronson, 295
Mich App at 451-454. The amount paid by others for the same services is just one measure—
among all the evidence the parties might wish to present—regarding the reasonableness of the
charges. See id.

For instance, a healthcare provider would be free to present evidence and to argue that its
charges were similar to those of other providers. And there are, of course, reasons why health
insurers, Medicare, and Medicaid pay less, including contractual and statutory limitations, see
Mercy Mt Clemens, 219 Mich App at 54, and a healthcare provider could present these factors and
distinctions to a jury. In view of these differences and any other evidence presented, the jury
would be fee to give the evidence regarding third-party payers little or no weight and to instead
conclude that the amount charged to uninsured individuals, or some other amount, is a better
measure of reasonableness. But the fact that there are different measures and factors bearing on
the assessment of reasonableness—and potential weaknesses in the evidence Farm Bureau wishes
to present—does not render evidence of third-party payments irrelevant as a matter of law. See
Bronson, 295 Mich App at 451-454. Instead, a jury should be presented with the complete picture
of the range of charges and payments for medical services on the open market.

In sum, when assessing the reasonableness of a medical charge, relevant evidence includes
the full range of charges and payments falling within the pertinent timeframe for the particular
services, products, and treatment at issue in the case. Among that evidence, the jury may consider
the amounts paid by third parties because such evidence “ ‘throws some light on the reasonableness
of the charges.’ ” Bronson, 295 Mich App at 452 (citation omitted).

In contrast to this conclusion, Spectrum relies heavily on Johnson, Munson, Mercy Mt
Clemens, Hofmann, and AOPP for the proposition that the amount third parties pay for medical
services is not relevant to the assessment of reasonable charges under § 3157. As discussed, these
cases did not actually resolve the question presented in this case—specifically, whether payments
by third parties are relevant to the determination of reasonableness. Nevertheless, one additional
point about these cases warrants discussion in light of Spectrum’s arguments on appeal.
Specifically, in analyzing the customary prong, some of the cases addressed the significance of the
use of the term “charges” in §§ 3107(1)(a) and 3157, noting that “payments” are not the same thing
as “charges.” See, e.g., Hofmann, 211 Mich App at 113-114. Employing this reasoning, Spectrum
contends that, whether considering customariness or reasonableness, payments are not relevant to
an analysis of charges.

Certainly, “charges” and “payments” are different terms, and the amount someone typically
charges for services may not be the same as the amount someone is actually paid for those services.
See, e.g., Law v Griffith, 457 Mass 349, 357; 930 NE2d 126 (2010) (“The only patients actually
paying the stated charges are the uninsured, a small fraction of medical bill payors.”). But the

treatment of Sabby and the amount charged to Farm Bureau as compared to what others would
pay.

-24-
significance of this basic distinction between a “charge” and a “payment” falls away when the
inquiry becomes one of reasonableness. Under the customary prong of § 3157, the sole question
concerns the amount the healthcare provider customarily charges in cases not involving insurance,
and actual payments matter not at all in answering this question. But when the reasonableness of
those charges is at issue, the charges alone—even if customary and even if comparable to the
charges of other healthcare providers—cannot be absolutely dispositive of their reasonableness.

To limit assessing the reasonableness of provider charges solely to a
comparison of such charges among similar providers would be to leave the
determination of reasonableness solely in the hands of providers, as a collective
group, and would abrogate the cost-policing function of no-fault insurers, contrary
to the intention of the Legislature. [Bronson, 295 Mich App at 449-450.]

Instead, in the context of reasonableness, a difference between the amount paid by third
parties when compared to no-fault insurers and the uninsured is clearly relevant to, though not
dispositive of, an assessment of reasonableness. To conclude otherwise would be to require the
jury to ignore the realities of the marketplace when, in actuality, “the market for a particular service
bears on its reasonableness.” Hardrick, 294 Mich App at 671-672. And “the parameters of the
relevant market present jury questions.” Id. at 672. When determining reasonableness, the jury
cannot be limited to consideration of a healthcare provider’s “charges” for services but must be
allowed to contemplate the value of the services on the market, including reflection on the amounts
paid for such services by third parties.

Textually, in concluding that use of the word “charges” in § 3157 does not preclude
consideration of “payments” when assessing reasonableness, we again emphasize that
consideration of payments is simply one measure for the jury to ponder; it is certainly not
dispositive. We do not suggest that “payments” necessarily establish the unreasonableness of a
charge. The issue is simply whether evidence of payments by third parties may be considered by
the fact-finder when gauging the reasonableness of charges. And we hold that nothing in the plain
language of § 3107(1)(a) or § 3157 precludes consideration of third-party payments when
determining a no-fault insurer’s liability for reasonable charges.

