Legal Issues

February 2008

Equal Treatment: The Legal Basis for Demanding Equal Treatment of Chiropractic (Part II)

By:       MAC attorney Kevin Moody, Esq.

As published in the January 2008 MAC Journal (p. 8), the issue of equal treatment has long been an item high on the agenda of the chiropractic trade associations. In the January 2008 article, equal treatment provisions applicable to health maintenance organizations and indemnity insurance policies were analyzed. In Part II, the analysis turns to Act 350 and Blue Cross, as well as anti-discrimination provisions contained in the Prudent Purchaser Act that affect ERISA plans.

A.  Blue Cross and PPOs.

Pursuant to MCL 550.1502a(11) (Act 350 governing Blue Cross) and 550.53(7) (the Prudent Purchaser Act governing PPOs) (1), Blue Cross is prohibited from discriminating against a class of physicians in forming provider panels. The former provision expressly states that Blue Cross “shall not discriminate against a class of health care providers when entering into prudent purchaser agreements with health care providers for its provider panel,” and the latter provision states that, “[i]f 2 or more classes of health care providers may legally provide the same health care service, the organization shall offer each class of health care provider the opportunity to apply to the organization for membership on the provider panel.” Any assessment of whether a particular arrangement is violative of the foregoing provisions necessarily starts with what constitutes the scope of chiropractic. 

The scope of practice for chiropractic physicians is set forth in MCL 333.16401(b), which provides in pertinent part:

(b) “Practice of chiropractic” means that discipline within the healing arts which deals with the nervous system and its relationship to the spinal column and its interrelationship with other body systems.  Practice of chiropractic includes:

(i)      Diagnosis, including spinal analysis, to determine the existence of spinal subluxations or misalignments that produce nerve interference, indicating the necessity for chiropractic care

(ii)    The adjustment of spinal subluxations or misalignments and related bones and tissues for the establishment of neural integrity utilizing the inherent recuperative powers of the body for restoration and maintenance of health.

(iii)   The use of analytical instruments, nutritional advice, rehabilitative exercise and adjustment apparatus regulated by rules promulgated by the board pursuant to section 16423, and the use of x-ray machines in the examination of patients for the purpose of locating spinal subluxations or misaligned vertebrae of the human spine. (Emphasis added.)

Thus, in addition to the statutory provision, rules help define the scope of chiropractic practice.  It is also self evident that chiropractic physicians may perform not only chiropractic adjustments and rehabilitative exercise, but, as varying plans must be reviewed for potential discrimination, physical therapy and physical medicine modalities must be taken into account as well. Indeed, it must be remembered that much of the practice of physical therapy is encompassed within the scope of chiropractic. The Supreme Court observed that a review of the two scopes “reveals considerable overlapping among them (Attorney General v Beno, 422 Mich 293, 332 (1985)).” Chiropractic clearly goes far beyond the parameters of physical therapy when related to the spine. The point, however, is that the disenfranchisement of chiropractic physicians often occurs under the guise of physical therapy.   

In this connection, Blue Cross introduced a policy called “Healthy Blue” which did precisely that. Among other things, it excluded chiropractic physicians from performing physical therapy and physical medicine modalities, which were within the scope of chiropractic. The policy was challenged and the Commissioner of Insurance ruled that the policy was unlawful and must be withdrawn from the market (See Michigan Chiropractic Society v Blue Cross Blue Shield of Michigan, Commissioner of Financial and Insurance Services, Case No. 05-454-BC (Final Decision, July 5, 2007)). In any event, Blue Cross (as well as Physicians Health Plan in the case of Michigan Chiropractic Society v Physicians Health Plan of Mid-Michigan, Inc, Ingham County Circuit Court Case No. 03-1992-CZ (Settlement Agreement and Order of Dismissal dated May 16, 2005)) had taken the position that chiropractic manipulation has its own coding in the CPT Codes (2) and, therefore, may be readily excluded without violating the non-discrimination provisions cited above. This position, however, does not make sense in the context of the legislative scheme. If avoiding a claim of discrimination simply required one to differentiate between a chiropractic manipulation, an osteopathic manipulation or manual manipulation therapy by a physical therapist supervised by a medical doctor, there would be no protection whatsoever against discrimination. 

