Issued and entered December 19, 2002 by Frank M. Fitzgerald, Commissioner

ORDER

I
PROCEDURE

On July 17, 2002, XXXXXXXXXXXX (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 550.1901et seq. After a review of the materials submitted, the Commissioner accepted the request.

The issue involved is contractual in nature. The Commissioner reviews contractual issues under MCL 550.1911(7). On July 31, 2002, the Office of Financial and Insurance Services (OFIS) received materials submitted by Blue Care Network of Michigan (BCNM).

II
FACTS

Petitioner is covered under the BCNM’s BCN 5 Certificate of Coverage. On October 7, 1999, Petitioner injured his neck and back when he crashed his car into the back of his garage. The XXXXXXXXXXXXXXXXXXXXXXXXX, Petitioner’s automobile insurer, agreed to pay for the damage to his home and car and to pay for his medical expenses not covered by BCNM. BCNM agrees it is Petitioner’s primary health benefit provider in this matter. From October 29, 1999, to January 9, 2001, Petitioner received out-of-network chiropractic services from XXXXXX XXXXXXXXXXXXXX, for the treatment of his neck and back problems.

On February 2, 2000, Petitioner requested a referral to a chiropractor from his primary care physician, Dr. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX. In response to his request, Dr. XXXXX gave Petitioner a signed note on a XXXXXXXXXXXXXXXXXXXX prescription slip stating that BCNM does not cover chiropractic care. On May 12, 2000, Petitioner again requested Dr. XXXXX to refer him to a chiropractor. At this time, Dr. XXXXX gave Petitioner another note on a prescription slip. This note stated that BCNM had denied coverage for chiropractic care for Petitioner, that chiropractic treatment had been beneficial to Petitioner, and that XXX should cover Petitioner’s chiropractic costs.

Contrary to Dr. XXXXXXX first note, BCNM does cover chiropractic services. However, this coverage is not published in the BCN 5 Certificate of Coverage. According to BCNM policy statements, BCNM covers chiropractic care when it is deemed medically necessary by the primary care physician and is provided by either the primary care physician or by an in-network provider referred by the primary care physician.
Dr. XXXXXXX medical records from Petitioner’s May 12, 2000, office visit indicate that Dr. XXXXX did not refer Petitioner to a chiropractor because he “want[ed] him to go to [physical medicine and rehabilitation]”. These records also indicated that Petitioner “would like some auto insurance coverage for his neck injury.”

In an April 23, 2002, letter to the BCNM grievance panel, Dr. XXXXX indicated that he does not usually refer patients to chiropractors, but as of May 12, 2000, he felt Petitioner’s ongoing chiropractic care was helping him and should continue. Dr. XXXX also indicated in this letter that BCNM had told him chiropractic care was “not covered through them” and that BCNM instructed him to send Petitioner to XXX for secondary coverage for his chiropractic treatment.

XXX covered Petitioner’s chiropractic treatments for approximately $2000 because it believed BCNM did not cover chiropractic care. In early 2000, XXX decided it would no longer pay for Petitioner’s chiropractic services because it believed the treatment was no longer necessary. From the time XXX’s coverage of his chiropractic care stopped until his treatment with Dr. XXXX stopped, Petitioner accumulated $7,337 in chiropractic bills.

In early 2001, Dr. XXXX sued Petitioner for the balance he owed for his chiropractic services. Petitioner then cross-claimed against XXX for payment of this balance. Petitioner’s action against XXX was consolidated with Dr. XXXX’s action against Petitioner, and XXX and Petitioner became co-defendants. During the discovery process in this lawsuit, Petitioner first learned that BCNM does cover chiropractic care. XXX then moved for summary judgment because BCNM would have paid for chiropractic care for Petitioner if Dr. XXXXX would have found it medically necessary and had referred him to an in-network chiropractor. XXX claimed that, because Petitioner’s primary coverage (BCNM) could have paid for Petitioner’s chiropractic services, his secondary insurance (XXX) was not liable for the reimbursement of chiropractic costs.

Petitioner settled his case out of court. His attorney advised him that the law supported XXX’s motion for summary judgment, and Petitioner had signed an agreement with Dr. XXXX that he would be individually responsible for costs incurred, if XXX did not pay. The Consent Installment Judgment provided for Petitioner to make installment payments to Dr. XXXX in the total sum of $3,667.00 but if Petitioner was late or in default a total of $5,834 would be due to Dr. XXXX.