4. MCL 500.3158 AND MCL 500.3159

Even if relevant, Spectrum contends that the evidence Farm Bureau seeks to admit should
be excluded because it is not discoverable under §§ 3158 and 3159. Spectrum more specifically
contends that evidence relating to Spectrum’s costs is not relevant or discoverable because
Covenant overruled this Court’s decision in Bronson, and as a result, only “costs to the injured
person,” i.e., the provider’s charges, are relevant and discoverable. Contrary to these assertions,
Covenant did not overrule Bronson. With regard to the specific evidence in question, Bronson
appears to have limited applicability to the current case because Farm Bureau has not particularly
sought discovery of a “standalone” item, the cost for which is easily quantifiable. Instead, the
evidence Farm Bureau seeks to admit is based on publicly available data. While this information
may not be obtainable directly from Spectrum under §§ 3158 and 3159, nothing in the no-fault act
prevents Farm Bureau from introducing publicly available data with the proper foundation.

Generally, Michigan follows an open and broad approach to discovery, permitting
discovery “for any relevant matter, unless privileged.” Bronson, 295 Mich App at 443. “However,

-25-
a trial court should also protect the interests of the party opposing discovery so as not to subject
that party to excessive, abusive, or irrelevant discovery requests.” Id. (quotation marks and citation
omitted). The no-fault act contains two provisions regarding discovery that are relevant to this
case. First, § 3158(2) provides:

A physician, hospital, clinic or other medical institution providing, before
or after an accidental bodily injury upon which a claim for personal protection
insurance benefits is based, any product, service or accommodation in relation to
that or any other injury, or in relation to a condition claimed to be connected with
that or any other injury, if requested to do so by the insurer against whom the claim
has been made, (a) shall furnish forthwith a written report of the history, condition,
treatment and dates and costs of treatment of the injured person and (b) shall
produce forthwith and permit inspection and copying of its records regarding the
history, condition, treatment and dates and costs of treatment.

Additionally, § 3159 provides:

In a dispute regarding an insurer’s right to discovery of facts about an
injured person’s earnings or about his history, condition, treatment and dates and
costs of treatment, a court may enter an order for the discovery. The order may be
made only on motion for good cause shown and upon notice to all persons having
an interest, and shall specify the time, place, manner, conditions and scope of the
discovery. A court, in order to protect against annoyance, embarrassment or
oppression, as justice requires, may enter an order refusing discovery or specifying
conditions of discovery and may order payments of costs and expenses of the
proceeding, including reasonable fees for the appearance of attorneys at the
proceedings, as justice requires.

In this case, Spectrum asserts that these statutory provisions preclude discovery of the
information Farm Bureau seeks and that because discovery is not allowed, it also follows that the
information is not relevant or admissible. We disagree. The discovery devices specified in the
no-fault act do not necessarily represent “the complete panoply of discovery tools that the
Legislature intended to provide in connection with mandatory no-fault insurance coverage.” Cruz
v State Farm Mut Auto Ins Co, 466 Mich 588, 598 n 14; 648 NW2d 591 (2002). Much, if not all,
of the information Farm Bureau wants to rely upon regarding payments by third parties and
average cost-to-payment ratios is publicly available and was obtained by Farm Bureau from
various sources. Sections 3158 and 3159 of the no-fault act might not specifically require
Spectrum to provide this information to Farm Bureau. But nothing in § 3158 or § 3159 precludes
the consideration of publicly available data, so to craft such a limitation from the Legislature’s
silence on publicly available data would unjustifiably hinder no-fault insurers in responsibly
investigating claims. Cf. Cruz, 466 Mich at 598 n 14 (concluding no-fault discovery mechanisms
were “not comprehensive”). Moreover, given that the information is publicly available, Farm
Bureau’s accessing the information cannot plausibly run afoul of § 3159’s protections against
annoyance, embarrassment, or oppression. Indeed, considering that the information is publicly
available, the question is not really one of discovery, but admissibility. So provided that the data
is relevant and otherwise admissible under the rules of evidence, neither § 3158 nor § 3159
precludes its admission.

-26-
 On appeal, with regard to the costs of treatment, Spectrum also specifically argues that this
Court’s decision in Bronson, permitting discovery of a healthcare provider’s costs (at least to the
extent those costs may be easily quantified), was implicitly overruled by Covenant. In Bronson,
295 Mich App at 450-451, this Court reasoned:

In keeping with the insurer’s obligation to determine the reasonableness of
a provider’s charges, we believe that defendants were entitled to discover the
wholesale cost of the surgical implant products for which the insureds were
charged. The no-fault act, MCL 500.3158(2), permits defendants to discover
plaintiff’s “costs of treatment of the injured person,” not the “costs of treatment to
the injured person,” which presumably are plaintiff’s customary charges.
(Emphasis added.) Accordingly, defendants are permitted to consider the cost to
plaintiff of providing that treatment and not merely the cost of treatment as billed
by the provider to the injured person when evaluating the reasonableness of the
charges submitted for payment. We recognize that permitting insurers access to a
provider’s cost information could open the door to nearly unlimited inquiry into the
business operations of a provider, including into such concerns as employee wages
and benefits. However, we explicitly limit our ruling to the sort of durable medical-
supply products at issue here, which are billed separately and distinctly from other
treatment services and which defendants represent (and plaintiff has not disputed)
require little or no handling or storage by a provider. The surgical implant products
here are standalone items that can be easily quantified. Plaintiff must come forward
with evidence to convince a jury that the charges for the durable medical equipment
were reasonable.

