Issued and entered June 4, 2003 by Linda A. Watters, Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On December 13, 2002, XXXXXXXXXXXXXXXXXX, the father of XXXX XXXXXXXXXX (Petitioner), filed a request for external review on behalf of the petitioner 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 December 20, 2002.

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 this filing and requested the information it used in making its adverse determination. The Office of Financial and Insurance Services received the BCBSM information on January 6, 2003.

II
FACTUAL BACKGROUND

Petitioner was diagnosed with type 2 King adolescent scoliosis in XXXX. Surgery was performed to correct the condition on XXXXXXXXXXXXX. The condition worsened. A second surgery was performed on XXXXXXXXXXXXXXX, at XXXXXXX XXXXXXXXXXXXXXXXXX when Petitioner was XXXXXXXX old. The hospital and the orthopedic surgeon participated with BCBSM. XXXXXXXXXXXXXXXXXXXXXXXX (XXXXXXXXX), performed anesthesia services for this second surgery. XXXXXXXXX, however, was a non-participating provider. XXXXXXXXXXX anesthesia charge was $4,123.24. BCBSM approved and paid its maximum payment amount of $1,032.20 for this care, which leaves the Petitioner with a balance of $3,091.04.

III
ISSUE

Has Blue Cross and Blue Shield of Michigan (BCBSM) paid the correct amount for anesthesia services?

IV
ANALYSIS

Petitioner’s Argument

According to the petitioner’s father, the petitioner’s first surgery was performed while the petitioner was insured by Blue Care Network (BCN). BCN covered the surgery and anesthesia charges. In XXXXXXXXX petitioner’s insurance was changed to Blue Cross Blue Shield PPO (BCBSM). Prior to the second surgery, a new primary care physician was selected, and the orthopedic surgeon was determined to be a BCBS participant. Petitioner believes BCBSM should pay the full amount for the anesthesia services. All of the paperwork and procedures were followed. The surgery was performed at the same hospital, by the same physicians who performed the first surgery. XXXXXXXXXX is the only provider in the area. The Petitioner’s father did not sign a prior agreement with XXXXXXXXX.

BCBSM’s Argument

Petitioner has coverage under the BCBSM’s Community Blue Group Benefits Certificate. 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 obtains services from 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 can bill the patient for the balance.

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 $1,032.20 paid for the XXXXXXXXXXXXXXX, anesthesia care is equal to the maximum amount payable under its system of payment for the procedure performed.

BCBSM claims that participating anesthesiology providers were available to provide the Petitioner’s care. BCBSM’s “physician search” found three qualified participating anesthesiologists available to the petitioner within 12 miles of his home. The surgery was not performed on an emergency basis.

Commissioner’s Review

The Certificate of Coverage controls the analysis in 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.

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, BCBSM provided evidence that participating anesthesiologists were located within a reasonable distance from Petitioner’s home.

The Commissioner finds the Certificate is clear in its discussion of non-participating providers. It is the Petitioner’s responsibility to determine whether a provider participates with BCBSM. In this case the Petitioner’s father determined the orthopedic surgeon was a participating specialist. The same determination should have been made with respect to the anesthesiologist.

This analysis focuses on the BCBSM Certificate. One could say the contractual review is too strict and fails to account for the realities facing patients anticipating surgery. However, BCBSM only pays medical expenses. It seeks to contract with various medical professionals to uphold its contractual duties. It does not control the doctors and the procedures they perform. BCBSM has practically no role in determining if a particular physician provides services to the subscriber. Its contract places the burden of choice on the subscriber.

In the case at hand, the anesthesiologist is a non-participating provider with BCBSM. He or she is not bound to accept the BCBSM approved amount and is free to charge a reasonable and competitive amount.

The Commissioner empathizes with the Petitioner, but it is clear that the Petitioner is responsible for the balance of the anesthesiologist charges. The Commissioner finds the $1,032.20 paid by BCBSM for the XXXXXXXXXXXXXXX, anesthesiology services is consistent with its system of payments.

V
ORDER

The Commissioner upholds the BCBSM final adverse determination. BCBSM is not required to pay an additional amount for Petitioner’s XXXXXXXXXXXXXXX, anesthesiology services.

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.