STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6621

July 13, 1989

HEALTH MAINTENANCE ORGANIZATIONS:

Contract with or employment of chiropractors

NON PROFIT HEALTH CARE CORPORATION REFORM ACT:

Reimbursement of chiropractors for covered services

PRUDENT PURCHASERS:

Reimbursement of chiropractors not members of provider panel

Blue Cross and Blue Shield of Michigan is required, under its traditional health care coverage, to reimburse chiropractors for those services which chiropractors are licensed to perform and which are covered under a subscribers health care certificate.

Blue Cross and Blue Shield of Michigan is not obligated, as part of its coverage through Prudent Purchase Act agreements, to provide services capable of being performed by licensed chiropractors but where such services are covered in such agreements, it may not discriminate against chiropractors in establishing provider panels for services a chiropractor is qualified to perform. It may not refuse to reimburse chiropractors who are not members of the provider panel for providing services on an emergency basis, or for covered services for which beneficiaries are not required to seek treatment solely from members of the provider panel.

While a health maintenance organization is not required to provide those services which chiropractors are licensed to provide, if it does provide such services, it may not refuse to contract with or employ chiropractors as a class of health professionals but must base its health professionals hiring decisions on factors such as those designed to promote cost-effective quality health care.

Honorable Lynn Owen

State Representative

The Capitol

Lansing, Michigan 48909

You have requested my opinion as to whether Blue Cross and Blue Shield of Michigan (BCBSM) is obligated under statutory anti-discrimination provisions to provide reimbursement to chiropractors for certain services rendered to subscribers of traditional health care coverage, Health Maintenance Organizations (HMOs) and Preferred Provider Associations (PPAs).

Chiropractors are licensed pursuant to Article 15, Part 164 of the Public Health Code, 1978 PA 368, Sec. 16401 et seq, MCL 333.16401 et seq; MSA 14.15(16401) et seq. The "practice of chiropractic" is defined by Sec. 16401(b) to mean

Thus, the scope of chiropractic practice is very limited, and chiropractors may only diagnose and treat spinal subluxations or misalignments. Attorney General v Beno, 422 Mich 293, 317; 373 NW2d 544 (1985); OAG, 1987-1988, No 6523, p 338 (June 9, 1988).

BCBSM is a non-profit health care corporation regulated by the Commissioner of Insurance pursuant to the Nonprofit Health Care Corporation Reform Act, 1980 PA 350, MCL 550.1101 et seq, MSA 24.660(101) et seq (hereinafter Act 350). BCBSM offers traditional health care coverage pursuant to Act 350, HMO coverage as authorized by Act 350, Sec. 207(h), MCL 550.1207(h); MSA 24.660(207)(h), and health care coverage pursuant to prudent purchaser agreements as authorized by Act 350, Sec. 502a, MCL 550.1502a; MSA 24.660(502a). BCBSM HMOs are further regulated pursuant to Article 17, Part 210 of the Public Health Code, MCL 333.21001 et seq; MSA 14.15(21001) et seq. BCBSM prudent purchaser agreements are further authorized and regulated pursuant to the Prudent Purchaser Act, 1984 PA 233, MCL 5S0.51 et seq; MSA 24.650(51) et seq. Act 350 exempts BCBSM from the requirements of the Insurance Code of 1956, 1956 PA 218, MCL 500.100 et seq; MSA 24.1100 et seq, unless such provisions are expressly made applicable by Act 350, MCL 550.1201(4), MSA 24.660(201)(4). Since there are no provisions of the Insurance Code of 1956 which are relevant to the issues you have presented, the Insurance Code of 1956 need not be addressed.

Because the statutory requirements imposed on BCBSM differ when offering traditional coverage, prudent purchaser agreements, or HMO coverage, each will be addressed separately.

A. BCBSM Traditional Health Care Coverage

BCBSM traditional health care coverage means health care coverage provided under a certificate issued by BCBSM pursuant to Sec. 607 of Act 350, MCL 550.1607; MSA 24.660(607). The certificate is the contract between the subscriber and BCBSM which sets forth the benefits to which the subscriber is entitled. BCBSM is permitted to reimburse chiropractors for those services provided to subscribers that chiropractors may legally perform and chiropractors are considered "providers" of those services. MCL 550.1105(4); MSA 24.660(105)(4).