Bronson has limited application to the current facts. That is, at least on appeal, Farm Bureau has
not identified a need for information about Spectrum’s costs for specific “durable medical-supply
products.” Instead, Farm Bureau’s arguments focus on publicly available data regarding costs
relative to charges, an issue which Bronson simply did not address. Although not the type of
information at issue in Bronson, contemplation of this publicly available data is not precluded by
§ 3158 or § 3159, and because it is publicly available, it does not run afoul of Bronson’s concern
about opening the door to unlimited discovery requests of a healthcare provider. In short,
Bronson’s specific discovery holding seems to have little bearing on the present case.

Nevertheless, we address Spectrum’s assertion that Covenant implicitly overruled Bronson
because in making this argument, Spectrum purports to find support for its more general assertion
that the reasonableness of medical charges is defined solely by comparison to charges among
similar healthcare providers. In Bronson, this Court expressly rejected the contention that
reasonableness could be determined solely by comparison of a provider’s charges to similar
providers. The Bronson panel reasoned that such an approach “would be to leave the
determination of reasonableness solely in the hands of providers, as a collective group, and would
abrogate the cost-policing function of no-fault insurers, contrary to the intention of the
Legislature.” Bronson, 295 Mich App at 449-450. In concluding that costs were also relevant,
this Court noted that § 3158(2) permits discovery of the “ ‘costs of treatment of the injured person.’
” Id. at 450. In contrast to this conclusion, Spectrum now argues on appeal that § 3158(2) should
be read to allow discovery only of the costs of treatment to the injured person, i.e., a provider’s

-27-
charges, meaning that the sole point of comparison for determining reasonableness would be a
comparison of charges.

In analyzing the text of § 3158(2), Spectrum maintains that Bronson implicitly involved a
misapplication of the last antecedent rule.14 That is, Spectrum contends that this Court erred by
reading the phrase “of the injured person” to only modify “costs of treatment” when “of the injured
person” should also be read to modify “history, condition, treatment and dates” as used in
§ 3158(2). Read in this manner, Spectrum asserts that the Legislature chose “of” because one does
not say, for example, “history to the injured person.” Spectrum also appears to believe that the
Legislature chose “of” to denote a possessive relationship. In other words, according to Spectrum,
the Legislature actually meant to say “injured person’s history, condition, treatment and dates and
costs of treatment.”

Bronson clearly rejected this position.15 But Spectrum maintains that Bronson’s
construction is no longer good law because Covenant held that the statutory cause of action for no-
fault benefits belongs to the injured person, not a healthcare provider. Spectrum notes that Bronson
operated under the assumption that healthcare providers could file suit against an insurer. See
Bronson, 295 Mich App at 450. And Spectrum emphasizes that the Covenant Court looked briefly
at § 3158(2), noting that this provision “simply requires that a healthcare provider make the injured
person’s medical records and certain treatment information available to the insurer.” Covenant,
500 Mich at 205-206.

Contrary to Spectrum’s assertions that Covenant overruled Bronson, this Court has already
recognized that Covenant did not affect the method for determining reasonableness as articulated
in AOPP and Bronson. Auto-Owners Ins Co v Compass Healthcare PLC, 326 Mich App 595,
609-610; 928 NW2d 726 (2018). The Compass Healthcare panel stated:

As the trial court concluded in its opinion and order on reconsideration,
“[t]he only effect of Covenant was to place the dispute over the reasonableness of
the charges between a provider and a patient-insured, rather than between a

14
The last antecedent rule is a grammatical rule which “provides that a modifying or restrictive
word or clause contained in a statute is confined solely to the immediately preceding clause or last
antecedent, unless something in the statute requires a different interpretation.” Tuscola Co Bd of
Comm’rs v Tuscola Co Apportionment Comm, 262 Mich App 421, 425; 686 NW2d 495 (2004)
(quotation marks and citation omitted). There is no mention of this rule in Bronson.
15
Contrary to Spectrum’s arguments, Bronson did not purport to apply the last antecedent rule;
and Bronson was also clearly correct in not rewriting § 3158(2) in the manner requested by
Spectrum. Had the Legislature intended to say “the injured person’s history, condition, treatment
and dates and costs of treatment,” it could have easily used this phrase. See Yaldo v North Pointe
Ins Co, 457 Mich 341, 346; 578 NW2d 274 (1998). Instead, relevant to this case, the Legislature
provided for discovery of the “costs of treatment of the injured person,” and Bronson properly
concluded that the Legislature intended the meaning it clearly and unambiguously expressed. See
Yaldo, 457 Mich at 346.