On March 13, 2002, Petitioner initiated BCNM’s grievance process seeking retro-authorization and reimbursement for the chiropractic treatment he received from Dr. XXXX. On May 7, 2002, BCNM issued a letter finally denying Petitioner’s grievance. In its letter, BCNM indicated it denied the grievance because Petitioner’s primary care provider had denied his request for referral to chiropractic care, and because Dr. XXXX is an out-of-network chiropractor.

III
ISSUE

Whether BCNM properly denied Petitioner retro-authorization and reimbursement for chiropractic treatment which he received from Dr. XXXX, an out-of-network chiropractor?

IV
ANALYSIS

Petitioner’s Position

Petitioner claims that BCNM should cover his chiropractic treatment with Dr. XXXX because it is BCNM’s policy to cover chiropractic care. He also argues BCNM should grant him retro-authorization and reimbursement for his treatment with Dr. XXXX because BCNM is his primary coverage provider, and because his secondary coverage provider, XXX, will not pay for this treatment.

BCNM’s Position

BCNM claims that Petitioner’s chiropractic treatment with Dr. XXXX is not a covered benefit because Dr. XXXX is an out-of-network chiropractor, and because Petitioner’s primary care provider, Dr. XXXX, did not issue a referral for chiropractic services. BCNM bases its claim on sections 2.01 and 2.03 of the BCN 5 Schedule of Benefits.

In its May 7, 2002, letter notifying Petitioner of its final adverse determination, BCNM indicated:

...Based on the information reviewed, the Panel determined that the services are not a covered benefit under your contract as Dr. XXXX did not issue a referral for the chiropractic services. Therefore, your request for retro-authorization and payment for chiropractic services provided by Dr. XXXX remains denied.

Additionally, for your reference please see the enclosed BCN 5 Schedule of Benefits, section 2.10, page 14, which states, “Unauthorized and Out-of-Plan Services: The Health Plan is not an insurance company but a health maintenance organization which operates a direct service basis. Health, medical, or hospital services obtained by a Member outside of the Health Plan and not authorized by Health Plan are not a covered benefit under this Certificate and cannot be reimbursed to the Member or paid for by the Health Plan. This exclusion does not apply to emergency health care as specified in Section 1.05 of this Schedule of Benefits.”

Also, please refer to section 2.03, page 15, which states, “Services, which are not medically necessary: Except as expressly provided in the Certificate, services, which are not medically necessary, are not covered. The final determination of medical necessity is the judgment of the Plan Physician with the concurrence of the Plan Medical Director.”

Commissioner’s Review

The Commissioner has carefully reviewed the documents and the arguments presented by the parties. The focus of the analysis in this case is whether the services and expenses at issue were covered under the BCN 5 Certificate of Coverage. A health maintenance organization (HMO), like BCNM, operates within a network of medical providers who sign contracts with the HMO and charge the HMO a specially negotiated rate for various services and expenses. As a result, a fundamental premise of an HMO is to centralize health care delivery within its network of providers. If an HMO member uses an out-of-network provider, then payment for the services are greatly restricted or perhaps excluded.

BCN 5 Certificate of Coverage significantly limits coverage for services performed by out-of-network providers. Section 2.01 of the Certificate states in pertinent part:

Except for emergency care as specified in Section 1.05 of this booklet, health, medical and hospital services listed in this Certificate are covered only if they are:

• Provided by a BCN-affiliated provider and
• Preauthorized by BCN.

Any other services will not be paid for by BCN either to the provider or to the member.

Dr. XXXX, who is not affiliated with BCNM, provided chiropractic services to Petitioner. Contrary to the BCN 5 Certificate of Coverage, Petitioner did not request pre-authorization of his treatment with Dr. XXXX.

Dr. XXXXX, Petitioner’s primary care physician, had the discretion to determine whether chiropractic care was medically necessary for Petitioner and if he determined that chiropractic care was appropriate he could have referred Petitioner to an in-network chiropractor. Upon examination of Petitioner’s condition, Dr. XXXX determined physical medicine and rehabilitation was the appropriate treatment. Even after he recognized chiropractic treatment was helping Petitioner, Dr. XXXXX still chose not to refer Petitioner to in-network chiropractic services.
Since Petitioner did not seek pre-authorization of out-of-network services, and since he did not obtain a referral for chiropractic care from his primary care physician, Petitioner’s treatment with Dr. XXXX is excluded from coverage by BCNM. The Commissioner therefore upholds BCNM’s final adverse determination in this matter.

V
ORDER

Therefore, the Commissioner ORDERS that BCNM’s final adverse determination is upheld. BCN-M is not liable for payment for the out-of-network chiropractic services provided to Petitioner by XXXXXXXXXXXXXXXXXX.

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.