Issued and entered November 6, 2002 by Frank M. Fitzgerald, Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On March 11, 2002, Attorney XXXXXXXXXXX, of XXXXXXXXXXX, XXXXXX, Michigan, on behalf of Petitioner XXXXXXXXXX, 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 on March 13, 2002.

A determination on medical issues was required. The Commissioner assigned the case to Permedion, an independent review organization (IRO). The Commissioner directed Permedion to provide the opinion and recommendation of a medical expert. The IRO completed its review on March 27, 2002, and sent it to the Office of Financial and Insurance Services (OFIS). (Copy attached).

II
FACTUAL BACKGROUND

Petitioner is a XX-year-old woman who is a member of Physicians Health Plan of Mid-Michigan (PHPMM), covered under her husband’s HMO Certificate of Coverage, through the XXXXXXXXXXX.

Petitioner has undergone a series of major brain surgeries to remove tumors at the brain stem, and as a result, functions at a very low mental level. She has had this condition throughout her adult life and is prone to seizures and depression. She is emotionally labile, exhibits extremely poor judgment, and suffers from blocked thoughts. Physically, she requires the use a walker, has very poor grip strength, and sleeps a large portion of the day. She has received home care, paid for by PHPMM since XXXXX XXXX, through a series of aides and day care programs. Her attorney claims recent medical records submitted to PHPMM verify Petitioner’s condition is worsening.

On March 1, 2002, PHPMM issued a final adverse determination in Petitioner’s case, denying any further coverage for her home care. PHPMM reached this determination based on its contention that the services are custodial care and not a covered benefit under the HMO Certificate of Coverage.

III
ISSUE

Whether, according to its HMO Certificate of Coverage, PHPMM properly denied Petitioner continued coverage for home care services?

IV
ANALYSIS

Petitioner’s Argument

Petitioner‘s attorney, XXXXXXXXXXX, argues on her behalf that PHPMM has paid for Petitioner’s home health care as a covered benefit for the last XXXX years (since XXXXX XXXX), so it should not be able to discontinue this coverage now. XXXXXXX points out that on XXXXX, XXXX, PHPMM informed Petitioner of its decision to discontinue payment for her home health care, but only 10 days earlier, it had decided to pay for 95 visits from Home Health Professionals Inc. that took place between XXXX XX, XXXX, and XXXXX XX, XXXX. XXXXXX asserts that because PHPMM voluntarily undertook payment of Petitioner’s home health care over a period of XXXX years, Petitioner has come to rely on this coverage. Petitioner’s current arrangements for home care with XXXXX (at a cost of $45.00 per day) and XXXXXXXXXX (at a cost of $324 per month) were made based on her expectation that PHPMM would continue to cover these services as it has in the past.

Petitioner’s attorney also argues Petitioner’s medical condition is slowly worsening, and the HMO Certificate of Coverage allows for coverage of health-related services when a member’s conditions is deteriorating. Section 11.1(D)(2) of the HMO Certificate of Coverage states:

Section 11.1 Exclusions. Except as may be specifically provided in Section 10 or through a Rider to the Policy, the following are not Covered:

4. Custodial care; domiciliary care; private duty nursing; respite care; rest cures. (Custodial care means (1) non-health related services, such as assistance in activities of daily living, or (2) health-related services which do not seek to cure or which are provided during periods when the medical condition of the patient is not changing or (3) services which do not require continued administration by trained medical personnel.)
   (Emphasis added).

XXXXXXXXX asserts health-related home care is a covered benefit under the certificate of coverage, if the member’s condition is changing. It is undisputed that Petitioner’s physical and mental health is deteriorating, so Petitioner’s home health care does not qualify as custodial care; therefore, those services are not excludes from coverage. XXXXXXXXXX adds that it is only a matter of time before some form of skilled care will become necessary for Petitioner—whether it is inpatient or outpatient care. He emphasizes that allowing Petitioner to receive care at home, with her husband, will slow her deterioration and save everyone money and emotional resources.