-28-
 provider and an insurer.” It did not alter the method of disputing the reasonableness
of the amount paid. [Id. at 610 (alteration in original).]

Indeed, there is nothing inconsistent between Bronson’s discovery ruling and Covenant.
To the contrary, the crux of Covenant’s statutory analysis was that the “the no-fault act does not,
in any provision, explicitly confer on healthcare providers a direct cause of action against insurers.”
Covenant, 500 Mich at 204-205. And the Supreme Court also could not find any such cause of
action in the no-fault provisions “that do not explicitly refer to healthcare providers.” Id. at 206-
218. In comparison, relevant to Bronson’s conclusion, the no-fault act expressly mentions
healthcare providers in § 3158(2) and explicitly imposes a duty on healthcare providers to disclose
the “costs of treatment of the injured person.” The fact that healthcare providers lack a statutory
cause of action does not alter their express obligation to comply with § 3158(2). Even before
Covenant, this obligation existed in cases brought by an injured person rather than a healthcare
provider. In short, Covenant did not overrule Bronson, it did not alter the method of disputing
reasonableness, and it did not otherwise change a healthcare provider’s obligation to comply with
§ 3158(2). In sum, the discovery provisions in §§ 3158 and 3159 do not compel the conclusion
that consideration of third-party payments is barred by the no-fault act.

5. APPLICATION

The trial court denied Farm Bureau’s motion in limine regarding the relevance and
admissibility of evidence, agreeing with Spectrum’s assertion that this Court’s caselaw construing
§ 3157 categorically precluded the admission of evidence of third-party payments for similar
services. For the reasons set forth in this opinion, we hold that evidence regarding third-party
payments may be relevant and admissible for purposes of assessing reasonableness under
§ 3107(1)(a) and § 3157. And the trial court’s blanket exclusion of this evidence constituted an
error of law amounting to an abuse of discretion. See Mueller, 323 Mich App at 571. To be clear,
we do not hold as a matter of law that the evidence offered by Farm Bureau is relevant and
admissible; rather, we reverse the trial court’s ruling and remand the matter for the trial court to
make the determination in the first instance under the proper legal framework. Cf. In re Kerr, 323
Mich App 407, 412; 917 NW2d 408 (2018) (remanding for a new evidentiary ruling when trial
court’s exclusion of evidence was based on an error of law). The trial court has not yet considered
the relevance of the specific data in question to the particular healthcare charges at issue in this
case that were billed in 2016, nor has the court addressed Hall’s particular methodologies in
analyzing that data.16 The record must also be developed with respect to the precise cost
information Farm Bureau seeks to discover and whether the cost information meets the standards
in Bronson.

16
For instance, on appeal, in a footnote, Spectrum asserts that Hall’s methodologies—based on
“common sense”—do not meet the standards for admission of an expert opinion. This issue, raised
for the first time on appeal, should also be addressed on remand in determining the admissibility
of Farm Bureau’s evidence.

-29-
 6. ATTORNEY FEES UNDER MCL 500.3148

Given our holding that evidence of third-party payments may be relevant, thereby requiring
remand for additional proceedings, whether the trial court erred by denying Spectrum’s motion for
attorney fees under MCL 500.3148 need not be considered because an award of attorney fees at
this juncture would be premature.17

III. CONCLUSION

In Docket No. 347553, we reverse the judgment entered in favor of Spectrum regarding
the balance on the charges billed by Spectrum for medical services rendered to Sabby. In Docket
No. 348440, we reverse the order denying Spectrum’s motion for attorney fees. We remand for
further proceedings consistent with this opinion. We do not retain jurisdiction. Having prevailed
in Docket No. 347553, Farm Bureau may tax costs under MCR 7.219 relative to that particular
appeal. We decline to award taxable costs in Docket No. 348440.

/s/ Jane E. Markey
/s/ Jonathan Tukel
/s/ Michael F. Gadola

17
Although our ruling in favor of Farm Bureau with respect to the motion in limine lends some
support to the denial of Spectrum’s request for attorney fees, the issue of attorney fees cannot be
properly addressed until, at the earliest, it is determined what specific evidence is admissible and
the impact of the evidence on the question concerning the reasonableness of Farm Bureau’s
decision to only pay 80% of the amount billed. And, of course, the issue of liability is now
reopened.

-30-