What is critical is that the relevant statutes, MCL 550.53(7) (“the same health care service”) and MCL 550.1502a(11) (“a service” and “the services”), speak in terms of a service, not a CPT Code. Nor, as set forth in Part I of this article, would such a position be consistent with MCL 500.3475, which is a statute that must be viewed in pari materia (meaning that although not governing, it addresses a similar subject and must be considered) with Act 350 and the Prudent Purchaser Act anti-discrimination provisions and which underscores the notion that in order to protect any specific class of physician, the prohibition against discrimination has to look beyond a CPT Code aligned with a single provider class, or the prohibition is meaningless. 

Importantly, the CPT Codes themselves reject the idea that they are distinct and separate categories of service. The fact of the matter is that CPT Codes can be performed by anyone. It is the nature of the service, not the organization of the CPT Manual, which determines. (See CPT Manual, p. ix, “It is important to recognize that the listing of a service or procedure and its code number in a specific section of this book does not restrict its use to a specific specialty group.”)  Furthermore, the American Chiropractic Association’s 2004 Chiropractic Coding Solutions Manual, page 13, states,

According to the AMA [American Medical Association], “It is important to recognize that the listing of a service or procedure and its code number in a specific section of the CPT code book does not restrict its use to a specific specialty group. Any procedure or service in any section of the CPT code book may be used to designate the services rendered by any qualified physician. Therefore, the osteopathic manipulative treatment codes and the chiropractic manipulative treatment codes can be reported by any physician who is qualified to perform these types of manipulation.  No distinction is made concerning the physician’s licensure or professional credential.  Licensure and credentialing vary on a state-by-state basis.” [Quoting Chiropractic Manipulative treatment, Osteopathic Manipulative Treatment, Physical Therapy, AMA CPT 1997 Coding Symposium November 14, 15, 1996, Chicago, Illinois.]

Nothing more need be said.  The anti-discrimination provisions look to the service (spinal care) and protect against disenfranchising chiropractic physicians on the basis of a system created by the AMA (CPT Codes).

In a case often miscited by the insurance industry for the proposition that chiropractic may be excluded, the Court of Appeals in Cowan v Blue Cross, 166 Mich App 568; 421 NW2d 243 (1988), addressed the Blue Cross PPO (its TRUST Agreement). In Cowan the issue was the TRUST’s exclusion for “nonemergency spinal adjustments except when performed under general anesthesia” (166 Mich App, p 570). Chiropractors could not administer anesthesia, so the by-product was a complete exclusion of chiropractic. The Court addressed a total exclusion for all nonemergency spinal adjustments/manipulations (not just chiropractic, but any such spinal adjustment) and held that: 

“So long as the TRUST makes these de minimis concessions  to chiropractic and limits its coverage provisions so as not to reimburse other classes of physicians for procedures which chiropractors are licensed to perform, plaintiffs have no discrimination claim under the PPA.”  (Emphasis added.)  166 Mich App, p 572.

 There was no de minimis allowance for chiropractic under Healthy Blue: DCs were excluded from physical therapy, traction, massage and spinal adjustments, and that is why it was ordered to be withdrawn or amended. Blue Cross, either under Act 350 or with respect to the PPOs it creates, simply cannot discriminate against chiropractic. The regulation of Blue Cross as an “organization” authorized to create PPOs (preferred provider panels) reaches beyond Blue Cross Traditional and affects its PPOs. The discussion below demonstrates that this regulation also includes Blue Cross PPOs which are established for ERISA plans.

