STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
IN THE OFFICE OF
ADMINISTRATIVE HEARINGS
08 INS 1039
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MICHELLE PATTON,
Petitioner,
v.
BLUE CROSS BLUE SHIELD
NORTH CAROLINA STATE HEALTH PLAN,
Respondent.
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DECISION
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On 10 October 2008, the undersigned conducted an administrative hearing in this matter in Charlotte, North Carolina. At the conclusion of the presentation of the evidence, the undersigned requested that the parties submit proposed decisions within thirty (30) days of the hearing. Counsel for Respondent timely forwarded a proposed decision to the Office of Administrative Hearings, counsel for Petitioner submitted Petitioner’s proposed decision on 19 November 2008. The record in this case is now closed.
APPEARANCES
For the Petitioner: Timothy A. Zarsadias
Hull & Chandler, P.A.
521 E. Morehead St., Suite 101
Charlotte, NC 28202
For the Respondent: Robert D. Croom
Assistant Attorney General
North Carolina Department of Justice
Post Office Box 629
Raleigh, North Carolina 27602-0629
ISSUE
Did Respondent act erroneously or fail to use proper procedure when it processed and paid claims for health care services received by the Petitioner from Raymond Haigney, M.D. on or about November 13, 2007 and November 19, 2007?
RELEVANT STATUTES AND POLICIES
North Carolina General Statute §§ 135-40.1, 135-40.4, 135-40.6, 135-40.7, & 135-40.8; N.C. Gen. Stat. Chapter 150B, Article 3; Respondent’s medical policy SU0650 “Professional Surgical Benefits.”
EXHIBITS ADMITTED INTO EVIDENCE
For the Respondent: Exhibits 1 through 11
For the Petitioner: Exhibits 1, 2, 3 and 5
FINDINGS OF FACT
1. All parties are properly before the Court and the Court has jurisdiction of the parties and of the subject matter.
2. Petitioner has been correctly designated and Respondent’s correct designation is the North Carolina Teachers’ and State Employees’ Comprehensive Major Medical Plan (hereinafter “Respondent” or “Plan”).
3. Respondent, an agency of the State of North Carolina, offers health care benefits to eligible active and retired employees and their enrolled dependents in accordance with the applicable North Carolina General Statutes and the Plan’s medical policies. See N.C. Gen. Stat. § 135-40 et seq. Plan benefits are administered by Blue Cross and Blue Shield of North Carolina, the Plan’s claims processing contractor.
4. Petitioner was a member of the Plan at all times relevant to this action.
5. On or about 13 November 2007, Petitioner went to the emergency room at Presbyterian Hospital for treatment of a dog bite wound to her right ear.
6. In the emergency room, Petitioner was treated by the surgeon who was on call, Dr. Raymond Haigney (hereinafter “Haigney”).
7. Haigney determined that the treatment of the wound would require multiple surgeries.
8. Following Haigney’s treatment of Petitioner on 13 November 2007, but before the second surgery scheduled for 19 November 2007, Haigney contacted Respondent to ensure that the procedures would be covered.
9. On 15 November 2007, Haigney spoke with Linda Nellenback (hereinafter “Nellenback”), the clinical team leader for medical review for the State Comprehensive Major Medical Plan at Blue Cross and Blue Shield of North Carolina.
10. Haigney gave Nellenback his plan for the phased reconstruction of Petitioner’s ear and provided the Current Procedural Terminology codes (hereinafter “CPT codes”) for the procedures he planned to perform.
11. CPT codes are nationally recognized codes used by providers.
12. Each procedure had a separate CPT code.
13. The CPT code for each procedure communicates information about the amount of time and the difficulty of the procedure.
14. Nellenback informed Haigney that all CPT codes he performed in the emergency room on 13 November 2007 and all that he planned to perform on 19 November 2007 were approved as “covered” services.
15. Haigney does not participate with any medical plans, including Respondent’s Costwise network.
16. At the time of speaking with Nellenback, Haigney understood that by approving the procedures he requested, Respondent was not guaranteeing payment of his charges.
17. Nellenback testified that she never told Haigney that all of his charges would be paid.
18. Haigney understood that all of his charges would not be paid by Respondent.
19. Petitioner credibly testified that Haigney did not tell her that he was not a member of Respondent’s network.
20. Petitioner credibly testified that Haigney told her that her charges would be “covered.” Petitioner understood “covered” to mean that she would not owe Haigney any money out-of-pocket, but that insurance would pay all charges.
