We Mean What We Say: Retroactivity of Covenant Reaffirmed

This published Opinion reiterates the retroactivity of the Covenant decision, establishing that healthcare providers do not have a direct cause of action against no-fault insurers. Further, this Opinion reiterates that while the doctrine of stare decisis is not binding on subsequent cases which are factually distinguishable, a level of exigency needs to exist to justify contravening the general rule of full retroactivity.

No-fault practitioners should take note that in reaching this decision, the Court of Appeals focused exclusively upon the fact that both cases turned on the fact that a healthcare provider had filed a direct suit against a no-fault insurer. However, the Court of Appeals’ language regarding, “a level of exigency which justifies convening the general rule of full retroactivity,” is problematic. While this “exigency” is ill-defined and explained, the Court seems to imply that because providers are able to seek reimbursement from their patients directly or to seek an assignment of benefits, the general rule of full retroactivity should not be contravened. This leaves the potential question regarding whether exigency may exist in cases which patients are not available unresolved at this time.

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