Issued and entered March 31, 2003 by Frances K. Wallace, Chief Deputy Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On November 22, 2002, XXXXXXXXXXXXXXXX, on behalf of his daughter XXXXXXXXX XXXXXXX (Petitioner), filed a request for external review with the Commissioner of the Office of Financial and Insurance Services (Commissioner) under the Patient’s Right to Independent Review Act, MCL 550.1901 et seq. After an assessment of the material submitted, the Commissioner accepted the request.

Petitioner’s case required a determination on medical issues, so the Commissioner assigned the case to the Maximus Center for Health Dispute Resolution (CHDR), an independent review organization (IRO). The IRO provided the opinion and recommendation of a medical expert. The IRO completed its review on December 19, 2002, and sent it to the Office of Financial and Insurance Services (OFIS).

II
FACTUAL BACKGROUND

Petitioner is a Blue Cross Blue Shield of Michigan (BCBSM) member. She seeks full reimbursement for inpatient eating disorder treatment performed from XXXXXXXXX – XXXXXXXXXXXXXX. Petitioner entered the hospital, because she displayed an abnormal EKG and electrolyte imbalance due to worsening bulimia nervosa. Outpatient therapy had not effectively remedied her eating disorder. Her parents and doctors believed it was not safe for her to stay at home. The hospital facility charges for the 22 days of inpatient treatment totaled $35,416.57.

BCBSM denied Petitioner coverage for the facility charges, because it determined her treatment did not require an inpatient level of care. Petitioner disagreed with the denial and initiated BCBSM’s internal grievance process. At the final step of that process, BCBSM obtained the opinion of an independent medical review board that stated Petitioner did require inpatient services, but only for the first six days of her treatment. BCBSM accepted the board’s finding and granted Petitioner coverage for those first six days. It paid $10,137.74 for facility charges and promised to pay the outstanding professional charges for that period. It however issued a final adverse determination in Petitioner’s case on October 18, 2002, denying her coverage for the remaining $25,278.83 in facility charges (last 16 days of her inpatient treatment).

III
ISSUE

Did BCBSM properly deny Petitioner coverage for inpatient eating disorder treatment from XXXXXXXXXXXXXXXXXXX?

IV
ANALYSIS

PETITIONER’S ARGUMENT

Petitioner believes BCBSM should cover all costs from her inpatient eating disorder treatment because her hospitalization was medically necessary. Since her discharge from the hospital, she has made steady progress in maintaining a healthy weight and keeping her symptoms under control.

Petitioner claims this progress could not have happened without her hospital stay. She required levels of supervision and therapy that were only available in an inpatient setting. Petitioner therefore argues the Commissioner should reverse BCBSM’s denial of coverage for the final 16 days of her inpatient treatment.

BCBSM’S ARGUMENT

In its October 18, 2002, final adverse determination letter to Petitioner, BCBSM stated:

[An independent medical consultant] denied payment for [Petitioner’s] admission of XXXXXXXXXXXXXXXXX. When the documentation was subsequently forwarded to…an independent medical review board consisting of physician consultants, the first six days were approved. However, the decision regarding the remainder of the admission was upheld because our inpatient criteria was [sic] not met.

As indicated [in] the…Community Blue Group Benefits Certificate…and…the Comprehensive Major Medical Certificate…for a hospital admission to be payable, it must be medically necessary and meet the following criteria:

• The covered service is for the treatment, diagnosis or symptoms of an injury, condition or disease.
  
• The service, treatment, or supply is appropriate for the symptoms and is consistent with the diagnosis. By appropriate, we mean that the type, level, and length of care, treatment or supply and setting are needed to provide safe and adequate care and treatment.
  
• For inpatient hospital stays, acute care as an inpatient must be necessitated by the patient’s condition because safe and adequate care cannot be received as an outpatient or in a less intensified medical setting.

…[R]egarding [Petitioner’s] admission, [an independent medical review board] determined that, after the first six days, [she] could have been released to a less intensive setting such as a partial hospital program. The medical records reflected that she was admitted primarily because of an abnormal EKG and electrolyte imbalance. Once she was stabilized, her condition was not considered life-threatening.

BCBSM therefore argues the Commissioner should uphold its denial of coverage for the final 16 days of Petitioner’s inpatient eating disorder treatment.