Section 502(3) of Act 350, MCL 550.1502(3); MSA 24.660(502)(3), contains the anti-discrimination language to which you refer. This section states:

This section has been interpreted to mean that while BCBSM is not required to provide coverage for services unless mandated elsewhere in Act 350, where the certificate does establish coverage for certain health care services, all health professionals licensed to provide those services are entitled to reimbursement. Thus, chiropractors are entitled to reimbursement for services if the certificate includes their services as covered health care services, provided that chiropractors are licensed to provide such services.

In Cowan v BCBSM, 166 MichApp 568; 421 NW2d 243 (1988), involving the obligations of BCBSM in entering prudent purchaser agreements, the court concluded that BCBSM was not required under Sec. 502 to provide coverage for those services which chiropractors are licensed to perform:

While BCBSM is not obligated to provide coverage for those services chiropractors are licensed to provide, chiropractors cannot be denied reimbursement if those services are covered. OAG, 1985-1986, No 6410, p 447, (December 22, 1986), dealt with the reimbursement of optometrists and ophthalmologists and concluded that BCBSM could not deny reimbursement to optometrists when the eye care services covered in the certificates could be performed by either class of health professional. Similarly, OAG 1989-1990, No 6567, p --- (February 1, 1989), concluded that BCBSM may not deny reimbursement to licensed nurses for those services which are covered under the certificate and which nurses are licensed to perform without delegation and supervision by a physician.

Thus, to answer your question in regard to BCBSM traditional health care coverage, BCBSM is required to reimburse chiropractors for those services which chiropractors are licensed to perform, and which are covered under the subscriber's health care certificate.

B. Preferred Provider Agreement

Preferred Providers Associations (PPAs) are an alternative health care delivery system to that offered under a traditional health care plan. The theory underlying PPAs is that health care costs can be controlled and quality health care provided if organizations purchasing care can selectively contract with health care providers to obtain the most efficient reimbursement arrangements. Pursuant to Sec. 2(j) of the Prudent Purchaser Act, MCL 550.52(j); MSA 24.650(52)(j), the organizations which can take advantage of PPAs are insurers, dental care corporations, hospital service corporations, medical care corporations, health care corporations, or third party administrators. BCBSM, as a health care corporation, is further authorized and regulated in entering into PPAs by Sec. 502a of Act 350, MCL 550.1502a; MSA 24.660(502a). The group of providers with contractual agreements with the purchaser is referred to as the provider panel. Health care coverage provided to beneficiaries under PPAs can require that nonemergency treatment be obtained exclusively from members of the provider panel, or can merely provide financial incentives to beneficiaries to utilize the services of the provider panel. MCL 550.1502a(2) and (4); MSA 24.660(502a)(2) and (4).

Section 3 of the Prudent Purchaser Act, MCL 550.53; MSA 24.650(53), places certain restrictions on the purchaser's ability to exclude providers from the provider panel. Section 3(1) states:

Section 3(6) requires:

These sections thus impose certain restrictions on the ability of the purchaser to discriminate against any provider or class of provider. Once a panel is formed, all providers in a given geographic area are entitled to be members of the provider panel and enter into prudent purchaser agreements if they are willing to accept the same terms as other members of the panel. Moreover, all providers who are licensed to provide a given service must be offered the opportunity for membership on the provider panel. Neither of these sections, however, requires that those services which chiropractors are licensed to perform be covered services under the applicable certificate. Nor does subsection (6) require that chiropractors be made members of the provider panel, merely that they be given the opportunity, in good faith, to meet the criteria established for providers.

In addition, Sec. 502a of Act 350 contains anti-discrimination language which limits the ability of BCBSM to exclude health care providers from its provider panels:

Where the applicable certificate includes those services that a chiropractor.is legally authorized to perform, BCBSM cannot refuse to have chiropractors on its provider panel; the chiropractors on the panel may thus obtain reimbursement pursuant to the terms of the PPA.

In Cowan v BCBSM, supra, plaintiff chiropractors challenged the "Trust" PPA of BCBSM claiming that the PPA's exclusion of virtually all chiropractic services, given that chiropractors were members of the provider panel, violated the requirements of Sec. 502a. The Court of Appeals interpreted the requirements of the Prudent Purchaser Act, consistent with its interpretation of Sec. 502 of Act 350, to require reimbursement only for those services which are covered by the subscriber contract and which chiropractors are licensed to perform:

In addition, reimbursement can be made by BCBSM to providers who are not members of the provider panel in one of two circumstances. First, persons receiving care under PPAs may not be required to receive care from the provider panel exclusively, but instead, receive a financial incentive to receive care from these providers. MCL 550.1502a(4); MSA 24.660(502a)(4). Under these circumstances, as with traditional BCBSM coverage, BCBSM could not discriminate against a class of providers for the provision of services which are part of the coverage offered. This is clear since the Prudent Purchaser Act states that purchasers authorized under the Act are required to conform to their enabling act, MCL 550.58; MSA 24.650(58), so that BCBSM would be required to comply with Sec. 502 of Act 350, MCL 550.1502; MSA 24.660(502).