XXXXXXXXXXX also argues PHPMM should continue its coverage of Petitioner’s home health care, even if it is excluded by the PHPMM HMO Certificate of Coverage. He says a simple cost benefit analysis should lead PHPMM to this determination. He believes PHPMM should set aside its final adverse determination and continue to provide coverage for Petitioner’s home health care, as it did since XXXXX XXXX, because the current care Petitioner receives at home is cheaper than an occasional inpatient hospitalization. His cites a X-week stay at Sparrow Hospital by Petitioner, following a mental breakdown, in which she was placed in the hospital’s psychiatric facility and then transferred to a Community Mental Health facility. He asserts this cost far more than Petitioner’s daycare at her own home. Petitioner and her husband believe that if she were left unattended for any length of time, her physical and mental deterioration would accelerate, and she would be at risk of harming herself.

PHPMM’s Argument

PHP-MM relies on the exclusionary language in its HMO Certificate of Coverage, Section 11.1(D) (quoted in Petitioner’s Argument), to support its March 1, 2002, final adverse determination in Petitioner’s case. PHPMM’s final adverse determination letter to Petitioner simply states, “PHPMM has denied your request for custodial care because it is not a covered benefit.”

In a December 4, 2001, letter to Petitioner, PHPMM indicated that its authorization of health services was subject to the terms, conditions, limitations, and exclusions of the benefit contract at the time the services were provided, and based upon information it had at the time. The letter further indicated that new information or changes in existing information could result in a different decision after the claim was received and reviewed by PHP. The letter clarified the fact that the authorization was not a guarantee of payment of the claim, and that a decision to pay a claim is made only after the services have been rendered and submitted with information sufficient to make a payment determination.

PHPMM later said in a December 14, 2001, adverse determination letter that Petitioner originally requested coverage for custodial services for a temporary period of 30 days. PHPMM states it granted the temporary coverage and then provided it far beyond that period of time—for four years. In its March 22, 2002, position statement to Permedion, PHPMM indicated that during the last quarter of 2001, it conducted a review of authorizations and claims in its entire system. It was only then that it discovered it had been paying for Petitioner’s home care in error.

PHPMM argues Petitioner’s home care is custodial care and specifically excluded from coverage under her HMO Certificate of Coverage. It is PHPMM’s position that there is no medical service being provided to Petitioner by her home health aides. PHPMM notes Petitioner is currently taking an anti-psychotic drug, an anti-seizure drug, and an anti-depressant. None of the drugs require administration by a health care professional. Petitioner’s case management assessment indicates she has predominantly mild impairment levels in the relationships and vocational domains. Where she suffers extreme impairment is in the areas of personal hygiene and self-care, activities of daily living, and self-direction. PHPMM points out these impairments are not medical. PHPMM also points out Home Health Professionals, which takes Petitioner to and from day programs, does not provide a medical service. Petitioner’s case management assessment contains documentation that she is not at risk of committing suicide or homicide and remains fairly stable. Also, deterioration of Petitioner’s condition is not supported by any medical documentation provided to PHPMM. PHPMM asserts documentation provided by Petitioner’s caregivers supports its finding that they are not providing medical services.

PHPMM considered other coverage available to Petitioner under the HMO Certificate of Coverage. The certificate does provide for coverage of home health agency services, according to Section 10.14, and the certificate definition of skilled care service, states:

Section 10.14 Home Health Agency Services. Part-time, intermittent Health Services of a Network Home Health Agency, when provided under the direction of your Primary Physician. Home Health Agency services are Covered only when Skilled Care Services are Medically Necessary. Home Health Agency services must be provided in your home, by or under the supervision of a registered nurse and approved in advance by the PLAN.

*                *                *

“Skilled Care Services” – skilled nursing, skilled teaching, and skilled rehabilitation services which meet the following criteria:

1. Must be delivered or supervised by licensed technical or professional medical personnel in order to obtain the specified medical outcome and provide for the safety of the patient;
   
2. Are ordered by a Physician; and
   
3. Are Medically Necessary for the treatment of the Sickness, Injury or Pregnancy.

Determination of benefits for Skilled Care Services is made based on both the skilled nature of the service and the need for Physician-directed management. Skilled Care Services are not determined by the availability of caregivers to perform them; the absence of a person to perform an unskilled service does not cause the service to become “skilled.”