21. Haigney performed the second surgery on 19 November 2007.
Discussion of Relevant Law
22. Pursuant to N.C. Gen. Stat. § 135-40.6, the Plan pays the usual, customary and reasonable charges for covered surgical services.
23. Pursuant to N.C. Gen. Stat. § 135-40.7, in no event shall charges in excess of either the usual, customary and reasonable charge for or the fair and reasonable value of the services or supply which gives rise to the to the expense be considered covered expenses nor will benefits described in N.C. Gen. Stat. § 135-40.5 through N.C. Gen. Stat. § 135-40.11 be payable for the charges; provided that in each instance the extent that a particular charge is usual, customary and reasonable or fair and reasonable shall be measured and determined by comparing the charge with similar charges made for similar things to individuals of similar age, sex, income and medical condition in the locality concerned and the result of such determination shall constitute the maximum allowable as covered medical expenses unless the Claims Processor finds that considerations of fairness and equity in a particular set of circumstances require that greater or lesser charges be considered as covered medical expenses in that set of circumstances.
24. Pursuant to N.C. Gen. Stat. § 135-40.1(19), the meaning of the term “UCR” shall be developed from criteria used for determining reasonable charges for services, including usual preoperative examination and customary postoperative care and care of usual complications, and shall be based on the usual charge made by an individual doctor for his or her private patients for a particular service, or the customary charge within the range of usual fees charged by most doctors of similar skill and training in North Carolina for the comparable service, whichever is the lower. A fee is reasonable if it meets the above two criteria.
25. Further pursuant to N.C. Gen. Stat. § 135-40.1(19), in cases of unusual complexity and cases involving supplemental skills of two or more doctors, reasonable charges will be determined by the Claims Processor upon advice of its medical advisors.
26. N.C. Gen. Stat. § 135-40.1(19) also states that the Plan’s Executive Administrator and Board of Trustees may update usual and customary and reasonable charges, or other such comparable allowances, semi-annually for physicians who accept the Plan’s UCR or other comparable allowances as payment in full, other than for the Plan’s deductibles, coinsurance, or other amounts to be paid by members of the Plan; otherwise, the Executive Administrator and Board of Trustees shall not update usual, customary and reasonable charges, or other such comparable allowances more frequently than on an annual basis.
27. N.C. Gen. Stat. § 135-40.8(e) states that in a medical emergency, as defined by the statute, if a Plan member is not capable of making a decision about choosing an in-State qualified preferred provider and emergency services personnel transport the Plan member to a provider outside of the Plan network, then any amount of charges for services under this section that exceeds the amount allowed by the Plan for services of qualified preferred providers under this section shall be negotiated between the plan and the provider of medical services, and the Plan shall ensure that the Plan member is not held financially responsible for the amount of these excess charges.
28. Pursuant to Respondent’s medical policy SU0650, “Professional Surgical Benefits” (hereinafter “Policy 0650"), when two or more covered surgical procedures are performed by the same surgeon through separate incisions or operative approaches during the same operative session, the surgical benefits are limited to 100% UCR allowance for the one procedure which has the higher UCR allowance and the remaining covered surgical procedures are limited to 50% UCR allowance.
29. Haigney submitted his claims for reimbursement to Respondent on separate CMS-1500 forms (hereinafter “claim forms”), one for the 13 November 2007 emergency room visit and one for the 19 November 2007 surgery.
30. Haigney listed each procedure he performed by its CPT code on the claim forms.
31. Respondent paid and processed the claims based on the CPT codes as listed on the claim forms submitted by Haigney.
32. Haigney credibly testified that he understood UCR to be the average charge for a certain type of procedure.
33. Haigney further credibly testified that he was not familiar with the General Statutes controlling how Respondent pays claims.
34. N.C. Gen. Stat. § 135-40.1(19) does not define UCR to be the average charge for a certain type of procedure.
35. Haigney testified that the charges he submitted were very similar to his average charges for the procedures performed.
36. Haigney’s charges can be used as his usual charge under N.C. Gen. Stat. § 135-40.1(19).
37. Respondent provided evidence in the form of printouts from its Usual and Customary Inquiry computer database of the customary charge within the range of usual fees charged by most doctors of similar skill and training in North Carolina for the comparable service (hereinafter “customary charge”) for the procedures billed by Haigney.
38. Petitioner presented no evidence to show that the customary charges were not the correct customary charges for the procedures billed by Haigney.