The second circumstance in which health professionals who are not members of the provider panel will be reimbursed by BCBSM deals with the provision of emergency services. Providers of services to beneficiaries or subscribers under the plan of the organization can be reimbursed for providing emergency services as set forth in Sec. 3(11) of the Prudent Purchaser Act:

Since a chiropractor is a health care provider as to those services which he or she is licensed to perform, BCBSM cannot refuse to reimburse chiropractors for emergency services provided pursuant to Sec. 3(11).

Thus, to summarize, BCBSM is not obligated to provide those services which chiropractors are licensed to perform as part of the coverage it offers through PPAs. Where such services are covered in a PPA, however:

C. HMOs

HMOs are another alternative to the traditional insurance mechanism of health care delivery. The arrangements for the provision of services to enrollees under HMO plans differ from traditional BCBSM health care plans in that HMOs are both the payers and providers of health care. The HMO ensures that medically appropriate services are provided to enrollees by employing or contracting with physicians and other health care providers. The HMO is responsible for the quality of care provided. MCL 333.20106; MSA 14.15(20106), defines a "health maintenance organization" as

MCL 33.21053(4); MSA 14.15(21053)(4), authorizes HMOs to contract with or directly engage health professionals and affiliated providers to render the services the organization has agreed to provide under the terms of the health maintenance contract. "Health professionals" include any "individual licensed, certified, or authorized in accordance with state law to practice a health profession in his or her respective state." MCL 333.21005(4); MSA 14.15(21005)(4). "Affiliated providers" include health professionals "having a contract with a health maintenance organization to render 1 or more health maintenance services to an enrollee." MCL 333.21002; MSA 14.15(21002). Thus, HMOs may contract with and reimburse chiropractors for care provided to subscribers.

The "health maintenance contract" establishes the benefits to which the subscribers are entitled, MCL 333.21005(1); MSA 14.15(21005)(1), and must include the services required by Sec. 21034(d), as specified in Sec. 21007(1), and may include other services. MCL 333.21007(1) and 333.21034(d); MSA 14.15(21007)(1) and 14.15(21034)(d). Chiropractic services are no longer required to be included in health maintenance contracts, since the requirement imposed by 1978 PA 368, Secs. 21008(g) and 21034(d), that chiropractic services be offered by HMOs three years after the HMO license is issued, was repealed by 1982 PA 354. As OAG, 1987-1988, No 6523, supra, concluded, although there is no requirement that chiropractic services be provided to HMO subscribers as a matter of law, health maintenance contracts entered into between the HMO and a subscriber or a group of subscribers may require the provision of such services. Under the contract between an HMO and the state at issue in OAG, 1987-1988, No 6523, supra, chiropractic services were to be provided when medically necessary. (The contract language was "[t]he [HMO] shall provide, or arrange for the provision of, the following services which covered persons may require [including] ... practitioners' services, such as those provided by physicians, optometrists, podiatrists, and chiropractors.") It is noted that it was not required that the primary physicians be chiropractors, but that where the primary physician determined that chiropractic services were medically necessary, that such services be provided.

The anti-discrimination provision to which you refer in your opinion request is MCL 33.21053(4); MSA 14.15(21053)(4), which states:

MCL 333.21021(a); MSA 14.15(21021)(a), requires the HMO to provide an acceptable quality of health care by qualified health personnel. If chiropractic services are not covered under the health maintenance contract, no question of discrimination is raised. Where such services are provided under the health maintenance contract, the HMO may not refuse either to contract with or to employ chiropractors solely because of the class of health care providers to which they belong. Instead, the HMO should base its decision on factors "relevant to the delivery of economical quality care." Id.

Thus, to summarize the HMO aspect of your question, HMOs are not required to provide those services which chiropractors are licensed to perform. Where an HMO does provide these services, however, and seeks to contract or employ health professionals to provide the services, it cannot refuse to contract with or employ chiropractors as a class of health professionals, but must base its decisions concerning the hiring of health professionals on other factors, those designed to promote cost-effective quality health care.

Frank J. Kelley

Attorney General