 B. PPOs and ERISA Plans.

It stands to reason that any entity fitting the definition of an “organization” under the Prudent Purchaser Act, MCL 550.52, that wishes to enter into prudent purchaser agreements, must comply with the provisions of that very Act when creating provider panels pursuant thereto. The implication from this simple task of applying the definitions in MCL 550.52 is that when an ERISA plan contracts with another business to act as any of the “organizations” described in MCL 550.52(j), that other business must comply with the Prudent Purchaser Act, even if the ERISA plan itself would be exempt from the Prudent Purchaser Act. In other words, when an ERISA plan contracts with a separate organization (that is, an insurer, dental care corporation, hospital service corporation, medical care corporation, health care corporation, or third-party administrator), the Prudent Purchaser Act may not apply to the ERISA plan because the ERISA plan itself does not enter into the prudent purchaser agreement. Rather, it is the separate organization that is bound to follow the Prudent Purchaser Act if it enters into prudent purchaser agreements with providers. But, an issue arises in that ERISA preempts most state laws and is well known for allowing employers to avoid many state regulations. In a nutshell and without setting forth the complete analysis, however, ERISA will apply to a state law that “relates to” an ERISA plan, but not to a state “insurance” law. Do the provisions of the Prudent Purchaser Act “relate to” an ERISA plan and, if so, are they “saved” from preemption because they constitute “insurance” laws?  That is the legal issue surrounding Blue Cross PPOs for ERISA plans.

The Michigan Court of Appeals addressed whether ERISA preempted the Prudent Purchaser Act in BPS Clinical Laboratories v Blue Cross & Blue Shield of Michigan (On Remand), 217 Mich App 687; 552 NW2d 919 (1997) (BPS [On Remand]).  At issue in BPS (On Remand) was whether BCBS “wrongfully denied” the laboratories “the opportunity to participate” in BCBS’s new health care program it administered for General Motors Corporation under an “‘administrative services only’ contract.” Id. at 691, 692. BCBS, which did not act as an insurer for General Motors, assembled a provider panel consisting of six laboratories, but not including the BPS laboratories. Id. at 692. Because BPS laboratories were not on the provider panel, they would be reimbursed less for the services they rendered. Id. BPS claimed that this exclusion from the provider panel violated the Prudent Purchaser Act, as well as other statutes. Id. BCBS argued that ERISA preempted the Prudent Purchaser Act. Id. at 693.  The trial court disagreed, denying BCBS’s motion for summary disposition. Id. In an earlier opinion, the Court had held that ERISA preempted the laboratories’ claims, reversing the trial court’s decision to deny summary disposition. Id. at 691, 693; see also BPS Clinical Laboratories v Blue Cross & Blue Shield of Michigan, 206 Mich App 570, 578-584; 522 NW2d 793 (1995) (BPS I). After an appeal and remand from the Supreme Court, the Court of appeals did not strictly apply ERISA’s standard analysis, i.e., preemption and savings language noted earlier in this article, as it had done in BPS I, supra at 578-582.  Rather, the Court held that:

[T]he basic thrust of ERISA’s preemption clause was to avoid a multiplicity of regulation in order to permit the nationally uniform administration of employee benefit plans. State laws that force an ERISA plan administrator to modify a benefit plan in order to comply with the laws of a specific state would violate ERISA. [BPS (On Remand), supra at 693.]

To the Court of Appeals, “interference with national uniformity” had become the touchstone for whether a state law violated ERISA. With that principle in mind, the Court noted that the Prudent Purchaser Act was designed to control health care costs in Michigan, that entering into prudent purchaser agreements was a purely voluntary undertaking, and that the Act did not mandate coverage for certain conditions or a minimum amount of coverage for any condition. Accordingly, the Court held that ERISA did not preempt the Prudent Purchaser Act (“PPA”) because “the PPA does not mandate that any other party enter into a prudent purchaser agreement,” the PPA imposed no substantive coverage requirements, and the Court “fail[ed] to see how a statute that applies only to those who choose to fall within its purview could preclude the nationally uniform administration of employee benefit plans.” BPS (On Remand), supra at 694. With Michigan’s state court response in mind, it is more important to turn to the United States Supreme Court in light of the federal law implications. 

