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

ORDER

I
PROCEDURAL BACKGROUND

On August 1, 2002, XXXXXXXX (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 550.1901et seq. After reviewing 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 August 8, 2002. On August 22, 2002, the IRO provided its recommendation to the Commissioner.

II
FACTUAL BACKGROUND

On XXXXXXX, Petitioner underwent back surgery which was performed by non-participating providers, XXXXXXXXXX and XXXXXXXXXX. XXXXXXX and XXXXX billed for this surgery under procedure code 63047 (laminotomy, lumbar); procedure code 63048 (each additional segment cervical, thoracic, or lumbar); procedure code 22612 (arthrodesis, lumbar); and procedure code 20938 (structural, bicordical or tricortical).

The doctors charged a total of $4,446 for the laminotomy. Blue Cross and Blue Shield of Michigan (BCBSM) approved $1,556.88 for this service and paid $1,245.51 after subtracting a 20% co-payment. BCBSM claims it should only have paid one half of the approved amount so an overpayment of $778.44 resulted. The doctors charged $882 for the additional segment. BCBSM approved $354.05 and paid $283.24 after deducting a 20% co-payment. The doctors charged $3,675 for the arthrodesis. BCBSM approved $1989.50 and paid $1,211.06 after subtracting the $778.44 overpayment for the laminotomy. The amount charged for the structural was $570. BCBSM approved and paid $286.2 for this care.

Petitioner claims that BCBSM is required to pay substantially more for her surgery. BCBSM believes that since the doctors 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 Petitioner for the balance.

III
ISSUE

Whether Blue Cross and Blue Shield of Michigan (BCBSM) is required to pay any additional amount for Petitioner’s XXXXXXXXXX surgery?

IV
ANALYSIS

Petitioner’s Argument

Petitioner states that her physician, XXXXXXXXXXX, considered her individual circumstances and diagnosis and referred her to XXXXXXXXXXXXX based on their skills and experience.

Petitioner contends that sciatic nerve pain down her leg kept her from sitting and after lying down her pain became agony. An MRI showed a complete pinching of Petitioner’s nerve. Petitioner claims that the doctors arranged for her surgery practically on an emergency basis. Petitioner’s back surgery included a fusion.

Petitioner argues that BCBSM is responsible to pay for her surgery in full. She states that she has not signed any document agreeing to pay the balance of the cost of this care.

BCBSM’s Argument

Petitioner has coverage through XXXXXXXXXXXX, an area rated group. Comprehensive Health Care Co-payment Certificate Series CMM 250 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 and 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 RBRVS reflects the resources required to perform each service. It includes physician time, specialty training, malpractice premiums, practice expenses and overhead. BCBSM claims that it regularly reviews the payment level to address the effects of changing technology, training, and medical practice.

BCBSM claims the $3026.01 it paid for Petitioner’s XXXXXXXX surgery is equal to the maximum amount payable under its system of payment for the procedures performed minus applicable co-payments.

BCBSM further claims there were at least five neurological surgeons within an hour’s drive of Petitioner’s home in XXXXXXXX. BCBSM believes Petitioner had adequate opportunity to use the services of a participating surgeon. BCBSM recognizes that Petitioner’s network doctor referred her to XXXXXXXXX and XXXXXX.

BCBSM claims 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. Petitioner’s XXXXXXX surgery was not done on an emergency basis.
2. The services provided Petitioner were available from participating providers.
3. There was no basis for `Petitioner to have gone outside the network of participating providers.
4. Further reimbursement for the XXXXXXX surgery is not warranted.

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-participating provider is not bound to accept it as payment in full.

Section 2 of the RAPS Rider informs a member that 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 warning may be invalid if no participating providers were available within a reasonable distance. However, BCBSM provided proof that there were participating plastic surgeons within an hour’s drive of Petitioner’s 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, XXXXXXXXXXXX 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 Petitioner’s responsibility. Petitioner is therefore responsible for the balance.

The IRO concluded that the surgery was not an emergency and there was no basis for Petitioner to have gone outside the network of participating providers. The Commissioner agrees with these conclusions. The Commissioner also finds the $3,026.01 paid by BCBSM for the surgery is the maximum allowable under its system of payments.

V
ORDER

Therefore, the Commissioner ORDERS that the final adverse determination of BCBSM dated July 8, 2002 should be upheld. BCBSM is not required to pay an additional amount for Petitioner’s XXXXXXXXX surgery.

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.