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

ORDER

I
PROCEDURAL BACKGROUND

On March 7, 2003, XXXXXXXXXXXXXX on behalf of his XXXX, XXXXXXXXXXXX (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 550.1901 et seq. After a review of the material submitted, the Commissioner accepted the request on March 14, 2003.

The review requires the resolution of a contractual question; no medical questions are presented. 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 25, 2003.

II
FACTUAL BACKGROUND

Petitioner has coverage under the Comprehensive Health Care Co-payment Certificate Series CMM 500 and related rider, “Reimbursement Arrangement for Professional Services” (“RAPS”). Petitioner seeks coverage for that portion of her medical care which BCBSM did not cover.

The Petitioner suffered a stroke, her third, on XXXXXXXXXX. She was taken to XXXXX XXXXXX. On the morning of XXXXXXXXX, she was transported by air ambulance to XXXXX XXXXXXXXX in XXXXXX where she had brain surgery the same day. On XXXXXXXXXXXXXX, the Petitioner had an operation to install a stomach feeding tube, as she could not swallow her food. XXXXXXXXXXXXXX, a non-participating provider performed this surgery. Dr. XXXXX charged $234.00 for procedure code 99254. BCBSM approved and paid $177.47 to the Petitioner. He also charged $1,137.00 for procedure code 43246. BCBSM approved and paid $409.82 for this procedure. Finally, he charged $104.00 for procedure code 99232. BCBSM approved and paid $69.64 for this care. These payments left a balance of $818.07 that the Petitioner is required to pay.

Petitioner believes that BCBSM is required to pay substantially more for her surgery. 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 BCBSM required to pay an additional amount for Petitioner’s XXXXXXXXXXsurgery and related care?

IV
ANALYSIS

Petitioner’s Argument

Petitioner’s XXXXXXXXXXX surgery was essential for her survival and was a continuation of her XXXXXXXXXXX emergency brain surgery. The feeding tube was in place for several months.

The Petitioner believes that BCBSM is required to pay the full amount charged for the XXXXXXXX surgery minus any applicable co-payments. This is based on the fact she was taken to a participating hospital, she had a life threatening condition that required medical care, she was not offered alternative medical providers and she did not sign a BCBSM date-specific, procedure-specific, prior agreement form.

The Petitioner also argues, although the publication was not available to her family at the time, BCBSM’s “Participating Provider Directory” for 2001-2002 lists XXXXXXXXXXXXXXXX as a participating provider of gastroenterology; no alternative participating providers for this specialty are listed for XXXXXXXXXXXXXXXX.

BCBSM’s Argument

Under Petitioner’s 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 but may bill the patient for the remaining balance.
BCBSM determines the payment level for each service by applying a formula known as the Resource Based Relative Value Scale (“RBRVS”) which 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 $656.93 it paid for the XXXXXXXXXXXXXX, surgery and related care by the surgeon is equal to the maximum amount payable under its system of payment for the procedures performed. This includes the full maximum amount for procedure codes 99254, 43246 and 99232. This conforms to BCBSM’s payment provisions in the Certificate.

BCBSM claims that participating physicians were available to place the feeding tube. BCBSM found thirteen participating providers whose specialty is gastroenterology in XXXXXXXXX County. BCBSM also indicates that the Petitioner was incorrect that the participating directory listed Borgess Hospital as the only participating provider of gastroenterology. Therefore, BCBSM claims that Petitioner was not limited to the non-participating physician she used.

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

Commissioner’s Review

The Certificate of Coverage controls the analysis in this matter. It 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 gastroenterologists were available to the Petitioner. The Certificate is clear in its discussion of non-participating providers.

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.

The Commissioner finds the $656.93 paid by BCBSM for the XXXXXXXXXXXXXX, surgery and related care is equal to or greater than the maximum allowable under its system of payments.

V
ORDER

BCBSM’s January 31, 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.