Issued and entered June 11, 2003 by Linda A. Watters, Commissioner

ORDER

I
PROCEDURAL BACKGROUND

On April 25, 2003, XXXXXXXXXXXXX filed a request on behalf of her son XXXX XXXXX (Petitioner) for external review with the Commissioner of Financial and Insurance Services (Commissioner) under the Patient’s Right to Independent Review Act (PRIRA) MCL 550.1901 et seq. After a review of the material submitted, the Commissioner accepted the request on May 14, 2003.

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 this filing and requested the information it used in making its adverse determination. The Office of Financial and Insurance Services received information from BCBSM on May 21, 2003.

II
FACTUAL BACKGROUND

Petitioner is a XXXXXXXXX year old with a XXXXXXXXXXXXXXX problem. He was in outpatient therapy from XXXXXXXXXXXXX to XXXXXXXX. The provider did not participate with BCBSM. Blue Cross and Blue Shield of Michigan (BCBSM) paid its approved rate minus 50% copay.

On XXXXXXXXXXXX, Petitioner entered an out-of-state residential program. He was discharged on XXXXXXXXXXXXXXXXX. He believed he made adequate arrangements with BCBSM for the admission and understood the residential treatment was a covered benefit. BCBSM denied payment for the residential stay.

In an expedited appeal letter dated XXXXXXXXXXXXXXXX, Magellan Behavioral Services, BCBSM’s authorized mental health contractor, determined that the documentation did not show medical necessity for inpatient care. A final adverse determination on April 15, 2003, upheld the denial. It noted:

There was no medical necessity for residential level of care. There was no suicidal or homicidal ideations, hallucinations, or delusions on the day of admission or thereafter.

Under the terms, conditions and limitations of your Blue Cross Blue Shield of Michigan contract, a service must be medically necessary to be covered. As applied to a request for inpatient care, medically necessary means that safe and adequate care cannot be given on other than an inpatient basis.

III
ISSUE

Did Blue Cross and Blue Shield of Michigan (BCBSM) properly deny Petitioner’s residential treatment for substance abuse?

IV
ANALYSIS

Petitioner’s Argument

Petitioner was diagnosed with Cannabis Dependence, Alcohol Abuse and Oppositional Defiant Disorder. He participated in an outpatient adolescent program from XXXXXXXXXXXXX to XXXXXXXX. The discharge summary recommended continuing recovery efforts and completion of a residential treatment program in XXXX. A letter from the outpatient treatment program dated XXXXXXXXXXXXX, notes Petitioner made progress but “his struggles to remain abstinent at this level of service were unsuccessful.” The counselor added Michigan did not have any long-term residential treatment for adolescents.

Petitioner enrolled in the XXXXXXXXXXXXXXX residential treatment program in XXXX on XXXXXXXXXXXX. The preliminary intake assessment noted he was unkempt, angry and agitated, but fully oriented with logical and organized thought process. Petitioner believes he met Magellan’s criteria for medical necessity for residential treatment as required on the medical necessity checklist because:

1. Despite 34 weeks of outpatient treatment, he was unable to maintain abstinence.
2. He was mentally competent to benefit from admission.
3. The services at XXXXXXX are consistent with the diagnosis and standards of good medical practice. (credentials and licensures provided)
4. The program provided 24-hour per day supervision with sufficient staff.
5. There was an individual treatment plan.

Petitioner entered the residential program based on the advice of professionals. Prior to admission Petitioner contacted BCBSM and confirmed that substance abuse treatment was a covered benefit with a 50% copay and a $15,000 per year cap for inpatient care. A case manager from the facility contacted BCBSM for authorization.

BCBSM’s Argument

Petitioner has health coverage under BCBSM’s Comprehensive Health Care Copayment Certificate - Series CMM 250 (Certificate) as amended by the Rider CMM-SAT-II-Substance Abuse Treatment Program Benefits. Section 1 of the Rider includes the following definition:

Approved Substance Abuse Treatment Program
A residential or outpatient program that provides medical or other services for substance abusers, meets all state licensure and BCBSM approval requirements, and has entered into an agreement with BCBSM to provide those services. [bold added]

The SunHawk Academy in Utah does not participate with the Blue Cross Blue Shield Plan in Utah or Michigan.

In defining the term “Facility Services,” Section 3 of the Rider notes the following criteria must be met in order for substance abuse treatment to be payable:

• The service must be medically necessary for the treatment of your condition
• The services must be approved by BCBSM and provided by an approved substance abuse treatment program

A first level review of the medical records by a physician determined the patient could have been treated at a lesser level of care. An independent contractor conducted an external review at the second level of appeal and also concluded there was no medical necessity for residential care.

BCBSM’s Rider CMM-SAT-2 clearly provides for residential substance abuse treatment but only if the services are approved by BCBSM and provided by an approved substance abuse treatment program. XXXXXXX is not an approved substance abuse treatment program because it does not participate with BCBSM.

Commissioner’s Review

The case file suggests there were communication problems prior to Petitioner’s admission to the XXXXXXXXXXXXXXX. Several telephone calls were made anticipating Petitioner’s treatment, but the Commissioner cannot make any findings or conclusions regarding the calls and the information Petitioner heard or perceived. It is unfortunate that the Certificate language was not more clearly communicated or understood by the Petitioner. However, the Certificate of Coverage controls the analysis in this matter.

The Certificate contains two conditions that trigger coverage. First, substance abuse treatment must be given by an approved facility that participates with BCBSM. Second, the services must be approved by BCBSM. The case file demonstrates neither the Petitioner, nor his participating physicians got BCBSM approval. Further, the XXXXXXXXXXXXXXX was not a participating facility. By failing to meet these conditions, Petitioner does not have coverage for the substance abuse treatment, regardless of the medical necessity of the treatment.

The Commissioner empathizes with the Petitioner, but it is clear BCBSM did not approve Petitioner’s admission to XXXXXXX. The Commissioner finds BCBSM is not responsible to cover the cost of the inpatient substance abuse care for Petitioner.

V
ORDER

The Commissioner upholds the BCBSM final adverse determination. BCBSM is not required to pay for Petitioner’s substance abuse treatment occurring from XXXXXXXXXXXX, through XXXXXXXXXXXXXXXXX.

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.