STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6866

August 22, 1995

INSURANCE CODE OF 1956:

Continued arbitration of medical malpractice cases under Chapter 30A of the Insurance Code of 1956

Arbitration Services Inc., the entity that administers the arbitration of medical malpractice cases on behalf of the Insurance Bureau, does not have the authority to continue to arbitrate cases under Chapter 30A of the Insurance Code of 1956 after October 1, 1995.

The Insurance Bureau may not continue to fund the activities of Arbitration Services Inc., after October 1, 1995.

The Legislature did not intend to provide for the arbitration of medical malpractice cases under Chapter 30A of the Insurance Code of 1956 after October 1, 1995.

Honorable John T. Llewellyn

State Representative

The Capitol

Lansing, Michigan

You have asked several questions concerning the effect on pending arbitration cases of the repeal of the R. Hood-McNeely-Geake Malpractice Arbitration Act of 1975 (Act), MCL 600.5040 et seq; MSA 27A.5040 et seq, and Chapter 30A of the Insurance Code of 1956, MCL 500.3051 et seq; MSA 24.13051 et seq.

It may be helpful to review the statutory background before answering your questions. The Act added Chapter 50A to the Revised Judicature Act of 1961, MCL 600.101 et seq; MSA 27A.101 et seq. Sections 5041 and 5042 stated that health care providers and hospitals could offer patients, on a voluntary basis, an agreement to arbitrate any disputes that might arise as a result of the treatment given. The patient had the right to revoke the arbitration agreement within 60 days after execution by the health care provider or discharge by the hospital. Section 5044 provided that the administrative cost of the arbitration would be defrayed by the arbitration administration fund established by the Legislature in the Insurance Code of 1956, MCL 500.100 et seq; MSA 24.1100 et seq.

Section 2 of 1993 PA 78 repealed the Act. In its place, 1993 PA 78 amended several existing statutes to place a cap on damage awards in medical malpractice cases as well as establishing different procedures for the handling of medical malpractice claims. In addition, it added section 2912g to the Revised Judicature Act of 1961 to allow for the voluntary arbitration of claims of $75,000.00 or less. While section 3 of 1993 PA 78 stated that the repeal of the Act was effective October 1, 1993, section 5 stated that it would not become effective until several other acts became effective, which occurred on April 1, 1994.

The arbitration administration fund mentioned in section 5044 of the Act was established by section 3057 of Chapter 30A which was added to the Insurance Code of 1956 by 1975 PA 141. Section 3053 of Chapter 30A required malpractice insurers to place in their policies a requirement that hospital insureds offer an arbitration agreement to each patient treated or admitted. Under Chapter 30A Arbitration Services Inc., administers the arbitration of medical malpractice cases on behalf of the Insurance Bureau. Section 3(2) of 1993 PA 349 repealed Chapter 30A, including the arbitration administration fund established in section 3057 effective October 1, 1995.

You first ask if Arbitration Services Inc., the entity that administers the arbitration of medical malpractice cases on behalf of the Insurance Bureau, has the authority to continue to arbitrate cases under Chapter 30A of the Insurance Code of 1956 after October 1, 1995.

In 1993 PA 349 the Legislature has repealed Chapter 30A of the Insurance Code of 1956 effective October 1, 1995. Once a statute is repealed, it is as if it never existed. Bejger v Zawadzki, 252 Mich 14, 19; 232 NW 746 (1930). Thus, on October 1, 1995, there will be no statutory authority for Arbitration Services, Inc., to continue to arbitrate cases that had previously been filed.

It is my opinion, therefore, in answer to your first question, that Arbitration Services Inc., the entity that administers the arbitration of medical malpractice cases on behalf of the Insurance Bureau, does not have the authority to continue to arbitrate cases under Chapter 30A of the Insurance Code of 1956 after October 1, 1995.

You next ask if the Insurance Bureau may continue to fund the activities of Arbitration Services Inc., after October 1, 1995.

Chapter 30A of the Insurance Code of 1956 is repealed effective October 1, 1995. Section 3057 of Chapter 30A created the arbitration administration fund. An administrative agency has only those statutory powers conferred upon it by the Legislature. Coffman v State Bd of Examiners, 331 Mich 582, 590; 50 NW2d 322 (1951). Thus, on October 1, 1995, the Insurance Bureau will be without any statutory authority to fund the activities of Arbitration Services Inc.

It is my opinion, therefore, in answer to your second question, that the Insurance Bureau may not continue to fund the activities of Arbitration Services Inc., after October 1, 1995.

Your third inquiry asks if the Legislature intended to provide for the arbitration of medical malpractice cases under Chapter 30A of the Insurance Code of 1956 after October 1, 1995.

The Legislature did not include any savings clause in 1993 PA 349 allowing for the completion of arbitration cases that were filed before October 1, 1995, under Chapter 30A of the Insurance Code of 1956. The Legislature also added section 2912g to the Revised Judicature Act of 1961 to provide for the voluntary arbitration of medical malpractice claims without the Insurance Bureau being involved. The Legislature did not enact any statutory provisions authorizing the continued arbitration of medical malpractice cases under Chapter 30A of the Insurance Code of 1956 after October 1, 1995.

It is my opinion, therefore, in answer to your third question, that the Legislature did not intend to provide for the arbitration of medical malpractice cases under Chapter 30A of the Insurance Code of 1956 after October 1, 1995.

Frank J. Kelley

Attorney General