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March 11, 2003

File No.


Petitioner: Respondent:
XXXXXXXXXXXXX Blue Cross and Blue Shield of Michigan

Issued and entered March 11, 2003 by Frances K. Wallace, Chief Deputy Commissioner



On February 6, 2003, XXXXXXXXXX (Petitioner) filed a request for external review with the Commissioner of Financial and Insurance Services (Commissioner) under the Patient’s Right to Independent Review Act (PRIRA) MCL 550.1901 et seq. After a review of the material submitted, the Commissioner accepted the request on February 13, 2003.

The issue involved in the adverse determination is contractual. The Commissioner reviews contractual issues pursuant to MCL 550.1911(7). As a result, review by an independent review organization is not required. The Commissioner notified Blue Cross and Blue Shield of Michigan (BCBSM) of this filing and requested the information it used in making its adverse determination. The Office of Financial and Insurance Services received the BCBSM information on February 25, 2003.


On XXXXXXXX, the Petitioner had back surgery at XXXXXXXXXXXXXXXXXX. The hospital and surgeon participate with BCBSM. However, the anesthesiologist did not participate with BCBSM. The anesthesia charge was $1,224.00. BCBSM approved and paid its maximum payment amount of $861.77 for this care, but it left Petitioner with a balance of $362.23.


Is Blue Cross and Blue Shield of Michigan (BCBSM) required to pay an additional amount for the anesthesia services?


Petitioner’s Argument

The Petitioner chose an in-network hospital as well as an in-network physician. She met the anesthesiologist just before she went to the operating room. She thought the anesthesiologist was a participating provider, like the surgeon and hospital. She believed the anesthesiologist services would be covered in the same manner as the surgeon’s fees. Had she known the anesthesia services were not covered at 100% she would have considered other alternatives. She therefore believes BCBSM should pay the full amount charged for her anesthesia services.

BCBSM’s Argument

Petitioner has coverage under the Community Blue Group Benefit Certificate. Rider RAPS (Reimbursement Arrangement for Professional Services) also applies.

Under the Certificate, participating doctors agree to accept BCBSM’s approved amount as payment in full for a covered service. A participating doctor cannot charge the patient the remaining balance even if the BCBSM payment is lower than the amount the doctor normally charges. If the member obtains services from a non-participating doctor, BCBSM will pay the same approved amount it pays to a participating doctor. The non-participating doctor, however, is not bound to accept the BCBSM amount as payment in full. The doctor therefore may balance-bill the patient.
BCBSM determines the payment level for each service by applying a Resource Based Relative Value Scale (RBRVS). RBRVS reflects the resources required to perform each service. It includes physician time, specialty training, malpractice premiums, practice expenses and overhead. BCBSM regularly reviews the payment level to address the effects of changing technology, training, and medical practice. BCBSM claims the $861.77 it paid for the XXXXXXXXXX, anesthesia care is equal to the maximum amount payable under its system of payment for the procedure performed.

BCBSM claims that participating anesthesiology providers were available to provide the Petitioner’s care. BCBSM found five anesthesiologists near the Petitioner residence. Two of these providers were within fifty miles of her home. Therefore, she was not limited to the non-participating provider that her primary physician recommended.

Commissioner’s Review

The Certificate of Coverage controls the analysis in this matter. It defines the term “Non-participating Provider” as:

Any provider who has not signed a participation agreement with BCBSM to accept the approved amount as payment in full. However, nonparticipating providers may agree to accept the approved amount on a per claim basis.

This language places a subscriber on notice that BCBSM pays an “approved amount” and that a non-participant is not bound to accept it as payment in full.

Moreover, Section 2 of the RAPS Rider informs a member that he or she may be affected when a non-participating provider is used. It states:

When you receive services from a non-participating provider, you should expect to pay charges to a non-participating provider at the time you receive the care. It is then your responsibility to submit a claim to us. If we approve the claim, we will send the payment directly to you. Because non-participating providers may charge more than our approved amount, our payment to you may be less than the amount charged by the provider… [Emphasis added]

The highlighted portion above is a clear warning that using a non-participating provider may lead to a reimbursement lower than the charged amount. This provision may be invalid if no participating providers were available within a reasonable distance. However, participating anesthesiologists are located within a reasonable distance from Petitioner’s home.

The Commissioner finds the Certificate is clear in its discussion of non-participating providers. The Certificate is available for the member to read. If a certificate is not available, the member may contact BCBSM for coverage details. It is therefore Petitioner’s responsibility to determine whether a provider participates with BCBSM.

The analysis so far has focused on the BCBSM Certificate. One could say the contractual review is too strict and fails to account for the realities facing patients anticipating surgery. One such reality is that a patient is rarely (if ever) given information about the anesthesiologist. The anesthesiologist is of course affiliated with the hospital (a BCBSM participating facility); and patients typically assume the anesthesiologist also participates with BCBSM. A majority of the time the assumption is true, but it is possible the anesthesiologist does not participate with BCBSM.Unfortunately, in the case at hand the anesthesiologist does not participate.

A patient would understandably be upset to learn the anesthesiologist is billing him for the balance over the BCBSM approved amount.

One must remember BCBSM only pays the medical expenses. It seeks to contract with various medical professionals to uphold its contractual duties. It does not control the doctors and the procedures they choose. As a result, BCBSM has practically no role in determining if a particular physician provides services to the subscriber. Its contract places the burden of choice on the subscriber. The patient therefore cannot reasonably blame BCBSM for not informing him/her whether an anesthesiologist participates, unless of course the patient specifically asks BCBSM prior to the surgery.

In the case at hand, the anesthesiologist is a non-participating provider with BCBSM. He is not bound to accept the BCBSM approved amount and is free to charge a reasonable and competitive amount.

Although the Commissioner empathizes with the Petitioner, it is clear that (as between Petitioner and BCBSM) the Petitioner is responsible for the balance of the anesthesiologist charges. The Commissioner finds the $861.77 paid by BCBSM for the XXXXXXXXXX, anesthesiology services is equal to or greater than the maximum allowable under its system of payments.


The Commissioner upholds the BCBSM final adverse determination. BCBSM is not required to pay an additional amount for Petitioner’s XXXXXXXXXXX, anesthesiology services. This is a final decision of an administrative agency. Under MCL 550.1915, any person aggrieved by this order may seek judicial review no later than sixty days from the date of this order in the circuit court for the county where the covered person resides or in the Circuit Court of Ingham County. A copy of the petition for judicial review should be sent to the Commissioner of the Office of Financial and Insurance Services, Health Plans Division, Post Office Box 30220, Lansing, MI 48909-7720.