The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 6809

June 30, 1994

NONPROFIT HEALTH CARE CORPORATION REFORM ACT:

Payment by Blue Cross and Blue Shield of Michigan for covered services provided by a physical therapist

PHYSICAL THERAPIST:

Payment by Blue Cross and Blue Shield of Michigan for covered services provided by a physical therapist

If Blue Cross and Blue Shield of Michigan covers physical therapy in a certificate for traditional health care coverage, it must pay for physical therapy provided by any licensed physical therapist regardless of whether the therapist practices in a hospital or physical therapy clinic that has entered into a provider contract with Blue Cross and Blue Shield of Michigan.

Honorable Nelson W. Saunders

State Representative

The Capitol

Lansing, Michigan

You have asked whether Blue Cross and Blue Shield of Michigan (BCBSM) may provide its members with coverage for the services of physical therapists but restrict its payment for those services to only those licensed physical therapists who practice in hospitals or physical therapy clinics that have entered into provider contracts with BCBSM.

This office is informed that if a member chooses to obtain services from a licensed physical therapist who practices independently of hospitals or physical therapy clinics that have entered into provider contracts, BCBSM will reimburse neither the therapist nor the member for those services.

BCBSM is a health care corporation subject to the Nonprofit Health Care Corporation Reform Act (the Act), 1980 PA 350, MCL 550.1101 et seq; MSA 24.660(101) et seq. Under section 104(3) of the Act, BCBSM enters into contracts called certificates with subscribers or groups of subscribers to provide health care benefits to members. (1) Members are entitled to have payment made by BCBSM for specified covered health care services under section 105(1) of the Act.

Section 502(3) of the Act, MCL 550.1502(3); MSA 24.660(502)(3), states:

A health care corporation shall not restrict the methods of diagnosis or treatment of professional health care providers who treat members. Except as otherwise provided in section 502a, each member of the health care corporation shall at all times have a choice of professional health care providers. This subsection shall not apply to limitations in benefits contained in certificates, to the reimbursement provisions of a provider contract or reimbursement arrangement, or to standards set by the corporation for all contracting providers. A health care corporation may refuse to reimburse a health care provider for health care services that are overutilized, including those services rendered, ordered, or prescribed to an extent that is greater than reasonably necessary. [Emphasis added.]

Previous Attorney General opinions have concluded that the above-quoted section requires BCBSM to provide payment for covered health services rendered by any health care provider licensed to perform those services. For example, OAG, 1985-1986, No 6410, p 447 (December 22, 1986), determined that BCBSM subscribers are entitled to receive reimbursement for covered eye care services received from optometrists or from opthalmologists at their option where both professions are licensed to perform the covered services.

OAG, 1989-1990, No 6567, p 46, 49 (February 1, 1989), concluded that BCBSM could not deny reimbursement for covered services provided by a licensed speciality nurse that were within the scope of the speciality nurse certification and license. The opinion stated:

Considering together the definition of "health care provider" under Act 350 and the term "license" under the Public Health Code, it appears clear that the Legislature intended that such persons who provide health care services within the scope of practice statutorily conferred by the license have a lawful right to seek reimbursement from BCBSM, assuming that provision of the service in question is specified in the health care certificate.

Id., at 48.

Finally, OAG, 1989-1990, No 6621, p 179, 181-182 (July 13, 1989), considered whether BCBSM could deny reimbursement for the services of chiropractors. Again referring to section 502(3) of the Act, that opinion stated, at p 181:

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. [Emphasis added.]

Those prior opinions make it clear that BCBSM may not restrict its payment for covered health care services to certain classes of health care providers where other provider classes are authorized under the licensing statutes to perform the same services. Having thus interpreted the member choice provision of section 502(3), it follows that BCBSM may not subdivide a provider class, paying only for the services of that segment of the class that performs covered services in hospitals or physical therapy clinics that have provider contracts with BCBSM.

It is my opinion, therefore, that if Blue Cross and Blue Shield of Michigan covers physical therapy in a certificate for traditional health care coverage, it must pay for physical therapy provided by any licensed physical therapist regardless of whether the therapist practices in a hospital or physical therapy clinic that has entered into a provider contract with Blue Cross and Blue Shield of Michigan. (2)

Frank J. Kelley

Attorney General

(1) This opinion only addresses traditional health care coverage provided to subscribers under certificates approved under section 607 of the Act. It does not address health care coverage provided in connection with prudent purchaser agreements under section 502a of the Act. See, e.g., OAG, 1989-1990, No 6621, p 179 (July 13, 1989). Finally, it does not address BCBSM acting in the capacity of a third party administrator under section 207(1)(g) of the Act.

(2) However, unless the licensed physical therapist works for a hospital or physical therapy clinic that has a provider contract with BCBSM, the payment may only be made to the member, not directly to the physical therapist, since section 401(7) of the Act prohibits direct reimbursement to a provider who does not have a provider contract with BCBSM.