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

ORDER

I
PROCEDURAL BACKGROUND

On July 15, 2002, XXXXXXXXXXX (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 16, 2002. On September 3, 2002, the IRO provided its recommendation to the Commissioner.

II
FACTUAL BACKGROUND

In XXXX, Dr. XXXXXXXXXXXXXX provided treatment for Petitioner’s varicose veins. On XXXXXXXXXXXXXXX, Dr. XXXXXX charged $134 for procedure code 99242 (consultation). BCBSM approved $96 and paid $35.10 after applying co-pays and deductibles. Also on this date, procedure code 93965(venous study) was provided at a cost of $173. BCBSM approved $83.51and paid $66.81after a 20% co-payment.

On XXXXXXXXXX, Dr. XXXXXX performed a surgical ligation on Petitioner; procedure code 37720 (ligation and complete stripping of veins). Dr. XXXXXXX charged $1324 for this procedure. BCBSM approved $530 and paid $424.50 after applying a 20% co-payment. Also, procedure code 36471(injection of sclerosing multiple veins) was provided on this date. The doctor charged $335 and BCBSM approved one half of its maximum amount or $33.30 and paid $26.56 after 20% co-pay. The anesthesia charge for these services was $600. BCBSM approved $410 and paid $328.27 after applying a 20% co-pay.

On XXXXXXXXXXXXXXXX and XXXXXXXXXXXXXXXX, the doctor provided Petitioner with injections of sclerosing solutions, multiple veins. For each of these visits the doctor charged $335. BCBSM approved $91.14, its full maximum amount, and paid $72.92 after the 20% co-pay.

Petitioner requests BCBSM to pay significantly more for his treatment. BCBSM claims that since Petitioner’s doctor does not participate with BCBSM, he is not contractually bound to accept BCBSM’s approved amount as payment in full and he is 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 XXXX treatment of his varicose veins?

IV
ANALYSIS

Petitioner’s Position

Petitioner is a XXXXXXXXXXXXXX old man who has had varicose veins of his left leg for many years. His left leg is significantly larger than his right leg. Petitioner suffered pain and aching in his leg because of his condition. Petitioner’s physician referred him to Dr. XXXXXXX for treatment.

Petitioner received treatment from Dr. XXXXXXX which improved his condition. Petitioner argues that the surgery provided by Dr. XXXXXXX is not provided by anyone else in the area. Petitioner contends that BCBSM should be required to pay the amount charged even though his surgeon is not a participating doctor with BCBSM.

Petitioner argues that his care was medically necessary and is not cosmetic in any way.

BCBSM’s Position

Petitioner has coverage through XXXXXXXXXXXXXXXXXXXXXXXXXX, an industry rated group. The Community Blue Group Benefit Certificate governs his 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). 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 that the $1025.08 it paid for Petitioner’s care provided by Dr. XXXXXXX is equal to the maximum amount payable under its system of payment for the procedures performed less applicable co-payments.

BCBSM claims that any competent general surgeon could have performed Petitioner’s varicose vein treatment. BCBSM indicated there were 27 participating general surgeons within five miles of the Petitioner’s home in XXXXXXXXXXXXXXXXXX. BCBSM claims Petitioner had adequate opportunity to use the services of a participating surgeon.

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

Independent Review Organization (IRO) Recommendation

The IRO recommended and concluded:

1. The procedures performed by Dr. XXXXXXX could have could have performed by any general or vascular surgeon.
2. There were participating surgeons in Petitioner’s area that could have performed these services.
3. BCBSM’s reimbursement for the services provided by Dr. XXXXXXX was correct, reasonable and appropriate.

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 this “approved amount” 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 general surgeons within five miles of the 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 Respondent for coverage details. It is Petitioner’s responsibility to determine whether a physician participates with BCBSM.

In this case, Dr. XXXXXXX is a non-participating provider with BCBSM. As such, he is not bound to accept the BCBSM approved amount and is free to charge a reasonable and competitive amount. There is no proof Dr. XXXXXXX’s 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 any competent general surgeon could have performed the services. The IRO also concluded that participating general surgeons located a short distance from Petitioner’s home could provide this care. The IRO further concluded that BCBSM is not required to pay the full charges for this care and that the amount charged for this care was reasonable. The Commissioner agrees with these conclusions. The Commissioner finds that the $4,1025.08 paid by BCBSM for the surgery is the maximum allowable under its system of payments and applicable co-pays.

V
ORDER

Therefore, the Commissioner ORDERS that the final adverse determination of BCBSM dated February 25, 2002 is upheld. BCBSM is not required to pay an additional amount for Petitioner’s XXXX treatment by Dr. XXXXXXX. 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.