Issued and entered June 17, 2003 by Linda A. Watters, Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On May 9, 2003, XXXXXXXXXXX (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.

The issue in this matter is contractual. There is no medical issue. Therefore, review by an independent review organization (IRO) is not required. The Commissioner reviews contractual issues under MCL 500.1911(7).

II
FACTUAL BACKGROUND

Petitioner is a Physicians Health Plan of Mid-Michigan (PHPMM) member. He has a history of coronary artery disease including myocardial infarction, quadruple coronary artery by-pass, congestive heart disease, irregular heartbeat, and ventricular arrhythmia.

In XXXXXXXXXXXX, Petitioner was admitted for recurrent and repeat ventricular tachycardia. He has recurrent episodes of congestive heart failure. Dr. XXXXXX, his cardio-thoracic surgeon, had no convincing evidence Petitioner’s myocardium was viable or if there was evidence of reversible ischemia. The surgeon recommended a positron-emission tomography (PET) scan be performed as soon as possible. The test was crucial for making a management decision. The surgeon advised Petitioner the test could be performed at the XXXXXXXXXXXXXXXXXX (XXXXXX) or XXXXXXXXXXXXX (XXXXXXXX). The Petitioner elected to have the test performed at XXXXXXXX, an out-of-network hospital. XXXXXXX is in- network.

Petitioner believes the services should be covered because 1) time was critical, and 2) the test was crucial to his physician’s management decisions. Petitioner filed a grievance with PHPMM and exhausted PHPMM’s internal grievance process. PHPMM issued its final adverse determination on March 13, 2003.

III
ISSUES

Did Physicians Health Plan of Mid-Michigan appropriately deny retro-authorization and coverage for medical services provided out-of-network?

IV
ANALYSIS

Petitioner’s Argument

Petitioner went to XXXXXXXX hospital for several reasons that include:

Urgency-The test was needed so the surgeon could determine treatment options and of the two locations where the test is performed the tests, XXXXXXXX was the one who could complete it at the earliest date.

Convenience-Due to his rapidly declining health it was less difficult to gain access in and out of XXXXXXXX versus XXXXXX.

Notification-He was not aware that XXXXXXXX was an out-of-network hospital prior to receiving the tests.

Offer to settle-Petitioner offered to share the cost with PHPMM; however, PHPMM refused this offer.

Petitioner claims his surgeon, a participating physician with PHPMM advised him he could have the PET scan performed at either XXXXXXXor XXXXXXXX. Petitioner thought he had a choice between the facilities. Petitioner claims PHPMM should allow retro-authorization and coverage for the services because he was not advised prior to the services being rendered that the test would not be covered if it were performed at XXXXXXXX. If the Petitioner had known the test would not be covered, he would have put his concerns aside and gone to XXXX X for the test.

Although Petitioner claims PHPMM should cover the entire cost of the test, in the alternative, he would like PHPMM to allow some kind of settlement and cover part of the cost of the test performed at XXXXXXXX.

PHPMM Argument

In its March 13, 2003, final adverse determination letter, PHPMM states it denied coverage for services rendered by the non-contracted provider because these services are available within the PHPMM network of contracted providers. PHPMM cites its Certificate of Coverage (Certificate), which provides in part:

Section 9.1 Health Services by Non-Plan Providers

You are eligible for Coverage for Health services described in Section 10 of this Certificate if such Health Services are Medically Necessary and are provided by or under the direction of your Primary Physician. All Coverage is subject to the terms, conditions, exclusions, and limitations of the Policy.

Health Services, which are not provided by or under the direction of your Primary Physician, are not Covered, except in Emergency situations or referral situations authorized in advance by the PLAN. Health Services provided at an Urgent Care Center outside the Service Area by a non-Network provider are Covered.

Enrolling for Coverage under the Policy does not guarantee Health Services by a particular Network provider on the list of providers. This list of Network Providers is subject to change. When a provider is on the list no longer has a contract with the PLAN, you must choose among remaining Network providers.

