In Life Skills Village, PLLC  v Nationwide Mut Fire Ins Co, ___ Mich App ___; ___ NW2d ___ (2019) (Docket No. 345237), the Court of Appeals emphasized the highly factual nature of determining whether a facility provides adult foster care services that trigger Michigan licensure requirements. The published opinion is important for ascertaining whether residential care services were lawfully rendered under MCL 500.3157.

Background on Life Skills

In Life Skills, the patient sustained traumatic injuries in a motor vehicle accident. Medical providers prescribed services by Life Skills Residential, LLC (LSR), a semi-independent residential program that helps people transition back to independent living. The patient was placed in a three-bedroom home that LSR rented and monitored 24/7 via two cameras in the house. LSR staff prompted the patient to eat, bathe, take medications, and attend appointments when needed. But the patient didn’t require assistance with the tasks themselves—he only needed prompting to perform the tasks.

LSR sued Nationwide Mutual Fire Insurance Company, the patient’s no-fault insurer, after Nationwide stopped paying benefits for LSR’s services. Nationwide filed a motion for summary disposition, arguing that LSR’s claims were not compensable because they included charges for adult foster care, which LSR wasn’t licensed to provide. Under MCL 500.3157, no-fault benefits are only payable for lawfully rendered treatment. And in order to lawfully render treatment, a healthcare provider must comply with licensing requirements.

The trial court granted Nationwide’s motion for summary disposition, and LSR appealed.

Applying the Adult Foster Care Facility Licensing Act

To determine whether LSR lawfully rendered services, the Court of Appeals reviewed the Adult Foster Care Facility Licensing Act (AFCFLA), MCL 400.701 et seq., which sets forth the licensing requirements for institutions providing adult foster care. (The Court applied the version of the act that was in effect before the March 2019 amendments, but its analysis remains relevant under the current version.) “Adult foster care facility” was defined as an “establishment that provides foster care to adults,” “includ[ing] facilities and foster care family homes for adults who are aged, mentally ill, developmentally disabled, or physically disabled who require supervision on an ongoing basis but who do not require continuous nursing care.” MCL 400.703(4), as amended by 2017 PA 525. In turn, “foster care” was defined as “the provision of supervision, personal care, and protection in addition to room and board, for 24 hours a day, 5 or more days a week, and for 2 or more consecutive weeks for compensation.” MCL 400.704(7), as amended by 2017 PA 525. LSR conceded that it provided supervision and protection for the patient, but denied that it provided personal care and room and board.

The Court of Appeals first considered whether LSR provided services falling within the statutory definition of “personal care.”  “[P]ersonal care” is defined as

[p]ersonal assistance provided by a licensee or an agent or employee of a licensee to a resident who requires assistance with dressing, personal hygiene, grooming, maintenance of a medication schedule as directed and supervised by the resident’s physician, or the development of those personal and social skills required to live in the least restrictive environment. [MCL 400.706(1).]

The Court agreed that LSR didn’t personally assist residents with the tasks listed in the statute. Instead, it reminded or prompted the residents to complete those activities. Reminding or prompting residents to complete tasks fell within the definition of “supervision” under MCL 400.707(7), as amended by 1986 PA 257. Personal care, on the other hand, “require[d] something more, or at least different, than guidance and reminders to the residents.” Life Skills, ___ Mich App at ___; slip op at 6. Thus, the Court held that LSR didn’t provide personal care.

Next, the Court of Appeals declined to decide whether LSR provided room and board. Under former MCL 400.704(7) (now MCL 400.704(8)), a facility provides adult foster care only if it provides all of the services listed in the statute (i.e., supervision, personal care, protection, and room and board). The lack of personal care meant that LSR wasn’t providing adult foster care and didn’t need to be licensed as an adult foster care facility. So, LSR’s services were lawfully rendered.

Ultimately, the Court of Appeals noted that whether a facility provides adult foster care (and must be licensed in Michigan) depends on the facts of each case.

While the appeal was pending, the Legislature amended the definition of “foster care” under MCL 400.704. MCL 400.704(8) now reads:

“Foster care” means the provision of supervision, personal care, and protection in addition to room and board, for 24 hours a day, 5 or more days a week, and for 2 or more consecutive weeks for compensation provided at a single address. Providing room and board under a landlord and tenant arrangement does not, by itself, exclude a person from the licensure requirement under this act.

The Takeaway: Pay Close Attention to the Facts

If you’re dealing with a facility that may be providing adult foster care to patients, it’s important to develop a factual record of all the services provided to determine their proper categorization under Michigan law. If a facility provides room and board, supervision, personal care, and protection, the AFCFLA may require it to be licensed as an adult foster care facility. If it lacks the requisite licensure, a court may conclude that services provided by that facility are unlawfully rendered and not compensable as no-fault benefits. But remember: the use of the word “and” in the statute means that all the conditions outlined in MCL 400.704 must be met for the services to constitute “adult foster care.”

If you have questions about Life Skills Village, PLLC v Nationwide Mut Fire Ins Co or the application of MCL 500.3157, please feel free to contact the author, Benjamin A. Demsky. More information about Collins Einhorn’s General and Automotive Liability Practice Group is available here.