The United States Supreme Court has said that a law “relates to” an ERISA plan if the law “has a connection with or reference to such a plan.” Shaw v Delta Air Lines, Inc, 463 US 85, 96-97; 103 S Ct 2890; 77 L Ed 2d 490 (1983). “[A] state law may ‘relate to’ a benefit plan, and thereby be pre-empted, even if the law is not specifically designed to affect such plans, or the effect is indirect,” and even if “a state law is consistent with ERISA’s substantive requirements.” Ingersoll-Rand Co v McClendon, 498 US 133, 139; 111 S Ct 478; 112 L Ed 2d 474 (1990). But not every indirect effect meets the “connection” requirement; there are limits to what can reasonably be said to relate to an ERISA plan. Because the PPA addresses all organizations creating PPOs, it is difficult to imagine that it does not relate to an ERISA plan which has its provider panels determined by a covered organization.

Once it is clear that a law relates to an ERISA plan, either by referring to it or by having a connection to it, the next inquiry is whether ERISA “saves” the state law. As 29 USC 1144(b)(2)(A) states, “Except as provided in subparagraph (B), nothing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities (Emphasis added).” Case law previously employed three factors from the McCarran-Ferguson Act, 15 USC 1 et seq., (which regulates insurance), as “checking points or ‘guideposts’” when determining whether a state law regulates insurance. See UNUM Life Ins Co of America v Ward, 526 US 358, 373-374; 119 S Ct 1380; 143 L Ed 2d 462 (1999), quoting Cisneros v UNUM Life Ins Co of America, 134 F3d 939, 946 (1998). However, the United States Supreme Court’s decision in Kentucky Ass’n of Health Plans, Inc v Miller, 538 US 329; 123 S Ct 1471, 1479 (2003), made a “clean break” from that analysis. Instead, Miller employed a two-part test to determine whether a state law regulates insurance and is, therefore, saved from preemption. “First, the state law must be specifically directed toward entities engaged in insurance. Second, . . . the state law must substantially affect the risk pooling arrangement between the insurer and the insured.” Id. (citations omitted). (3)

The United States Supreme Court noted:

“Petitioners include several health maintenance organizations (HMOs) and a Kentucky-based association of HMOs. In order to control the quality and cost of health-care delivery, these HMOs have contracted with selected doctors, hospitals, and other health-care providers to create exclusive “provider networks.” Providers in such networks agree to render health-care services to the HMOs’ subscribers at discounted rates and to comply with other contractual requirements. In return, they receive the benefit of patient volume higher than that achieved by nonnetwork providers who lack access to petitioners' subscribers. 

Kentucky's AWP [any willing provider] statutes impair petitioners’ ability to limit the number of providers with access to their networks, and thus their ability to use the assurance of high patient volume as the quid pro quo for the discounted rates that network membership entails. Petitioners believe that AWP laws will frustrate their efforts at cost and quality control, and will ultimately deny consumers the benefit of their cost-reducing arrangements with providers.” [Miller, supra at 1474.]

In addressing Kentucky’s AWP statutes, the U.S. Supreme Court did not analyze whether the statutes “related to” an ERISA plan. Miller, supra at 1475. Rather, it implicitly concluded that the AWP statutes did relate to an ERISA plan. This is why the first issue the Court considered was “whether Kentucky’s AWP statutes are saved from preemption,” which turned on whether they regulated insurance. Id. 

