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

ORDER

I
PROCEDURAL BACKGROUND

On August 9, 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

On XXXXXXXXXXXX, Petitioner underwent back surgery. Non-participating provider, XXXXXXXXXXXXX, M.D., billed procedure code 20931 (bone harvesting); procedure code 22554 (neck spine fusion); procedure code 22845 (insert spine fixation device); procedure code 63081(removal of vertebral body); procedure code 63082 (removal of vertebral body add-on) and procedure code 69990 (microsurgery add-on) for the surgical service. Dr. XXXXX, charged a total of $450 for the bone harvesting; Blue Cross and Blue Shield of Michigan (BCBSM) paid its maximum amount of $171.63. Dr. XXXXX charged $4,000 for the neck spine fusion; BCBSM paid one half of its maximum or $942.40. Dr. XXXXX charged $3,000 to insert a spine fixation device, BCBSM paid one half of the maximum or $417.62.Dr. XXXXX charged $5200 for removal of vertebral body, BCBSM paid its full maximum of $2441.05. Dr. XXXXX charged $1,500 for removal of vertebral add-on; BCBSM paid its maximum of $467.27. Finally Dr. XXXXX charged $1,000 for the microsurgery add-on and BCBSM paid $270.48, which is its full maximum amount. Dr. XXXXX’s total charges were $15,150; BCBSM paid a total of $4,710.45.

Petitioner claims that BCBSM is required to pay the full amount charged for his surgery. BCBSM claims that since Dr. XXXXX does not participate with BCBSM, he is not contractually bound to accept BCBSM’s approved amount as payment in full and is therefore free to bill Petitioner for the balance.

III
ISSUE

Whether BCBSM is required to pay any additional amount for the Petitioner’s XXXXXXXXX XXXX surgery?

IV
ANALYSIS

Petitioner’s Position

Petitioner claims that BCBSM is required to pay the full amount charged for his surgery. He believes that the amount paid by BCBSM is grossly lower than what other insurance companies pay for this care. Other neurosurgeons in Michigan charge relatively the same as Dr. XXXXX. No one charges the amount paid by BCBSM.

Petitioner claims that he was told that if he had a referral from his primary physician everything would be covered in full. In addition, Dr. XXXXX and his associates are the only neurosurgeons in the area. Petitioner claims that finding a surgeon in another area was not an option since he had a thirteen- year- old son who is severely mentally impaired and requires 24-hour care. Petitioner argues that it is BCBSM’s responsibility to pay for his surgery in full.

BCBSM’s Position

Petitioner has coverage through XXXXXXXXXXXXX, an experienced 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 argues the $4,710.45 it paid for Petitioner’s XXXXXXXXXXXXXX surgery is equal to the maximum amount payable under its system of payment for the procedures performed.

BCBSM further argues there were at least six neurological surgeons within an hour’s drive of the Petitioner’s home in XXXXXXX. 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. Any reasonably trained neurosurgeon could have performed Petitioner’s XXXXXXXXXXXXXX surgery.
2. Participating providers listed by BCBSM were capable of performing Petitioner’s surgery.
3. BCBSM’s denial of full payment for 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.

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 neurosurgeons within an hour’s drive 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 BCBSM for coverage details. It is therefore Petitioner’s responsibility to determine whether a physician participates with BCBSM.

In this case, Dr. XXXXX is a non-participating provider with BCBSM. He is not bound to accept the BCBSM approved amount and is free to charge a reasonable and competitive amount. There is no proof his 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 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 $4,710.41 paid by BCBSM for the surgery is the maximum allowable under its system of payments.

Petitioner was told that if he were referred to Dr. XXXXX by his primary care physician “everything would be covered in full”. Petitioner did not indicate who told him this. Therefore, it cannot be concluded that BCBSM misled him to believe it would pay the full amount charged.

V
ORDER

Therefore, the Commissioner ORDERS the final adverse determination of BCBSM dated August 2, 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.