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

ORDER

I
PROCEDURAL BACKGROUND

On August 5, 2002, XXXXXXXXXXXX (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 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 August 12, 2002. On August 26, 2002, the IRO provided its recommendation to the Commissioner.

II
FACTUAL BACKGROUND

On XXXXXXXX, Petitioner underwent back surgery. XXXXXXXXXXXXX was the surgeon and XXXXXXXXXXXXXX. assisted in the surgery. Both of these doctors are non-participating providers. Dr. Ehlert billed and BCBSM paid $15,880.50 for the surgery services. XXXXXXXXX billed $15,550 for his services and BCBSM paid $2,664.87.

Petitioner believes that Blue Cross and Blue Shield of Michigan (BCBSM) is required to pay substantially more for his surgery. BCBSM claims that since these surgeons do not participate with BCBSM, they are not contractually bound to accept BCBSM’s approved amount as payment in full and 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 XXXXXXX surgery?

IV
ANALYSIS

Petitioner’s Position

Petitioner does not dispute the amount paid for the services provided by XXXXXXX. However, Petitioner disputes the $2,664.87 that BCBSM paid for XXXXXXXX services since it is only a fraction of the $14,550 charged.

Petitioner states that the only reason cited by BCBSM for paying such a small amount for XXXXXXXX’s services was that it is their maximum payment amount. This leaves BCBSM’s reimbursement woefully short of the billed amount. Petitioner claims that BCBSM indicated it couldn’t reimburse more because the Petitioner signed an agreement to pay the balance of Dr. XXXXXXX charges. Petitioner claims this is a very poor excuse for not paying more to Dr. XXXXX.

Petitioner argues that it is BCBSM’s responsibility to pay for his surgery in full.

BCBSM’s Argument

Petitioner has coverage through XXXXXXXXXXXXXXXXXXX, 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. 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 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 paid the $15,880.50 for the surgical services provided by Dr. XXXXXX. BCBSM paid the full amount charged because Petitioner did not sign an agreement with Dr XXXXXX to pay for the balance. The $2,664.87 BCBSM paid for Dr. XXXXXXX services is equal to the maximum amount payable under its system of payment for the assistant surgical procedures performed. Dr. XXXXX billed for both surgical and assistant fees. Since he only assisted in the surgery he is entitled to the assistant fees. Two surgeons cannot be reimbursed for being the primary surgeon for the same surgery. BCBSM indicated in its May 16, 2002 final adverse determination letter that since Petitioner signed a prior financial liability statement with Dr. XXXXX, Petitioner is responsible for the balance.

BCBSM claims there were at least nine orthopedic surgeons in XXXXXXXXXXXX near Petitioner’s home in XXXXXXXX. BCBSM believes Petitioner had adequate opportunity to use the services of a participating surgeon.

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. Dr. XXXXXX was the primary surgeon for Petitioner’s operation and Dr.XXXXXX was the assistant surgeon.
2. Dr. XXXXX is entitled to assistant fees but both surgeons billed for the same procedure.
3. Only one surgeon can do a procedure and the second surgeon has to be the assistant.
4. Further reimbursement for Petitioner’s surgery by BCBSM 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-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 warning may be invalid if no participating providers were available within a reasonable distance. However, BCBSM provided proof that there were participating orthopedic surgeons within a shot distance 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 BCBSM for coverage details. It is therefore Petitioner’s responsibility to determine whether a physician participates with BCBSM.

In this case, Drs. XXXXXX and XXXXX 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 Dr. XXXXX is entitled to be reimbursed as the assistant surgeon. He cannot, however, be reimbursed as the primary surgeon. The Commissioner agrees with this conclusion. The Commissioner finds that the $2,664.87 paid by BCBSM for Dr. XXXXXXX’s assistant surgery services is the maximum allowable under its system of payments.

V
ORDER

Therefore, the Commissioner ORDERS that the final adverse determination of BCBSM dated May 16, 2002 is upheld. BCBSM is not required to pay an additional amount for Petitioner’s XXXXXXXXXXX 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.