To illustrate how Kentucky’s AWP statutes regulated insurance, the Supreme Court used an analogy:

Suppose a state law required all licensed attorneys to participate in 10 hours of continuing legal education (CLE) each year. This statute “regulates” the practice of law--even though sitting through 10 hours of CLE classes does not constitute the practice of law--because the state has conditioned the right to practice law on certain requirements, which substantially affect the product delivered by lawyers to their clients. Kentucky’s AWP laws operate in a similar manner with respect to the insurance industry: Those who wish to provide health insurance in Kentucky (any “health insurer”) may not discriminate against any willing provider. This “regulates” insurance by imposing conditions on the right to engage in the business of insurance; whether or not an HMO’s contracts with providers constitute “the business of insurance” under Royal Drug is beside the point. [Miller, supra at 1477 (emphasis in the original).]

Not every “condition” on the right to engage in the business of insurance would constitute the regulation of insurance within the meaning of ERISA’s savings clause. Id. Instead, the Supreme Court explained, “conditions on the right to engage in the business of insurance must also substantially affect the risk pooling arrangement between the insurer and the insured.” Id. Consequently, to be saved from preemption under the insurance regulation exception in 29 USC 1144(b)(2)(A), a state law “must be specifically directed toward entities engaged in insurance,” and “the state law must substantially affect the risk pooling arrangement between the insurer and the insured.” Id. at 1479. 

In this case, the Supreme Court concluded that Kentucky’s statutes did regulate insurance. Further, “[b]y expanding the number of providers from whom an insured may receive health services, AWP laws alter the scope of permissible bargains between insurers and the insureds.” Miller, supra at 1478. In this way, the statutes substantially affected the risk pooling arrangement. Therefore, the statutes were saved from preemption. Id. The Supreme Court did not engage in a full analysis of the Kentucky statutes under the deemer clause because the statutes included an express provision that exempted self-insured ERISA plans. Id. at 1476, n 1.

To the extent that BPS (On Remand) left any doubt about whether the Prudent Purchaser Act is saved from preemption under ERISA, Miller clarifies that it, and the equivalent of an AWP statute in MCL 550.53(7), is saved. Assuming that the Prudent Purchaser Act relates to ERISA plans at all, it passes Miller’s two-part test for the savings clause, 29 USC 1144(b)(2)(A). Under MCL 550.52 et seq, an “organization” specifically contemplates entities engaged in insurance, naming “insurers” and “health care corporations,” which includes Blue Cross or any TPA organizing PPOs, among the different entities that qualify as “organizations” subject to the act. MCL 550.52(j). It is undeniable that MCL 550.53(7) substantially affects the risk-pooling arrangement between the insurer and the insured. Just as the Supreme Court observed with respect to the Kentucky AWP statutes, so, too, does MCL 550.53(7) increase the aggregate number of providers available to insureds, as well as the classes of providers available to render services to insureds. Further, aside from the small distinction in the language regarding the right to “apply” in MCL 550.53(7), the Kentucky statutes at issue in Miller and MCL 550.53(7) adopt very similar language. 

C. Conclusion

The purpose of Part II of this article is to demonstrate that many plans seek to exclude chiropractic. Part I of this article demonstrated that indemnity policies and HMOs may not exclude chiropractic if they provide for manipulative and physical medicine services for the spine. This installment reveals that PPOs and even ERISA plans may not ignore the Michigan Legislature’s anti-discrimination mandate and attempt to improperly exclude chiropractic physicians from rendering covered services within the scope of chiropractic. So long as spinal care is covered by virtually every major medical policy in the country, and will likely continue to be covered inasmuch as back injury is the most prevalent injury in America precluding people from being able to continue working, these policies must allow chiropractic physicians to participate. 

Equal Treatment: The Legal Basis for Demanding Equal Treatment of Chiropractic (Part I)

By:       MAC Attorney Kevin Moody, Esq.

Introduction

Over the past ten years, the Chiropractic Trade Associations have fought many battles designed to obtain equal treatment. By equal treatment, all that is meant is that, if a service is reimbursable under a certificate of insurance, and that service is one within the scope of chiropractic, then the insurance certificate must also reimburse the chiropractic physician who performs the service. This is the first in a multi-article set discussing the main areas of protection in the law. In this volume, the anti-discrimination provisions applicable to health maintenance organizations and indemnity insurance policies will be discussed. In a subsequent volume, the discussion will turn to Act 350 and Blue Cross, as well as anti-discrimination provisions contained in the Prudent Purchaser Act.