IRO’S RECOMMENDATION

The medical expert who reviewed this case is board certified in psychiatry and is in active practice. The IRO recommended that (1) the Commissioner reverse BCBSM’s final adverse determination in Petitioner’s case as it applies to her inpatient treatment from XXXXXXXXXXXXXXXXXXXX, and (2) the Commissioner uphold BCBSM’s final adverse determination in her case as it applies to her inpatient treatment from XXXXXXXXXXXXXXXX. The IRO based these recommendations on the following findings of its medical expert:

• Petitioner’s physical condition rapidly stabilized after her hospital admission, but her baseline anxiety about her weight actually increased at first.
• Petitioner continued to have strong urges to purge and to restrict her caloric intake until XXXXXXXXXXX.
• Petitioner required monitoring 24 hours a day, could not safely stay at home, and could not safely obtain treatment through partial hospitalization or intensive outpatient therapy, until XXXXXXXXX.
• By XXXXXXXXXXXXXX, patient was eating outside the hospital and had earned the privilege of self-monitoring.
• Post-prandial monitoring was discontinued on XXXXXXXXXX.
• Petitioner could have moved to a lower level of care as of XXXXXXXXXX.
• It was medically necessary for Petitioner to receive treatment at an inpatient level of care from XXXXXXXXXXXXXXXXXX.
• It was not medically necessary for Petitioner to receive treatment at an inpatient level of care from XXXXXXXXXXXXXXXXXXXX.

COMMISSIONER’S REVIEW

The Commissioner carefully reviewed the arguments and documents the parties submitted, as well as the findings of the IRO medical expert. The focus of this analysis is whether BCBSM properly denied Petitioner benefits for inpatient eating disorder treatment she received from XXXXXXXXXXXXXXXXXXXXXXX. The Community Blue Group Benefit Certificate and the Comprehensive Health Care Copayment Certificate-Series CMM 100 both dictate the conditions of her coverage. The Community Blue Group Benefit Certificate provides her primary health coverage, while the Comprehensive Health Care Copayment Certificate-Series CMM 100 provides her secondary coverage.

BCBSM’s denial of coverage for hospital services in this case was based on its judgment that inpatient treatment was not medically necessary. BCBSM reached this conclusion based on the finding of a review board that Petitioner could have obtained treatment in an outpatient setting after XXXXXXXXXXXXX. The Rider HMN-Hospital Medical Necessity (Rider HMN) amends both of Petitioner’s coverage certificates and establishes BCBSM’s criteria for the medical necessity of hospital services. The Rider HMN, in pertinent part, states:

SECTION 1: Definitions

Medical Necessity
A determination which allows for payment of covered hospital services when all of the following conditions are met:

• The service is for the diagnosis or treatment of an injury, condition or disease.
• The service or treatment is appropriate for the injury, condition or disease.
• The service is not mainly for the convenience of the member or health care provider.
• The treatment is not generally regarded as experimental or investigational by BCBSM.
• The service is considered to be the generally accepted standard or practice by the BCBSM Medical Director and his/her agents.

SECTION 2: What We Pay

Subject to the remaining terms as conditions of your certificate, we will pay our approved amount for covered hospital services that are medically necessary.

SECTION 3: Limitations and Exclusions

• We will not pay for inpatient hospital services that can be provided safely in an outpatient or office location.

This language clearly outlines what qualifies as medically necessary hospital services for purposes of BCBSM coverage. According to the IRO medical expert who reviewed this case, Petitioner met those qualifications from XXXXXXXXXXXXXXXXXXXXXX. The medical expert found that inpatient treatment was medically necessary and appropriate for Petitioner’s condition through XXXXXXXXXXXXXX. The Commissioner accepts the findings of the IRO medical expert and therefore finds that the inpatient level of care Petitioner received as part of her treatment for an eating disorder was medically necessary from XXXXXXXXXXXXXXXX XXXX, but not medically necessary from XXXXXXXXXXXXXXXXXXXX Thus, BCBSM’s final adverse determination in Petitioner’s case improperly denied her coverage for the hospital services she received from XXXXXXXXXXXXXXXXXXXX.

V
ORDER

The Commissioner reverses BCBSM’s October 18, 2002, final adverse determination as it relates to BCBSM’s denial of coverage from XXXXXXXXXXXXXXXXXXX. BCBSM must pay for covered hospital and physician services incurred from XXXXXXXXXXXXXXXXX.
The Commissioner however upholds the BCBSM final adverse determination as it relates to services Petitioner received from XXXXXXXXXXXXXXXXXXXXXXXX. BCBSM is not responsible for paying the hospital and physician services incurred from XXXXXXXXXXXXXXX.

BCBSM must pay according to this Order within 60 days from the date of this Order and shall provide the Commissioner with proof of payment no later than seven days thereafter.

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.