July 27, 2026
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Canty v. Mason: Michigan Supreme Court Holds That Medicare Recipients Who Opt Out of PIP Must Mitigate Damages, But Fee Schedule Caps Do Not Apply to Tort Claims
By Pratheep Sevanthinathan, Esq. The Seva Law Firm
Case: Canty v. Mason, No. 167772 (Mich. July 27, 2026) (Published)
Court: Michigan Supreme Court
Opinion By: Justice Bernstein, joined by Chief Justice Cavanagh and Justices Welch, Bolden, Thomas, and Hood
Concurrence: Justice Welch
Concurrence in Part/Dissent in Part: Justice Zahra
Decision: Court of Appeals affirmed in part and reversed in part; case remanded to trial court
Lower Court: Wayne Circuit Court; Court of Appeals Docket No. 365327
- Introduction
The Michigan Supreme Court has issued a landmark opinion interpreting key provisions of the 2019 no-fault reforms — and the result is a mixed bag for both injured parties and at-fault drivers. In Canty v. Mason, a 6-1 decision authored by Justice Bernstein, the Court addressed what happens when a person with Medicare opts out of PIP coverage under MCL 500.3107d, gets injured in a car accident, and sues the at-fault driver under MCL 500.3135(3)(c) for allowable expenses.
The Court held two things. First, the common-law duty to mitigate damages applies — meaning a plaintiff with Medicare must make reasonable efforts to use that Medicare coverage rather than simply billing the full amount to the tortfeasor. Second, the reimbursement limitations in MCL 500.3157, which cap what medical providers can charge for treatment covered by PIP benefits, do not apply to tort claims brought under MCL 500.3135(3)(c).
This is the first time the Supreme Court has interpreted the interplay between the Medicare opt-out provision, tort liability for allowable expenses, and the no-fault fee schedules introduced by the 2019 amendments. The decision has significant implications for every no-fault case involving a Medicare beneficiary who elected to waive PIP coverage.
- Facts
Joseph Canty was injured in a February 2021 car accident allegedly caused by Michael Mason. Canty carried no-fault insurance but had exercised his right under MCL 500.3107d to opt out of personal protection insurance (PIP) coverage entirely. He was eligible to do so because he had “qualified health coverage” through Medicare Parts A and B.
Because Canty had no PIP coverage to pay his medical bills, he did what the 2019 amendments contemplated: he filed a tort action against Mason under MCL 500.3135(3)(c), seeking to recover his medical expenses as “allowable expenses.”
Here is where the dispute got interesting. Multiple medical providers who treated Canty accepted Medicare — but none of them actually billed Medicare for his treatment. They did not charge Medicare rates either. Instead, they billed Canty at their standard rates, and Canty claimed those full amounts as damages in his lawsuit against Mason. He never submitted any claims to Medicare for reimbursement.
Mason moved for partial summary disposition, arguing two things: (1) Canty had a duty to mitigate his damages by using his Medicare coverage, which would have reduced what the providers charged, and (2) any damages should be limited by the reimbursement caps in MCL 500.3157, which tie maximum reimbursement to percentages of Medicare rates.
The trial court denied the motion on both issues. The Court of Appeals reversed, holding that Canty did have a duty to mitigate and that the MCL 500.3157 caps applied. Canty appealed to the Supreme Court.
- Issues
The Supreme Court addressed two critical questions:
First: Does the common-law duty to mitigate damages apply to a tort claim for allowable expenses under MCL 500.3135(3)(c)? Specifically, was Canty required to seek Medicare coverage for treatment he received from Medicare-participating providers, rather than claiming the full billed amounts from the at-fault driver?
Second: Do the reimbursement limitations in MCL 500.3157 — which cap what medical providers can charge for treatment covered by PIP benefits at percentages of Medicare rates — apply to a tort action brought under MCL 500.3135(3)(c)?
- Holding
A. Duty to Mitigate: Yes, It Applies
The Supreme Court affirmed the Court of Appeals on the mitigation issue. Justice Bernstein’s majority opinion began with the well-established common-law principle: when a person is the victim of a tort, they have a legal duty to avoid or minimize their damages through reasonable efforts. The burden falls on the defendant to prove the plaintiff failed to do so, and the reasonableness of the plaintiff’s efforts is a question for the trier of fact.
The key textual question was what “without limit” means in MCL 500.3135(3)(c), which allows recovery of allowable expenses “without limit” for individuals who opted out of PIP under MCL 500.3107d. Canty argued that “without limit” eliminated any duty to mitigate.
The Court disagreed. It held that “without limit” simply means there is no dollar cap on the number of allowable expense claims — not that the expenses themselves are free from any constraint. Allowable expenses are still defined by MCL 500.3107(1)(a) as “reasonable charges incurred for reasonably necessary products, services and accommodations.” The charges must be reasonable; the expenses must be necessary. Those requirements remain in place regardless of the “without limit” language.
Because the Legislature is presumed to be aware of the common law when it legislates, and because the no-fault act does not clearly abrogate the mitigation doctrine, the Court concluded that Canty was required to mitigate his damages by seeking Medicare coverage from Medicare-participating providers. The Court noted that this was no more burdensome than mitigation required in other contexts — such as seeking comparable employment after wrongful discharge or accepting life-saving medical treatment in a malpractice case.
B. MCL 500.3157 Fee Schedules: No, They Do Not Apply
On the second issue, the Supreme Court reversed the Court of Appeals. This is the more consequential holding for practitioners.