Haigney’s Charges and the Plan’s Payments for 13 November 2007
39. On 13 November 2007, Petitioner was not transported to the emergency room by emergency services personnel.
40. Haigney testified that the 13 November 2007 emergency room surgery took roughly fifty (50) minutes.
41. Haigney’s claim form for 13 November 2007 contained claims for three (3) separate procedures identified by their CPT codes performed during that time.
42. For each of the three (3) claims submitted for the 13 November 2007 surgery, the customary charge was less than Dr. Haigney’s usual charge as shown in the chart below:
Procedure CPT Code / Haigney’s Usual Charge / Customary Charge14060 / $3,000.00 / $1,488.50
15004 / $1,000.00 / $405.13
99245(57) / $450.00 / $323.00
43. Petitioner presented no evidence that the three (3) procedures performed on 13 November 2007 were of unusual complexity.
44. Pursuant to N.C. Gen. Stat. § 135-40.1(19), Respondent correctly determined that the customary charge for the three (3) procedures performed on 13 November 2007 was the reasonable fee.
45. Respondent correctly calculated Petitioner’s deductibles and copayments for the 13 November 2007 procedures.
Haigney’s Charges and the Plan’s Payments for 19 November 2007
46. The 19 November 2007 surgical visit took roughly five (5) hours.
47. The claim form for 19 November 2007 contained claims for three separate procedures identified by their CPT codes.
48. Haigney submitted the claim for procedure 21230 with the modifier “22" which indicates “Unusual Procedural services (Services greater than that usually required for the procedure).”
49. Haigney did not use the “22" modifier for either of the other two (2) procedures, 15732 and 14060.
50. Procedures 15732 and 14060 were submitted with the modifier “58" which indicates a “Staged or Related Procedure or service by the Same Physician During the Postoperative Period.”
51. Pursuant to Policy 0650, Respondent processed and paid 15732(58) and 14060(58) at 50% of the UCR allowance for the procedures.
52. For each of the three (3) claims submitted for the 19 November 2007 surgery, the customary charge was less than Dr. Haigney’s usual charge as shown in the chart below:
Procedure CPT Code / Haigney’s Usual Charge / Customary Charge21230(22) / $15,000.00 / $1,701.78
15732(58) / $4,679.00 / $2,270.00
14060(58) / $3,000.00 / $744.25
53. Pursuant to N.C. Gen. Stat. § 135-40.1(19), Respondent correctly determined that the customary charge for the three procedures performed on 19 November 2007 was the reasonable fee.
54. Respondent correctly calculated Petitioner’s deductibles and copayments for the 19 November 2007 procedures.
Provider Courtesy Review
55. Haigney testified that the entire surgery on 19 November 2007 fell outside of what is usual and customary.
56. Haigney testified that the procedure, coded 21230(22), only took about one (1) hour of the five (5) hour surgery.
57. Haigney, however, did not sufficiently explain and Petitioner otherwise did not demonstrate why the procedure coded 21230(22) was an unusual service.
58. Only after completing the procedure coded 21230(22) did Haigney spent roughly one and one-half to two (1 1/2- 2) hours shaping the cartilage to fit the ear.
59. After receiving Respondent’s initial processing of the claim, Haigney requested a provider courtesy review and submitted operative notes which detailed the complex nature of the 19 November 2007 surgery.
60. Respondent’s notes show that medical director Dr. Fred Holt, a head and neck surgeon, reviewed the operative notes, office notes, photos and anesthesia records using relevant industry-standard bundling software, ICD-9, CPT and HCPCS coding manuals.
61. Dr. Holt determined that there should be no additional reimbursement for the 13 November 2007 charges.
62. Dr. Holt reviewed the charges for 19 November based on the “22” modifier and decided based on the entire operative session to allow the greater UCR allowance for the procedure coded 15732.
63. There is no statutory requirement that Respondent increase the UCR allowance based solely on the inclusion of a “22" modifier.
64. For the 19 November 2007 charges, as allowed by N.C. Gen. Stat. § 135-40.1 in cases of unusual complexity, Dr. Holt determined that the second procedure listed—15732-- should be paid as the primary procedure and the other procedures should be paid as secondary to it.
65. Dr. Holt’s review increased the reimbursement to Haigney as follows:
Procedure CPT Code / Haigney’s Charge / Revised Reimbursement21230(22)(58) / $15,000.00 / $850.88
15732 / $4,679.00 / $4,540.00
14060(58) / $3,000.00 / $744.25
66. Pursuant to N.C. Gen. Stat. § 135-40.1(19), Respondent correctly determined the reasonable charges for the 19 November 2007 procedures.