Evolution of the HMO Act

The Public Health Code as adopted in 1978 regulated HMOs and provided for three distinct types of services: primary, basic and supplemental health services, each to be introduced in a specified progression. Michigan Compiled Laws 333.21034(d) stated:

“The department, with the concurrence of the insurance bureau, shall issue a license to a health maintenance organization upon being satisfied that:

 (d) The proposed health maintenance contracts to be issued by the health maintenance organization include, as a minimum, the primary health maintenance services specified in section 21007(1) during the period for which the initial license will be issued, and the contracts issued or in effect after the date of the first renewal of the license shall include, as a minimum, the basic health services specified in section 21003. Three years after the initial license is issued, an organization shall offer the supplemental health services specified in section 21009 as separate or combined options to subscribers for such additional payment as the organization requires. This requirement shall be waived if the organization demonstrates, to the satisfaction of the department and the insurance bureau, that provision of supplemental health benefits under this section would tend to endanger the financial stability of the organization, that personnel or other resources are not available in the area served by the organization to adequately provide the services, or that the option would not be exercised by enough subscribers to justify economically its provision…(Emphasis added.)

This three-step progression obviously meant that not all health maintenance services would be treated the same. Importantly for chiropractors, the term “supplemental health services” was defined to include chiropractic services.  Michigan Compiled Laws 333.21008(2), provided as follows:

“(2) ‘Supplemental health services’ means:

(a)    “Services of licensed facilities for intermediate and long-term care.

(b)   “Vision care, including optometric services.

(c)    “Dental services.

(d)   “Mental health services not included in basic health services.

(e)    “Long-term physical medicine and rehabilitative services including physical therapy

(f)     “Clinical pharmacy services or prescription drugs prescribed in the course of providing basic health services or a service described in section 21007 or this section.

(g)    “Chiropractic services.”  (Emphasis added.)

Thus, under section 21034(d), chiropractic services were considered supplemental health services that HMOs were obligated to provide three years after the initial license was issued. Indeed, the Attorney General held as much in 1979 OAG 5503, p. 223, issued on July 5, 1979, wherein he opined that under the original language enacted by 1978 PA 368, chiropractic services were mandatory after three years. The Attorney General added that this requirement could not be fulfilled by having subscribers seek services from doctors of medicine or doctors of osteopathic medicine. In other words, chiropractic services were recognized as distinct and, at the appropriate time established in § 21034, had to be provided along with primary and basic services.

As a result of 1979 OAG 5503, however, the Legislature enacted 1982 PA 354, which deleted the requirement to provide supplemental health services.  As amended, MCLA 333.21034(d) read as follows:

(d) The proposed health maintenance contracts to be issued by the health maintenance organization include, as a minimum, the primary health maintenance services specified in section 21007(1) during the period for which the initial license will be issued, and the contracts issued or in effect after the date of the first renewal of the license shall include, as a minimum, the basic health services specified in section 21003.

As is self-evident, the Legislature simply deleted the reference to supplemental health services within § 21034’s recitation of required services and deleted § 21008(2) altogether. The legislative analysis of 1982 PA 354 expressly stated, “supplemental services include… chiropractic service… The bill would eliminate the requirement that HMOs provide supplemental health services.”  (Id., pp. 2-3).

Beginning in 1982, the Public Health Code, which initially required three different groups of health maintenance services with each group being phased in at a different time period, was amended to require only two groups of health maintenance services, with the third group being deleted along with the requirement that chiropractic services be provided. In neither of these first two versions of health maintenance services, moreover, was there any application of the Insurance Code’s non-discrimination provisions, or any provision dealing with equal access to each class of provider qualified to perform a particular health maintenance service. Public Act 252 of 2000, effective June 29, 2000, changed all that.

