Issued and entered March 21, 2003 by Frances K. Wallace, Chief Deputy Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On February 27, 2003, XXXXXXXXXXXX (“Petitioner”) filed a request for external review with the Commissioner of Financial and Insurance Services under the Patient’s Right to Independent Review Act (“PRIRA”) MCL 550.1901 et seq. After a review of the material submitted, the Commissioner accepted the request on March 6, 2003.

The issue involved in the adverse determination is contractual. The Commissioner reviews contractual issues pursuant to MCL 550.1911(7). As a result, review by an independent review organization is not required. The Commissioner notified Blue Cross and Blue Shield of Michigan (BCBSM) of Petitioner’s filing and requested the information it used in making its adverse determination. The Office of Financial and Insurance Services received the BCBSM information on March 17, 2003.

II
FACTUAL BACKGROUND

The Petitioner had back surgery on XXXXXXXXXXXXXXXXXand again on XXXXXXXXXXXX. XXXXXXXXXX., of XXXXXXXXXXXXXXXXXXXXXXXXXX, a non-participating provider, performed the surgeries. For the first surgery, the doctor charged $3,700.00 for procedure code 63030. BCBSM approved and paid $1,240.28 to the Petitioner. He also charged $1,200.00 for procedure code 63035. BCBSM approved and paid $268.29 for this procedure. For the second surgery, he charged $4,400.00 for procedure code 63042. BCBSM approved and paid $1,818.58. He also charged $1,000.00 for procedure code 69990. BCBSM approved and paid $270.48.

Petitioner believes that BCBSM is required to pay substantially more for his surgeries. BCBSM believes that since the doctor does not participate with BCBSM, he is not contractually bound to accept BCBSM’s approved amount as payment in full. He is free to bill Petitioner for the balance.

III
ISSUE

Is Blue Cross and Blue Shield of Michigan (“BCBSM”) required to pay an additional amount for Petitioner’s XXXXXXXXXXX and XXXXXXXXXX, surgeries?

IV
ANALYSIS

Petitioner’s Position
Petitioner has BCBSM through his employer and through his wife’s employer. His employer is paying a monthly premium of $993.00 to cover both the Petitioner and his wife. His wife’s employer is paying a premium of $663.00 a month to also cover both of them.

The Petitioner argues that BCBSM is receiving premiums from both of their employers and should reimburse each claim twice, not exceeding the total charge. In addition, he believes the amount approved for each claim is far too low considering the complexity of the operation and the skill level required by the neurosurgeon.

The Petitioner believes that BCBSM is required to pay substantially more for her surgery.


BCBSM’s Argument

Petitioner has coverage under the Professional Services Group Benefit Certificate. Rider RAPS (Reimbursement Arrangement for Professional Services) also applies. The Petitioner’s wife has coverage under the Community Blue Group Benefit Certificate.

Under these certificates, 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.

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 the $1,517.86 it paid for the XXXXXXXXXXXXX, surgery and the $2,089.06 it paid for the XXXXXXXXXX surgery are equal to the full maximum amounts payable under its system of payment for the procedures performed. This conforms to BCBSM’s payment provisions in the Certificate. BCBSM also found no extenuating circumstances to warrant additional payment.

BCBSM claims that participating physicians were available to perform the back surgery. BCBSM found four participating surgeons whose specialty is neurosurgery in XXXXXXXXX and two in XXXXXXXXXXX. Both of these locations are approximately the same distance from the Petitioner’s home in XXXXXX as Dr. XXXXX office in XXXXXXX. Therefore, BCBSM claims that Petitioner was not limited to the non-participating physician he used.

BCBSM also provided the coordination of benefits language in the certificate of Petitioner’s wife. This language is designed to ensure that the secondary contract does not issue duplicate or overpayments for the services covered under the primary contract. BCBSM argues that since it paid the maximum amount allowable under the Petitioner’s primary plan no payment is required under his wife’s secondary plan.

BCBSM claims that it has paid the proper amount under the Certificates for the Petitioner’s surgery and is not required to pay any additional amount.

Commissioner’s Review

The Certificates of Coverage controls the analysis in this matter. The primary Certificate defines the term “Non-participating Provider” as:

Physicians, other health care professionals or facilities that have 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 that he or she 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 provision may be invalid if no participating providers were available within a reasonable distance. However, participating neurosurgeons are located within a reasonable distance from Petitioner’s home.

In this case, the physician 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 evidence his charges are unreasonable or excessive.

Had the Petitioner used a participating surgeon he would not be responsible for the balance.

The Community Blue Group Benefit Certificate contains the coordination of benefits language that states in part:

To the extent that the services covered under this Certificate are also covered and payable under another group health care plan, we will combine our payments with that of the other plan to pay the maximum amount we would routinely pay for the covered services.

This language reduces the liability of the group when it is the secondary coverage and can lower the cost of the premium paid.

The Commissioner finds the $1,517.86 paid by BCBSM for the XXXXXXXXXXXXXXXX back surgery and the $2089.06 it paid for the XXXXXXXXXXXX back surgery under the Petitioner’s primary Certificate are equal to or greater than the maximum allowable under its system of payments. Therefore, BCBSM is not required to pay any additional amount for this care under his wife’s secondary Certificate.

V
ORDER

BCBSM’s February 10, 2003 final adverse determination is upheld. 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.