Issued and entered November 22, 2002 by Frank M. Fitzgerald, Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On October 29, 2002, Petitioner, XXXXXXXX filed a request for external review with the Commissioner of Financial and Insurance Services under the Patient’s Right to Independent Review Act, MCL 550.1901 et seq. The Commissioner’s staff assessed the material submitted by the Petitioner and accepted the request.

The issue involved is contractual in nature and not a medical issue. Therefore, review by an Independent Review Organization is not required. The Commissioner reviews contractual issues under MCL 550.1911(7).

II
FACTUAL BACKGROUND

On XXXXXXXXX, Petitioner sought emergency treatment at a XXXX, Michigan hospital for an exacerbated asthma condition. The emergency room physicians determined she should be admitted to an affiliated hospital facility in XXXXXXXX, Michigan. She was transferred to the XXXXXX facility by ambulance. The ambulance service billed Humana Insurance Company (Humana) $280.00. It paid $197.00. Petitioner seeks full reimbursement for the ambulance charge.

III
ISSUE

Whether Humana paid the proper amount for ambulance services?

IV
ANALYSIS

Petitioner’s Argument

Petitioner argues Humana should pay the full amount billed by the ambulance company. She believes the full amount should be paid because at the time of the transfer she was in an unstable medical condition and could not drive herself to the hospital where she was to be admitted. She submitted medical records to support her unstable medical condition. She seeks additional reimbursement of $83.00 for the ambulance charges.

Humana Insurance Company’s Argument

Humana believes it properly reimbursed Petitioner under the insurance policy. Petitioner’s schedule of benefits provides:

BENEFITS ARE PAYABLE ONLY IF SERVICES ARE CONSIDERED TO BE A COVERED EXPENSE AND ARE MEDICALLY NECESSARY. ALL COVERED SERVICES ARE PAYABLE ON A MAXIMUM ALLOWABLE FEE BASIS AND ARE SUBJECT TO SPECIFIC CONDITIONS, DURATIONAL LIMITATIONS AND ALL APPLICABLE MAXIMUMS OF THE POLICY. [emphasis Added]

AMBULANCE

PREFERRED PROVIDER BENEFITS: 100% to Out-of-Pocket Limit after Deductible

NON-PREFERRED PROVIDER BENEFITS: 100% TO Out-of-Pocket Limit after Deductible

The Limitations and Exclusions section states:

This policy does NOT provided benefits for:

4. Charges in excess of the Maximum Allowable Fee for the Service.

Under the policy “Maximum Allowable Fee” is defined as:

Maximum Allowable Fee for a Covered Expense is the lesser of:

1. The fee most often charged in the geographical area where the Service was performed;
2. The fee most often charged by the provider;
3. The fee which is recognized as reasonable by a prudent person;
4. The fee determined by comparing charges for similar Services to a national data base adjusted to the geographical area where the Services or procedures were performed; or
5. The fee determined by using a national RELATIVE VALUE SCALE. RELATIVE VALUE SCALE means a methodology that values medical procedures and Services relative to each other that includes, but is not limited to, a scale in terms of difficulty, work, risk, as well as the material and outside costs of providing the Service, as adjusted to the geographic area where the Services or procedures were performed; or
6. The fee that has been negotiated for Services provided by a Qualified Practitioner, Qualified Treatment Facility, Hospital or other provider. Benefits for Services provided by a Non-Preferred Providers are paid based on a fee negotiated with the Preferred Providers.

Humana argues its consulting firm uses a “relative value system” to analyze claim and fee information for a given geographical area. The relative value system is based on the fees charged by most providers in the same locality performing the same procedure. This analysis is performed on an ongoing basis due to constant changes in medical coding and descriptions. Humana believes it has provided coverage for the ambulance services according to the contract language.

Commissioner’s Review

There is no dispute the ambulance service was medically necessary and constitutes, at some level, a covered expense. The Certificate of Insurance contains a “maximum allowable fee” provision applicable to ambulance services. The Certificate does not have an exception to this limitation when the insured is in an unstable medical condition. The amount paid by Humana is the maximum payment available under any circumstance in which ambulance services are rendered.

The Commissioner finds the Humana Certificate of Insurance clearly states the service fee is subject to a relative value scale calculation. The Petitioner has notice of this calculation method and the Commissioner further finds the calculation method is valid.

V
ORDER

The final adverse determination of Humana Insurance Company is upheld. Humana is not liable for any portion of the balance of the XXXXXXXXXXXX charge.

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.