PHPMM concluded there are no services being provided to Petitioner that amount to skilled services. Her home care presently is nothing more than companionship, transportation and supervision. No information has been presented to PHPMM that indicates Petitioner’s home care involved any sort of medical services or physician directed medical management. The information given to PHPMM shows Petitioner’s home caregivers provide services such as dressing her and doing laundry. Therefore, the level of home care Petitioner is receiving is custodial in nature, which does not rise to the level of skilled care, and is excluded from coverage according the HMO Certificate of Coverage.

PHPMM argues its past coverage of Petitioner’s custodial care does not create an entitlement to a continued exception from the terms of the HMO Certificate of Coverage. PHPMM asserts it initially allowed coverage for the services as an exception to the exclusion from coverage, because in XXXX, Petitioner’s medical condition warranted a temporary offering of the non-covered benefit. Payment for her custodial care in the second half of XXXX was made, because the services had already been performed, and PHPMM believed denial of the services without notification would have been inappropriate. However, the December 14, 2001, notice to Petitioner that her custodial care was no longer going to be covered provided her with adequate time to make alternative arrangements for services. PHPMM asserts that the fact that it paid for excluded services in the past should not be construed as creating a benefit, but rather considered an accommodation that extended well beyond the time period for which it was originally granted.

IRO’s Recommendation

A physician, certified by the American Board of Internal Medicine, reviewed this case. The medical expert recommended that PHPMM’s final adverse determination denying Petitioner coverage for custodial care be upheld.

The reviewer found it was appropriate for PHPMM to conclude Petitioner is not owed payment for any further custodial care. The medical expert stated Petitioner was initially granted only temporary coverage of her custodial care, and there is no documentation extending this temporary coverage. However, payment for the services continued until PHPMM issued the its denial of further coverage, effective January 14, 2002. The reviewer indicated PHPMM’s coverage of Petitioner’s custodial care should not be construed as an acceptance of contractual obligation to continue the coverage in the future. The medical expert believes PHPMM correctly concluded it is not financially liable for any more of Petitioner’s custodial care services.

Commissioner’s Review

The Commissioner carefully reviewed the arguments presented by the parties and the analysis provided by the Permedion medical expert. The Commissioner concurs with the recommendation of the Permedion medical expert that PHPMM’s final adverse determination in this matter should be upheld.

Petitioner’s arguments for the reversal of PHPMM’s final adverse determination are not compelling. Even if Petitioner’s worsening medical condition would prevent Section 11.1(D)(2) of the HMO Certificate of Coverage from excluding her home care, the facts presented to the Commissioner for review indicate those service are still not covered. The Commissioner did not receive evidence that Petitioner’s home care is anything other than non-medical custodial care for daily living activities. As such, those services are explicitly excluded from coverage under Section 11.1(D)(1,3) of the HMO Certificate of Coverage, and clearly do not qualify for coverage as home health agency services under Section 10.14 and the certificate definition of skilled care services.

Furthermore, Petitioner’s reliance on PHPMM’s future coverage of her home care is not justified, because PHPMM’s past payment was done in conflict with the HMO Certificate of Coverage, and because Petitioner received ample notice that PHPMM would no longer pay for the services. PHPMM never accepted coverage of her home care as a continuing benefit after it granted a temporary 30-day period of coverage. It actually reserved the right to deny the coverage at any time in the future.

The Commissioner finds that PHPMM’s final adverse determination in this case is consistent with the terms of the HMO Certificate of Coverage that governs the administration of Petitioner’s health benefits. Also, the Commissioner agrees with the Permedion medical expert that Petitioner’s home care is not a covered benefit under the HMO Certificate of Coverage. Therefore, PHPMM’s denial of coverage for Petitioner’s custodial care, effective January 14, 2002, is valid.

V
ORDER

Therefore, it is ORDERED that the March 1, 2002, final adverse determination by PHPMM in this case is upheld. PHPMM is not liable for payment of Petitioner’s home health/custodial care services, effective January 14, 2002.

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 60 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.