Issued and entered June 11, 2003 by Linda A. Watters, Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On May 16, 2003, XXXXXXXXXXX, on behalf of his wife, XXXXXXXXXX, (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 May 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 May 15, 2003.

II
FACTUAL BACKGROUND

On XXXXXXXXXXXXXXXXXX, the Petitioner underwent bilateral breast reconstruction surgery. A non-participating plastic/reconstructive surgeon performed the reconstruction surgery.

The billing and payment history shows:

Petitioner believes BCBSM is required to pay substantially more for her surgery. According to BCBSM, the doctor does not participate with BCBSM. He is not contractually required to accept BCBSM’s approved amount as payment in full. He is therefore free to bill the Petitioner for the balance.

III
ISSUE

Is Blue Cross and Blue Shield of Michigan (BCBSM) required to pay an additional amount for Petitioner’s XXXXXXXXXXXXXXXXXX, surgery?

IV
ANALYSIS

Petitioner’s Argument

The Petitioner was diagnosed with breast cancer at age twenty-eight. She had mastectomy surgery and chemotherapy the first part of XXXX. Later, she decided to have the breast reconstruction surgery. The plastic surgeon and his office staff were very helpful and assured the Petitioner that they have been successful in the BCBSM appeals process.

After the reconstruction surgery, the surgeon billed the Petitioner for over $17,000. BCBSM paid around $3,100 for this surgery. The doctor agreed to write off over half of his bill. This leaves the Petitioner with a $4,864.78 balance to pay.

The Petitioner disagrees with the amount BCBSM paid for the surgery. She believes that BCBSM is required to pay the $4,864.78 she has to pay the doctor. She does not understand how BCBSM can approve an amount that is so much less than the amount charged.

BCBSM’s Argument

Petitioner has health coverage under BCBSM’s Community Blue Group Benefit Certificate (Certificate) as amended by The Reimbursement Arrangement for Professional Service Rider (RAPS) and Community Blue Copayment Requirement (Rider CBC 10%-P), which requires a 10% co-payment for most services. 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 a 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, does not have to accept the BCBSM amount as full payment. The doctor may 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 $3,138.81 paid for the XXXXXXXXXXXXXXXXXX, surgeon’s services is equal to the maximum amount that is payable under its system of payments for the surgery provided and the applicable co-payment provision. This includes the maximum amount for procedure code 19361 and one-half the maximum amount for procedure code 19357. This is consistent with the payment provisions for multiple procedures, which pays the maximum for the primary procedure and one-half the maximum amount for the secondary procedure. A 10 % co-payment was subtracted from the payment amount consistent with the provisions of Rider CBC 10%-P.

BCBSM claims that participating plastic/reconstructive surgeons were available to perform the Petitioner’s surgery. BCBSM found nine participating plastic/reconstructive surgeons in the area the Petitioner lives. The Petitioner was not forced to use a non-participating physician. The Petitioner has the right to choose whomever she believes to be the best plastic surgeon, regardless of whether that surgeon participates with BCBSM. However, that choice can increase out-of-pocket expenses. BCBSM claims that under the Certificate it has paid the proper amount for the Petitioner’s surgery and is not required to pay an additional amount.

Commissioner’s Review

The Certificate of Coverage controls the analysis in this matter. A non-participating provider is defined 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, non-participating 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 non-participating doctors do not have to accept BCBSM’s approved amount as payment in full.

Moreover, Section 2 of the RAPS Rider states a member 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 rider puts subscribers on notice that if they obtain services from non-participating providers, they may incur personal financial liability for charges that exceed BCBSM’s maximum payment level. According to the rider, BCBSM pays either the charge for a covered service or BCBSM’s maximum payment level for the covered service, depending on which is less. To limit personal liability a subscriber must go to a participating provider.

The Commissioner finds the Certificate is clear in its discussion regarding non-participating providers. The Certificate is available for the member to read. If a Certificate is not available, the member may contact BCBSM for coverage details and to get information on participating providers. It is the member’s responsibility to determine whether a physician participates with BCBSM. In the case at hand, the Petitioner chose a non-participating surgeon to perform the surgery. This was her decision. She is responsible for paying the balance of the charges. The Commissioner finds the $3,138.81 paid by BCBSM for the XXXXXXXXXXXXXXXXXX, surgery is equal to the maximum allowable under its system of payments for this care and the co-payment provisions of her Certificate and riders.

V
ORDER

The Commissioner upholds BCBSM’s April 4, 2003, final adverse determination. BCBSM is not required to pay an additional amount for Petitioner’s XXXXXXXXXXXXXXXXXX, surgery.

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.