Issued and entered December 19, 2002 by Frank M. Fitzgerald, Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On October 25, 2002, the Petitioner, XXXXXXXXXXX filed a request for external review with the Commissioner of Financial and Insurance Services (Commissioner) under the Patient’s Right to Independent Review Act, MCL 550.1901 to MCL 550.1929. After a review of the material submitted, the Commissioner accepted the request. The issue involved is medical in nature. The Commissioner therefore assigned it to an independent review organization (IRO) on November 1, 2002. On November 18, 2002, the IRO provided its recommendation to the Commissioner.

II
FACTUAL BACKGROUND

On June 24, 2002, the Petitioner underwent back surgery. Non-participating provider, XXXX XXXXXXX, was the surgeon. Dr.XXXXXXXX provided technical surgical assistance. The charges and payments for this surgery are:

XXXXXXX

XXXXXXXXX (Technical Surgical Assistance – TSA)

BCBSM did not pay anything for procedure code 20931 since it was part of a more costly procedure performed through the same incision. BCBSM paid $2341.05, which is $100 less than its full maximum for procedure code 63081. The total amount charged was $15,350 and BCBSM paid a total of $4,638.82.

In addition, XXXXXXXXXX provided technical surgical assistance(TSA) for the Petitioner’s surgery. BCBSM pay 20% of its maximum payment amount for TSA. BCBSM paid $1,042.14 of the $3,425 charged for the TSA.

The Petitioner believes that BCBSM is required to pay substantially more for her surgery. BCBSM believes that since the surgeons do not participate with BCBSM, they are not contractually bound to accept BCBSM’s approved amount as payment in full. They are free to bill the Petitioner for the balance.

III
ISSUE

Is Blue Cross and Blue Shield of Michigan (BCBSM) required to pay an additional amount for the Petitioner’s XXXXXXXXXXX surgery?

IV
ANALYSIS

Petitioner’s Argument

The Petitioner argues that her primary care giver, XXXXXXXXl, sent her to XXXXXXX. XXXXXXXXXXXXXX is the only neurosurgical office in the Petitioner’s area. After BCBSM’s payment for her surgery, there is a balance of more than $13,000. She did not expect BCBSM to pay the full amount charged but BCBSM should have paid much more for her care.

The Petitioner has spoken with other family members who are subscribers of BCBSM. They have medical bills covered fully for surgeries. She is nor sure how to answer them as to why she is required to pay such an enormous amount for this surgery.

BCBSM’s Argument

Petitioner has coverage through “XXXXXXXXXXXXXXX”, an experienced rated group. The Community Blue Group Benefit Certificate governs her coverage. 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 selects 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.

The Certificate also provides that if more than one procedure is provided in a surgery BCBSM will pay its full-approved amount for the primary procedure and one half of the approved amount for any secondary procedures.

BCBSM determines the payment level for each service by applying a Resource Based Relative Value Scale (RBRVS). This 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 argues the $4,638.82 it paid for XXXXXXXXXXXXXXXXXX services is equal to or greater than the maximum amount payable under its system of payment for the procedures performed. BCBSM recognizes it under paid for procedure code 63081 by $100. But it also argues it overpaid $135.24 for procedure code 69990 when it paid the full maximum when it should have paid one half the maximum amount since this was a secondary procedure. In addition, BCBSM argues it should not have paid the $200 for procedure code 3820 since it was not documented in the operative report. Therefore, BCBSM asserts that it overpaid the Petitioner $335.24 for these services. BCBSM has agreed not to recoup the overpayment.

For the TSA services provided by XXXXXXX the $1,042.14 it paid is equal to or greater than the maximum required under the Certificate. BCBSM argues it overpaid $188.48 for procedure code 22554 since this is a secondary procedure and BCBSM is only required to pay half of its maximum payment amount. BCBSM has agreed to not attempt to recoup the overpayment.

BCBSM further argues there were at least six participating neurological surgeons in XXXX within 38 miles drive of the Petitioner’s home in XXXXXXX and nine more in XXX within 50 miles of XXXXX. BCBSM believes Petitioner had adequate opportunity to use the services of a participating surgeon.

BCBSM argues that it has paid the proper amount under the Certificate and is not required to pay any additional amount.

Independent Review Organization (IRO) Recommendation

The IRO recommended and concluded:

1. The Petitioner’s XXXXXXXXXX surgery did not require any special skills other than the standard skills of a neurosurgeon.
2. A BCBSM participating provider specializing in neurosurgery could have performed the Petitioner’s surgery.
3. BCBSM’s denial of full payment for the Petitioner’s surgery should be upheld.

Commissioner’s Review

The Certificate of coverage controls the analysis of 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 he 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, BCBSM provided proof that there were participating neurosurgeons within 50 miles of her home. The Commissioner finds that 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 the Respondent for coverage details. It is therefore Petitioner’s responsibility to determine whether a physician participates with BCBSM.

In this case, XXXXXXXXXXXXX are non-participating providers with BCBSM. They are not bound to accept the BCBSM approved amount and are free to charge a reasonable and competitive amount. There is no proof their charges were unreasonable or excessive.

The Certificate also clearly stated that non-participating providers are not bound to accept the approved amount and may charge more. The excess charges are the Petitioner’s responsibility. The Petitioner is therefore responsible for the balance.

The IRO concluded that the surgery could have been performed by any reasonably trained neurosurgeon and the participating neurosurgeons listed by BCBSM could provide this care. The IRO also concluded BCBSM is not required to pay full charges for this care. The Commissioner agrees with these conclusions. The Commissioner also finds the $5,680.96 paid by BCBSM for the surgery is equal to or greater than the maximum allowable under its system of payments.

V
ORDER

The final adverse determination of BCBSM dated September 12, 2002 is upheld. BCBSM is not required to pay an additional amount for the Petitioner’s XXXXXXXX surgery.

This is a final decision of an administrative agency. Under MCL 550.1915, MCL 600.631, MCR 7.101 and MCR 7.104, 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.