Section 9.5 Referral Health Services

All Heath Services must be provided by or coordinated through your Primary Physician except for Emergency Health Service and Health Services provided at an Urgent Care Center outside the Service Area. If your Primary Physician is not able to provide a Medically Necessary Health Service, he or she will refer you to a Network specialist or other Network provider.

* * *

In the event that specific Health Services cannot be provided by or through a Network provider, you are eligible for Coverage of such Health Services obtained through non-Network providers. Health Services must be authorized in advance through a referral as designated by the PLAN. Health Services are subject to the provisions of Section 10 and other limitations and exclusions of the Policy…

Since there was an in-network provider available to provide the services, Petitioner had to utilize the in-network provider for the service to be covered. Out-of-network services are covered if they are approved by the plan. PHPMM was not contacted to obtain plan approval prior to the services being rendered. On XXXXXXXXXXXXXXXX, approximately 6 weeks after the services were rendered, the referring provider submitted an out-of-network referral request. PHPMM did not grant approval for the services; therefore, the services are non-covered.

PHPMM feels Petitioner’s arguments with respect to stated issues are unpersuasive and responds as follows:

Scheduling-PHPMM feels that both Petitioner and his physician failed to demonstrate XXXXXX had been contacted to determine availability. PHPMM was not asked to check on availability.

Convenience-XXXXXXXis actually closer to Petitioner than XXXXXXXX hospital. Both provide valet parking services from their front door.

Notification-PHPMM believes it is Petitioner’s responsibility to verify the participating status of a provider. This can be accomplished by accessing the provider directory, the website or 24-hour telephone line. Further, if anyone had called PHPMM prior to services being rendered they would have been advised the provider was not participating.

Offer to Settle-Petitioner does not have out-of-network benefits, so PHPMM is under no contractual obligation to provide services.

PHPMM does not question the medical necessity for the PET scan. PHPMM contends the medical services in this case were denied for two reasons. First, the services could be provided in-network. Second, prior authorization for out-of-network services was not obtained prior to the services being rendered. It is the Petitioner’s responsibility to contact PHPMM prior to services being rendered to verify the participating status of a provider before proceeding with treatment. PHP believes it was Petitioner’s personal preference to seek treatment from the non-network provider therefore PHP should not have to cover this service.

Commissioner’s Review

The Commissioner carefully reviewed the arguments and documents presented by the parties in this case. The focus of this analysis is whether PHPMM properly denied Petitioner retro-authorization and coverage for medical services obtained from an out-of-network provider. PHPMM is a Health Maintenance Organization (HMO). HMOs contain costs by using a network of providers. It is reasonable for a HMO to require its members to utilize an in-network provider before they utilize an out-of-network provider.

On XXXXXXXXXX and XXXXXXXXXXXXXXXXX, Petitioner received services from an out-of-network provider. This was prior to PHPMM receiving a request for out-of-network services and before PHPMM had an opportunity to determine whether the services would be covered. On XXXXXXXXXXXXXXXX, after services had been rendered, Petitioner’s surgeon sought a referral for the out-of-network services. PHPMM did not authorize Petitioner to obtain out-of-network services. The Commissioner notes that according to PHPMM’s Certificate of Coverage, there are specific procedures to be followed when a referral is needed for out-of-network services. If authorization for the services is not obtained prior to services being rendered, the services are excluded under the contract.

The Commissioner finds the PHPMM Certificate does not cover the services provided to Petitioner at XXXXXXXX hospital. There are several reasons for this conclusion. First, it was not necessary for Petitioner to receive services from an out-of-network provider. An in-network provider was available to perform the PET scans. Second, services, which require a direct referral, will not be covered unless the Physician has obtained an appropriate referral. There was no documentation that Petitioner’s surgeon attempted to obtain authorization for a referral for out-of-network services until XXXXXXXXXXXXXXXX. This was subsequent to the services being provided by the out-of-network provider. Therefore, the Commissioner finds, PHPMM’s determination in this matter is valid.

V
ORDER

The Commissioner upholds PHPMM’s March 13, 2003, final adverse determination in Petitioner’s case. PHPMM properly denied Petitioner retro-authorization and coverage for out-of-network services provided by XXXXXXXX hospital.

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.