The Court of Appeals had reasoned that because MCL 500.3135(3)(c) defines allowable expenses by reference to MCL 500.3107, and MCL 500.3107(1) states it is “[s]ubject to the exceptions and limitations in this chapter,” the entire no-fault act — including the MCL 500.3157 fee schedule caps — gets imported into the definition of allowable expenses available in a tort suit.
The Supreme Court rejected this daisy-chain logic. If a mere reference to MCL 500.3107 were enough to import the entirety of Chapter 31 of the Insurance Code, then there would be no reason for MCL 500.3135(3)(c) to also specifically reference MCL 500.3108 through MCL 500.3110. Those additional references would be surplusage — something the rules of statutory interpretation do not permit.
Instead, the Court held that the Legislature deliberately chose to define allowable expenses in tort claims by reference to a limited set of provisions: “sections 3107 to 3110.” MCL 500.3157 is not among them. Moreover, the prefatory language of MCL 500.3107(1) speaks of “personal protection insurance benefits” that are “payable” — language that describes PIP claims, not tort damages. Similarly, MCL 500.3157(1) itself limits its scope to treatment “for an accidental bodily injury covered by personal protection insurance.” Canty’s claim was not for PIP benefits; it was a tort claim for damages.
The bottom line: the fee schedule caps in MCL 500.3157, which limit provider reimbursement to 190% of Medicare rates (for treatment after July 1, 2023), do not apply to tort claims under MCL 500.3135(3)(c).
C. The Concurrences
Justice Welch concurred fully but wrote separately to flag what she views as a potential legislative oversight. She pointed out an anomalous result: a person who opted out of PIP coverage — paying significantly lower premiums — can potentially recover more in tort than someone who paid for expensive unlimited PIP coverage. She also noted that the at-fault driver’s exposure depends entirely on the injured party’s PIP election, something the at-fault driver has no control over. She urged the Legislature to revisit the statute.
Justice Zahra concurred in part and dissented in part. He agreed that MCL 500.3157 does not apply and that mitigation is required. But he disagreed with the majority’s implication that no fee schedules apply. In his view, because Canty opted out of PIP specifically because he had Medicare, the Medicare fee schedules themselves should cap what he can recover. When Medicare pays a provider, that payment extinguishes the patient’s liability to the provider — the provider cannot balance-bill for the difference. Justice Zahra would have held that Canty’s recoverable allowable expenses are limited to what Medicare would reimburse.
- Conclusion
The Supreme Court affirmed the Court of Appeals’ holding that Canty must mitigate his damages by seeking Medicare coverage, reversed the holding that the MCL 500.3157 reimbursement caps apply to tort claims, and remanded the case to the trial court for further proceedings. Canty remains free to argue the reasonableness of his decision to seek some treatment from non-Medicare providers.
- What Does This Mean for Our Clients?
This decision has immediate, practical implications for anyone injured in a Michigan car accident who has Medicare coverage and opted out of PIP benefits. Here is what you need to know:
If you have Medicare and opted out of PIP, you can still sue the at-fault driver for your medical expenses — but you need to use your Medicare coverage where you can. The Supreme Court confirmed that the duty to mitigate damages applies. If your medical providers accept Medicare, you should be submitting those claims to Medicare rather than ignoring that coverage and billing the full amount to the at-fault driver. Failing to do so could reduce what you ultimately recover.
The no-fault fee schedule caps do NOT limit what you can recover in a tort lawsuit. This is the big takeaway. The MCL 500.3157 limits — which cap PIP reimbursement at 190% of Medicare rates — do not apply when you are suing the at-fault driver under MCL 500.3135(3)(c). Your damages are not automatically capped at a percentage of Medicare rates. This means that for services not covered by Medicare, or for amounts above what Medicare would pay, you may still recover the full reasonable cost from the at-fault driver.
This creates a significant distinction between PIP claims and tort claims. If you have PIP coverage, your medical providers are limited in what they can charge by the fee schedules. But if you opted out of PIP and are pursuing a tort claim, those fee schedules do not apply. Justice Welch flagged this as a potential anomaly that the Legislature may address, so this area of law could change — but for now, the tort path is not subject to the same caps.
Attendant care and other non-Medicare services are particularly significant. Medicare does not cover everything. Attendant care, custodial services, and certain rehabilitation expenses may not be covered by Medicare at all. Under this decision, when you sue in tort for those expenses, the MCL 500.3157 caps do not limit your recovery. The at-fault driver could be liable for the full reasonable cost of those services.
At-fault drivers and their insurers should take note as well. This decision means that when a person with Medicare opts out of PIP and then gets injured, the at-fault driver’s exposure could be substantially higher than if the injured person had maintained PIP coverage. As Justice Welch observed, this may drive up residual liability premiums over time.
The law in this area is evolving. The 2019 no-fault reforms are still relatively new, and courts are working through the many questions they raise. Canty v. Mason is the first Supreme Court opinion to address these specific issues, and the concurrences suggest that the Legislature may revisit the statute. If you were injured in a car accident and have questions about your coverage options or your right to sue, it is important to speak with an attorney who understands these developments.
If you have been injured in a motor vehicle accident and have questions about your rights under Michigan’s no-fault law — whether you have PIP coverage, Medicare, or both — contact The Seva Law Firm. We stay on top of these developments so our clients do not have to.
Pratheep Sevanthinathan is the owner and managing attorney of The Seva Law Firm, located at 100 W. Big Beaver Rd, Suite 500, Troy, MI 48084. He can be reached at (248) 385-5704.
This article is for informational purposes only and does not constitute legal advice. Every case is different, and past results do not guarantee future outcomes.