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

ORDER

I
PROCEDURAL BACKGROUND

On September 24, 2002, the Petitioner, XXXXXXX filed a request for external review with the Commissioner of Financial and Insurance Services (Commissioner) under the Patient’s Right to Independent Review Act, MCL 550.1901 to MCL 550.1929. After a review of the material submitted, the Commissioner accepted the request on October 1, 2002.

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 the 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 October 10, 2002.

II
FACTUAL BACKGROUND

On XXXXXXXXX, the Petitioner underwent neck, spine, and disk surgery. On XXXXXXXXX, she had laminotomy surgery. Non-participating provider XXXXXXX. performed the surgeries. The charges and BCBSM’s initial payments and additional payments after review by BCBSM’s medical consultant for these surgeries are listed below:

DATE OF SERVICE - XXXXXXXX:

DATE OF SERVICE - XXXXXXXXX

The Petitioner believes that BCBSM is required to pay substantially more for her surgery. BCBSM believes that since the surgeon does not participate with BCBSM, he is not contractually bound to accept BCBSM’s approved amount as payment in full. He is 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 the Petitioner’s XXXXXXXXX and XXXXXXXXXXX surgeries?

IV
ANALYSIS

Petitioner’s Argument

The Petitioner argues that her surgeries were an absolute must. She had no use of her left arm and had much pain in her neck and left arm. The month before the surgeries she had to be on light duty at work because her arm was so bad. She is her own sole support and could not afford to lose her job.

The cost of the Petitioner’s two surgeries came to almost $22,000. After BCBSM’s payment, she is left with a balance of $14,000. She believes this is an outrageous amount to pay. It is almost what she earns in a year. She has been a BCBSM subscriber for many years. She argues the first time that she requires BCBSM to pay a substantial claim they did not come through.

The Petitioner indicated that XXXXXXXXXX is listed in the new BCBSM book of participating physicians.

The Petitioner believes that BCBSM is required to pay much more for her two surgeries.

BCBSM’s Argument

Petitioner has coverage through XXXXXXXXXXXXXXXXXXXXX, an experienced rated group. The Comprehensive Health Care Co-payment Certificate CMM 100 governs his coverage. Rider RAPS (Reimbursement Arrangement for Professional Services) also applies.

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 the 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, is not bound to accept the BCBSM amount as payment in full. The doctor therefore may balance-bill the patient.

The Certificate also provides that if more than one procedure is provided in a surgery BCBSM will pay its full-approved amount for the primary procedure and one half of the approved amount for any secondary procedures.

BCBSM determines the payment level for each service by applying a Resource Based Relative Value Scale (RBRVS). This 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 argues the $5,134.11 it paid for XXXXXXXXXXX services and the $2,977.66 it paid for the XXXXXXX surgery is equal to or greater than the maximum amount payable under its system of payment for the procedures performed.

BCBSM further argues that XXXXXXXXXX has not been a participating provider since 1997 and the Petitioner was aware he was non-participating.

BCBSM argues that it has paid the proper amount under the Certificate and is not required to pay any additional amount.

Commissioner’s Review

The Certificate of coverage controls the analysis of this matter. It defines the term “Non-participating Provider” as:

Any provider who has not signed a participation agreement with BCBSM to accept the approved amount as payment in full. However, nonparticipating 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 that a non-participant is not bound to accept it as payment in full.

Moreover, Section 2 of the RAPS Rider informs a member he 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 highlighted portion above is a clear warning that using a non-participating provider may lead to a reimbursement lower than the charged amount. This provision may be invalid if no participating providers were available within a reasonable distance. However, there were participating neurosurgeons in XXXXXX within XXXX miles of her home. The Commissioner finds that the Certificate is clear in its discussion of non-participating providers. The Certificate is available for the member to read. If a certificate is not available, the member may contact the Respondent for coverage details. It is therefore Petitioner’s responsibility to determine whether a physician participates with BCBSM.

In this case, XXXXXXX is a non-participating provider with BCBSM. He is not bound to accept the BCBSM approved amount and is free to charge a reasonable and competitive amount. There is no proof their charges were unreasonable or excessive.

The Certificate also clearly stated that non-participating providers are not bound to accept the approved amount and may charge more. The excess charges are the Petitioner’s responsibility. The Petitioner is therefore responsible for the balance.

The Commissioner finds the $5,134.11 paid by BCBSM for the XXXXX surgery and the $2,977.66 it paid for the XXXXXXXX surgery is equal to or greater than the maximum allowable under its system of payments.

V
ORDER

The final adverse determination of BCBSM dated August 19, 2002 is upheld. BCBSM is not required to pay an additional amount for the Petitioner’s XXXXXXXXXXX and XXXXXXX surgeries.

This is a final decision of an administrative agency. Under MCL 550.1915, MCL 600.631, MCR 7.101 and MCR 7.104, 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.