STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6300

June 13, 1985

INSURANCE:

No-fault insurance act--mileage allowance for travel for medical services

The Internal Revenue Service income tax deduction allowance of 9 cents per mile is not a reasonable rate for recovery of travel expense charges incurred for the purpose of receiving medical care services under the no-fault insurance act.

Honorable Perry Bullard

State Representative

The Capitol

Lansing, Michigan

You have requested my opinion on the question 'whether the Internal Revenue Service allowance of 9 cents per mile is a reasonable guide for reasonable charges incurred for an injured person's care, recovery, or rehabilitation in light of OAG, 1981-1982, No 5990, p 400?' Your question concerns the amount of recovery of personal protection insurance benefits for transportation expenses incurred in order to receive medical care.

The no-fault insurance act, MCL 500.3107; MSA 24.13107, in pertinent part, provides:

Since the term 'reasonable charges' was not defined by the Legislature, it is necessary to ascertain and give effect to the intent of the Legislature in accordance with the stated remedial purposes of the Act. Gauthier v Campbell, Wyant & Cannon Foundry Co, 360 Mich 510; 104 NW2d 182 (1960).

In Swantek v Automobile Club of Michigan Ins Group, 118 Mich App 807, 808; 325 NW2d 588 (1982), lv den, 417 Mich 995 (1983), the court addressed the issue of whether travel expenses incurred in order to obtain medical treatment are recoverable under MCL 500.3107; MSA 24.13107. Construing the no-fault insurance act, the court in Swantek ruled that where the Legislature has intended to abolish all liability for a specific loss, it has clearly done so, as in subthreshold noneconomic loss. MCL 500.3135; MSA 24.13135. The court concluded that because reasonable and necessary travel expenses incurred for the purpose of obtaining medical services are not clearly excluded by the language of the statute, it must follow that they are reasonable charges under the statute.

Most importantly, for purposes of construing the Michigan no-fault insurance act, an analogy between the no-fault insurance act and the Worker's Disability Compensation Act of 1969, was approved as valid and persuasive by the court in Swantek, at 810. The analogy is founded upon a close similarity in the purpose of each act as being remedial in nature, and recognizes a comparability in the language used in MCL 500.3107; MSA 24.13107, of the no-fault insurance act, to MCL 418.315; MSA 17.237(315), of the Worker's Disability Compensation Act of 1969, which the court found expressed the same legislative intent. Extrapolation from such an analogy permitted the court to use worker's compensation precedent to construe similar provisions of the no-fault insurance act. Finally, it is noted that the court in Swantek expressed no opinion on the reasonableness of the amount of transportation expenses claimed.

OAG, 1981-1982, No 5990, p 399 (October 2, 1981), addressed the issue of the appropriate mileage allowance permitted as a reasonable travel expense incurred in order to secure medical services recoverable under MCL 500.3107; MSA 24.13107, and concluded that in the absence of a statute, court decision, or rule setting forth the allowable travel expenses under the no-fault insurance act, the state travel reimbursement rates furnish reasonable guidance. Relying on Hite v Evart Products Co, 34 Mich App 247; 191 NW2d 136, lv den, 386 Mich 753 (1971), which held that the state's Standard Travel Regulations represented a reasonable guide for the reimbursement of travel expenses incurred in order to obtain medical treatment under the prevailing worker's compensation act, and Visconti v Detroit Automobile Inter-Insurance Exchange, 90 Mich App 477, 479; 282 NW2d 360 (1979), which found the pertinent provisions of the Worker's Disability Compensation Act of 1969 and the no-fault insurance act to be similar, the opinion utilized the worker's compensation act analogy and applied 1980 AACS, R 408.45(2), to the no-fault insurance act as a reasonable guide for reimbursement of travel expenses incurred in securing medical services.

The current State Standardized Travel Regulations fix the mileage rate at 30.25 cents per mile for travel.

Internal Revenue Code, Sec. 213(d)(1)(B); 96 State 421 (1982); 26 USC 213, defines the term 'medical care' to include amounts paid for transportation primarily for, and essential to, medical care. The standard mileage rate for computing the cost of operating an automobile for transportation to receive medical care is 9 cents per mile. Rev Proc 82-61 1982-2 CB 849, 851. Rev Proc 82-61, in pertinent part, states:

It is noted that in Weary v US, 510 F2d 435 (CA 10, 1975), cert den, 423 US 838; 96 S Ct 67; 46 L Ed 2d 58 (1975), the Court declined to permit the deduction of travel expenses for medical care at a rate to include depreciation costs for the automobile, permitting deduction only based upon the rate per mile approved by the controlling revenue procedure. In his dissent, Judge Christensen observed that the government conceded that if the car had been rented, the amount paid for the rental to receive medical care would be deductible, terming the position of the government to be 'excessively grudging against the taxpayer.'

The medical travel expense deduction permitted under Rev Proc 82-61 is an unreasonable standard for reimbursement under MCL 500.3107; MSA 24.13107. Unlike 26 USC 263, which provides for an income tax deduction, a matter of legislative grace, and therefore to be construed very narrowly, the Michigan no-fault act's remedial nature requires a broad construction to effectuate coverage. BASF Wyandotte Corp v Transport Ins Co, 523 F Supp 515 (ED Mich, 1981); Bauman v Auto Owners Ins Co, 133 Mich App 101; 348 NW2d 49 (1984).

Swantek holds that travel expenses incurred in order to obtain medical treatment are recoverable thereunder. OAG, 1981-1982, No 5990, supra, concluded that the state travel reimbursement rates furnish reasonable guidance for the application of MCL 500.3107; MSA 24.13107. Thus, 30.25 cents per mile for travel incurred for the purpose of receiving medical services is a reasonable rate. It must follow that 9 cents per mile is not a reasonable rate of recovery for travel expenses incurred for the purpose of securing medical services as provided in MCL 500.3107; MSA 24.13107.

It is my opinion, therefore, that the sum of 9 cents per mile is not a reasonable rate per mile for recovery of travel expense charges incurred for the purpose of receiving medical care services under the no-fault insurance act.

Frank J. Kelley

Attorney General