STATE OF MICHIGAN DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES Before the Director oflnsurance and Financial Services In the matter of:

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1 STATE OF MICHIGAN DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES Before the Director oflnsurance and Financial Services In the matter of: v Petitioner, State of Michigan, Plan Sponsor, File No SF ~md Blue Cross Blue Shield of Michigan, Plan Administrator, Respondents. ~ued and entered this..!!. day of Septembe by Randall S. Gregg Special Deputy Director ORDER J. PROCEDURAL BACKGROUND On August 4, 2014, authorized representative ofher husband - - Petitioner), filed a request with the Director of the Department oflnsurance and Finan.cial Services for an extemal review tmder Public Act No. 495 of2006 (Act 495), MCL et seq. On August 11, 2014, after a preliminary review of the information submitted, the Director accepted the Petitioner's request. The Petitioner receives health care benefits through a group plan sponsored by the State ofmi cbi ga~ (the plan), a self-funded govenunental plan as defined in Act 495. Blue Cross Blue Shield of Michigan (BCBSM) administers the plan. The Director immediately notified BCBSM of the extemal review request and asked for the information it used to make its final adverse determination. The Director received BCBSM's response on August 20,2014. Section 2(2) of Act 495, MCL (2), authorizes the Director to conduct this extemal review as though the Petitioner was a covered person under the Patient's Right to Independent Review Act, MCL , et seq.

2 Page2 This case presents an issue of contractual interpretation. The Director reviews contractual issues pursuant to MCL (7). This matter does not require a medical opinion from an independent review organization. II. FACTUAL BACKGROUND The terms of th~ ;petitioner's c9verage are found in a docu~ent called The Stale Health Plan PPO for Retirees Not Eligible for lvfedicare or Who Have Coverage That Pays Before the State Health Plan PPO (the handbook) , the Petitioner was transported by helicopter from Hospital Florida, to - Hospital - in- Florida. The air ambulance provider does not participate with BCBSM or a local Bhle Cross or Blue Shield plan in Florida. The charge for the transp01t was $37, BCBSM approved $5, for this transp01t and paid that amount to the provider. This left the Petitioner responsible for the balance of the provider's charge ($31,253.33). The Petitioner appealed BCBSM's payment decision through its intemal grievance process. BCBSM held a managerial-level conference on May 28, 2014, unci then.issued a fmal adverse determination dated June 25,2014, affuming its decision. The Petitioner now seeks a review of that adverse detenuination from the Director.. Ill. I SSUE Is BCBSM required to pay any additional amount for the Petitioner's air ambulance transport? Petitioner's Argument IV..A.NA.LYSJ.S In his request for an extema1 review, the Petitioner wrote: Received a bill from air ambulance ride on 1/J 5/J 4 for an emergency spinal angiograph. [The Petitioner] was paralyzed from the waist dowu and could not wall<. Received exp.lanation of benefits 2/2l/14 stating we fiad zero balance, but still getting bills and calls f We called [BCBSM) and. was told Company was nonparticipating.

3 FileNo.l Page3 Sent protest to [BCBSMJ and detennination states can balance bi11 us for difference of $3 1, We would like a settlement with -hat [BCBSM] settles with no liability to us. We are retired and on a fixed income and fit1d the amount ridiculous. BCBSM's Argument In its final adverse determination, BCBSM's representative explained to the Petitioner:... I confirmed that our payment determination is correct. Your air ambulance services were provided by a nonparticipating provider,.. a1id our approved amount of $5,982. I I was reimbursed to the provider. The difference between BCBSM's approved amount and the provider's charge remains your responsibility... Page 90 of the handbook explains that the approved amount is the BCBSM maximum payment level or the provider's billed charge for the covered service, whatever is lower. In this case we paid our approved amount of$5, to the provider. As mentioned above, the provider is a nonpa1ticipating provider. Nonparticipating providers have not signed a participating agreement with BCBSM or with our local Blue Cross and I or Blue Shield plan ("Host Plan") to accept the approved amount as payment in full... I understand that you had no decision in the selection of the company that would be transporting you; however, we must administer your benefits in accordance with the terms of his [sic) health care plan. As such the provider can bill you for the difference between our approved amount and their charged amount. In an dated August 20, 2014, submitted for this extemal review, BCBSM also said: Director's Review The Explanation ofbenefits (EOB) is indicating that the provider is participating because the claim was processed at the in-network benefit payment level. BCBSM paid the approved amount at l 00 percent. The EOB also reflects that the provider is non-pru1icipating and they may bill the member for the amount charged above the approved amount Air ambulance services are a covered benefit under the plan (handbook, pp ) and there is no dispute in this case that air ambulance transportation was medically necessary. l11ere is also no dispute that the air ambulance provider is a nonparticipating provider even though the

4 Page4 explanation of benefit payments ("EOB") statement indicated that it was a participating provider. 1 The handbook explains that BCBSM pays its "approved amount" for covered services. "Approved amount" is defined in the handbook (p. 90) as "the BCBSM maximum payment level or the provider's billed charge for the covered service, whichever is lower." BCBSM's maximum payment level for the Petitioner's air ambulance transpmt was $5, so that became BCBSM's approved amount because it was lower than the provider's billed charge. If the air ambulance service had been a pmticipating provider, it would have accepted the $5, as payment in full for the transport. However, the provider did not pmticipate with either BCBSM or a Blue Cross or Blue Shield plan in Florida. A nonparticipating provider is not required to accept BCBSM approved amount as payment in full and may bill the Petitioner for the difference between its billed chm ge and the amount BCBSM paid. vider: The handbook (pp ) explains the consequences of using a nonparticipating pro- Nonpa1ticipating providers are providers who aren't in the PPO network and don't participate in any BCBSM plan. If you receive services from a nonparticipating provider, in addition to the out-of-network deductible and copayments, you may also be responsible for any charge above BCBSM's approved amount. That's because providers who don't participate with BCBSM may choose not to accept BCBSM's approved amount as payment in full for covered services. You may also be required to file your own claim. [Underlining added] Unfortunately, there is nothing in the handbook or in state law that requires the plan to pay more than BCBSM' s approved amount for the air ambulance transport, even if, as may be the case here, there was an emergency and the Petitioner had no choice in selecting a provider. The Director concludes that BCBSM con ectly processed the claim for the Petitioner's air ambulance transport according to the terms of the handbook. V.. ORDER The Director upholds BCBSM's final adverse determination of June 25,2014. BCBSM is not required to pay any additional amount for the Petitioner's air ambulance services. 1 The EOB statement dated February 21,2014, showed the provider's status as "participating." However, the EOB also said, "The Provider's [sic] Blue Cross Blue Shield plan has no participation contract with this provider. If this provider sends you a bill, you should expect to pay the difference between the charge and our payment."

5 Page 5 This is a final decision of an administrative agency. Under MCL , any person ~~~grieved by this order may seek judicial review no later than sixty days from the date of this m:aer in the circuit court for the Michigan county where the covered person resides or in the circuit cmui of Ingham County. A copy of the petition for judicial review should be sent to the Depmiment of Insurance and Financial Services, Office of General Counsel, Post Office Box 30220, Lansing, MI Annette E. Flood Director Special Deputy Director