Lawfully Rendered? It’s a Matter of Form…Court of Appeals Holds Insurers Lack Standing to Challenge Corporate Form

This is a published decision and thus will be precedentially binding. As an insurer is only required to pay benefits for treatment which was lawfully rendered there is an important distinction that must be drawn as to the extent of the holding. The distinction is one of “business licensing” versus “professional licensing” when it comes to challenging whether services were lawfully rendered.

In evaluating whether services were lawfully rendered, insurers must be careful in how they are framing a potential dispute so as to avoid a challenge to standing based on Miller and now, Sterling Heights Pain Management. If the basis for disputing whether the services were lawfully rendered is premised on a lack of proper corporate or organizational form, the insurer will lack the standing necessary to challenge the treatment.

This, however, is a distinctly different issue than if the challenge to the lawfulness of the services rendered is based on the provider as an institution not being properly licensed. Equally important, the Court’s holding does not disturb the requirements of Michigan’s Limited Liability Company Act that every manager and member of the provider must be professionally licensed to render the services provided for the same to be lawfully rendered.

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