Issued and entered June 3, 2003 by Linda A. Watters, Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On April 3, 2003, XXXXXXXXXXXX, on behalf of his wife, XXXXXXXXXXXX, (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 (PRIRA), MCL 550.1901 et seq. After an assessment of the material submitted, the Commissioner accepted the request.

Petitioner’s case focuses on her Certificate of Coverage (Certificate) with Blue Cross Blue Shield of Michigan (BCBSM). There is no medical issue. Therefore, review by an Independent Review Organization (IRO) is not required. The Commissioner reviews contractual issues under MCL 550.1911(7). On April 21, 2003, the Office of Financial and Insurance Services (OFIS) received from BCBSM the information it used to make its adverse determination in Petitioner’s case.

II
FACTUAL BACKGROUND

Petitioner is a BCBSM member. She seeks coverage for doctor visits she received while she was being cared for in a nursing home. BCBSM denied payment for these visits because it believes the services are excluded in her Certificate.

The Petitioner believes that doctor visits are a covered benefit under her Certificate and BCBSM is required to pay for her care. The amount in dispute is $582.00.

III
ISSUE

Did BCBSM properly deny coverage for physician visits provided while Petitioner was admitted to a nursing home?

IV
ANALYSIS

Petitioner’s Argument

Petitioner underwent brain surgery at XXXXXXXXXXXXXXXX on XXXXXXXXXX. She was transported to XXXXXXXXXXXXXXXXXXXXX on XXXXXXX, and then to XXXXXXXXXXXXXXXXX on XXXXXXXXXXXX. At XXXXXXXXXXXXXXXXX, she was placed under the care of Dr. XXXXX XXXXXXXXX, of the XXXXXXXXXXXXXX, in accordance with the requirements of the nursing home. Dr. XXXXXXXXX became the Petitioner’s primary physician and provided services on nine occasions.

In the letter of denial for these services, BCBSM indicated, “…convalescent care and skilled nursing facility services” are not covered. The Petitioner argues that the care she received from Dr. XXXXXXXXX were medical services for the treatment of such things as intracranial hemorrhage, convulsions, osteoporosis, depressive disorder, reflux esophagitis, benign hypertension, anemia, epistaxis, and gastroduodenal disease. If the Petitioner had been treated in a doctor’s office, BCBSM would have covered the cost. The Petitioner believes it is preposterous that BCBSM will not cover these costs because she was in a nursing home.

BCBSM’s Argument

The Petitioner has health coverage under the BCBSM Comprehensive Health Care Co-payment Certificate Series CMM 500. Page 4.14 of the Certificate states:

Physician and Other Professional Provider Services That are Not Payable…

• Rest therapy or services provided to you while you are in a skilled nursing facility, convalescent home, long-term illness care facility, nursing home, rest home or similar non-hospital institution.

Under this provision, physician services provided to a patient while in a nursing home are not a covered benefit.

The procedure codes that were billed are 99302, 99311, and 99312. These codes are described as “nursing facility care visits” in the American Medical Association’s Current Physicians’ Terminology. The Petitioner’s husband acknowledges the care was provided while his wife was in the XXXXXXXXXXXXXXXXX. Thus, the physician services in question are not a covered benefit under the Certificate.

Commissioner’s Review

The Commissioner carefully reviewed the documents submitted and the arguments of the parties. The focus of this analysis is whether BCBSM properly denied coverage for nine physician visits while Petitioner was admitted to a nursing home. The Certificate controls Petitioner’s coverage and on page 4.14 it states in pertinent part:

Physician and Other Professional Provider Services That are Not Payable

• Rest therapy or services provided to you while you are in a skilled nursing facility, convalescent home, long-term illness care facility, nursing home, rest home or similar non-hospital institution.

It appears BCBSM interprets this coverage limitation very broadly. Obviously it intends to exclude coverage for “rest therapy” at a nursing home. BCBSM also argues the term “or services” operates to exclude any other service (including physician visits) when a patient is a resident in a nursing home. This coverage interpretation however goes beyond the scope of the Certificate language.

The Certificate excludes, “rest therapy or services provided to you while you are in a… nursing home….” The term “or services” modifies “rest therapy.” As a result, the exclusion applies to services that are related to rest therapy. The language of the exclusion is narrower in scope than what BCBSM argues.

Clearly, the Commissioner interprets the exclusion differently than BCBSM. This distinction gives rise to an ambiguity contained in the BCBSM exclusion. Under Michigan law, when a term or phrase in an insurance contract is ambiguous, the term is generally construed against the insurer (drafter of the contract). In fact, in Twichel v. MIC General Ins. Co., 251 Mich App 476; 650 NW2d 428 (2002), the Michigan Court of Appeals stated the following maxims:

An insurance contract must be enforced in accordance with its terms. [citations omitted] The terms of an insurance policy are given their commonly used meanings, in context, unless clearly defined in the policy. [citations omitted] Ambiguities are to be strictly construed against the insurer, who is the drafter of the contract. [citations omitted] Further, exclusionary clauses are to be strictly construed against the insurer. Auto-Owners Ins. Co. v. Churchman, 440 Mich 560, 567; 489 NW 2d 431 (1992). [emphasis added]

These principles of contract law apply in the case at hand because the BCBSM exclusionary clause is ambiguous. The exclusionary clause shall be construed against BCBSM, therefore effectuating coverage in favor of the Petitioner. The BCBSM argument is rejected and its final adverse determination is overruled.

V
ORDER

The Commissioner reverses the BCBSM final adverse determination in this matter. BCBSM shall cover for the nine physician visits provided the Petitioner while she was in a nursing home.

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.