Issued and entered November 22, 2002 by Frank M. Fitzgerald, Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On October 30, 2002, XXXXXXX filed a request for external review with the Commissioner of Financial and Insurance Services (Commissioner) under MCL 550.1901 et seq., the Patient’s Right to Independent Review Act. The request was filed on behalf of Petitioner, XXXX XXXXXX. The Commissioner’s staff assessed the material submitted by the Petitioner and accepted the request.

The issue involved is contractual in nature and not a medical issue. Therefore, review by an Independent Review Organization (IRO) is not required. The Commissioner reviews contractual issues under MCL 550.1911(7). On November 6, 2002, the Office of Financial and Insurance Services (OFIS) received from US Health and Life Insurance Company (USHL) the information it used in making its adverse determination.

II
FACTUAL BACKGROUND

On November 21, 2000, Petitioner received services from XXXXXXX Hospital (XXXXXX). XXXXXXXXX, believing Petitioner’s health carrier was Health Alliance Plan (HAP) submitted the bill to HAP. It however denied payment because the Petitioner was no longer covered under a HAP Certificate of Coverage.

In February 2001, XXXXXXXXX billed Petitioner. Petitioner contacted XXXXXXXX and provided correct insurance information. On March 8, 2001, XXXXXXX submitted the charges to PPOM, the third party claims administrator used by USHL. Neither PPOM nor USHL paid XXXXXXX for nearly a year. XXXXXXXX then resubmitted the claim to PPOM on January 28, 2002. On January 31, 2002, USHL received the XXXXXXXXXX claim, but it denied payment because it received the claim after the 12-month filing deadline.

III
ISSUE

Whether US Health and Life Insurance Company complied with the terms of its Certificate of Insurance when it denied payment for hospital services performed on November 21, 2000?

IV
ANALYSIS

Petitioner’s Argument

In February 2001, XXXXXXX received information regarding Petitioner’s current health insurance carrier, USHL. Petitioner argues XXXXXXXXX submitted the charges to PPOM in a timely manner according to the Certificate of Insurance. Petitioner noted evidence provided by XXXXXXXX. In particular, XXXXXXXXXX stated:

The provider admits that they originally submitted the claim to HAP, the patient’s former health insurance carrier in November 2000 and received a denial. In February 2001, a bill for $1,536.05 was sent, by XXXXXXXX Hospital, to [Petitioner’s] home. Upon receiving the account statement, [Petitioner] phoned XXXXXXXX and provided them with her updated insurance information. XXXXXX logged the phone call … updated her records to reflect the correct insurance information, and submitted the claim to PPOM on March 8, 2001. [emphasis added]

Petitioner claims XXXXXXXX submitted the claim to PPOM timely and USHL is obligated to pay the claim.

US Health and Life Insurance Company Argument

On August 29, 2002, USHL issued its final adverse determination. USHL upheld its denial for medical services performed on November 21, 2000, alleging it received the claim after the filing deadline. USHL states:

• On 1/31/02, USHL received a claim for services provided by XXXXXX Hospital on 11/21/00, through PPOM. Billed amount was $1,536.00. Re-priced amount (fee accepted by XXXXXX Hospital) was $626.92.
• On 2/14/02, USHL sent an EOB to member and the hospital denying benefits because claim was submitted untimely (more than one year after the date of service).

Under the Certificate of Coverage, the USHL policy states in part:

Proof of Loss Written notice of claim must be given to the Administrator within 20 days after the commencement of any claim covered by the Policy or as soon thereafter as is reasonably possibly.

Written proof of claim must be given to the Administrator within 12 months of the date in which the expense was incurred.

Payment of any claim will be made to the person rendering the services, unless you or your Dependent furnishes paid receipts with his proof of claim.

Failure to furnish such proof within the time required shall not invalidate nor reduce any claim if it shall be shown not to have been reasonably possible to furnish such proof within the required time and that proof was given as soon as was reasonably possible.

USHL believes it has properly applied the terms of the policy language when it denied payment of the medical charges.

Commissioner’s Review

The Commissioner reviewed the documents and arguments presented by the parties. The issue in this case is whether XXXXXX Hospital submitted the claim for services according to the provisions of the policy. The policy language controls the analysis of this case. USHL policy language states written notice of claim must be given to the Administrator (PPOM) within 20 days after the commencement of any claim covered by the Policy or as soon thereafter as is reasonably possibly. It further requires the provider to submit a written proof of claim to the Administrator within 12 months from the date of the services.

The evidence submitted by Petitioner demonstrates XXXXXX first learned about USHL in February 2001. The evidence also demonstrates XXXXXXXXX submitted the claim soon thereafter on March 8, 2001 (approximately 3½ months after the medical services were performed). The claim was not sent to PPOM within 20 days because XXXXXXXX was not aware USHL was the proper carrier.

The Certificate however provides additional time to file a claim. It states notice of the claim must be given as soon as reasonably possible, not to exceed 12 months. The evidence shows XXXXXX submitted the claim soon after it discovered USHL was the proper carrier. The Commissioner finds XXXXXX submitted the claim within a reasonable time after it learned USHL was the proper carrier. XXXXXX therefore provided the claim according to the USHL Certificate.

V
ORDER

The Commissioner ORDERS that the final adverse determination of US Health and Life Insurance Company is reversed. USHL must pay for the medical services submitted by XXXXXX in this matter. USHL shall pay for such services within 60 days of the date of this Order and shall provide Petitioner and the Commissioner notice of payment within seven days from the date payment is made.

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.