The “New” HMO Act

A.  Background Principles.

It is well settled that “an amendment is generally construed as changing the meaning of the statute,” People v Price, 124 Mich App 717, 721 (1983), and that “when the Legislature adopts an amendment to a statute, it is presumed that the Legislature intended to make some change.” English v Saginaw County Treasurer, 81 Mich App 626, 631 (1978). Additionally, the provisions of a statute (here, the Insurance Code) must be viewed and construed as a harmonious whole, not with each provision isolated one from the other. AFSCME v Oakland County, 409 Mich 299 (1980); Delta County v Dept of Natural Resources, 118 Mich App 458, 462 (1982).  “Rules of statutory construction also require that force and meaning be given to every word and clause in a statute.” Herp v. Lansing City Clerk, 164 Mich App 150, 157 (1987). Finally, where the language of a statute is clear and unambiguous, the court must apply it as written and not alter its plain meaning. Owendale-Gagetown School Dist v State Board of Education, 413 Mich 1, 8 (1982). With these principles in mind, the conclusion is inescapable that the Legislature intended to treat classes of providers fairly and equally and that if a particular health maintenance service was provided, each provider authorized to deliver such service was to be given the opportunity to affiliate with the HMO.

B.  Analysis of Act 252.

Under Act 252, HMOs must provide “basic health maintenance services”, MCLA 500.3501(e), and “may provide additional health maintenance services or any other related health care service.” MCLA 500.3515(1). This provision existed in the prior act (§21053(5)). But, under Act 252, the “Commissioner shall encourage health maintenance organizations to utilize a wide variety of health-related disciplines and facilities and to develop services that contribute to the prevention of disease and disability and to the restoration of health.” MCLA 500.3513(1). It is clear that Act 252 seeks to expand services to the extent possible. See also MCLA 500.3515(1). 

Once the HMO has determined what health maintenance services (“services provided to enrollees of the health maintenance organization under their health maintenance contract”) it will provide, it “shall maintain contracts with those numbers and those types of affiliated providers that are sufficient to assure that covered services are available to its enrollees without unreasonable delay.” MCLA 500.3530(1). Section 3530 further describes the considerations that the HMO may utilize, including provider/covered person ratios by specialty, primary care provider/covered person ratios and other things. Obviously, Section 3530 envisions that primary care providers and specialists will be utilized and Act 252, generally, contemplates utilization of a wide range of provider classes.

Significantly, Act 252 abandoned the prior notion of “primary health maintenance services” (from 1978 PA 368), and “supplemental health services” (deleted by 1982 PA 354) were not separated out, added or in any fashion delineated. Thus, Act 252 contains no phase-in of health maintenance services. Rather, HMOs must provide basic health maintenance services and may provide any “health maintenance service”; and, from both the language of Act 252 and the legislative analyses, it is clear that the Legislature sought to treat HMOs more like health insurers and to impose certain non-discrimination provisions onto them rather than delineate expressly required services. A May 30, 2000 First Analysis, from the House Legislative Analysis Section, revealed that at the time “all other health care plans and health insurers are regulated by the [Office of Financial and Insurance Services]. Though the different types of health plans and carriers offer similar services and assume the same types of risks, HMOs are not treated in the same way as the other plans.” (Id., p. 1.) The legislation “would restructure the regulations of HMOs, making them consistent with regulations that apply to the rest of the State’s regulated health plans.” (Emphasis added.) (Id., p. 3.) 

Similarly, an analysis performed by the Senate Fiscal Agency, dated August 17, 2000, stated that “all of the provisions of the Insurance Code that apply to a domestic insurer authorized to issue an expense-incurred hospital, medical, or surgical policy or certificate also apply to an HMO under Chapter 35 unless specifically excluded, or unless otherwise provided for in Chapter 35.” (Analysis, p. 1.) The analysis makes it clear that these provisions are “provisions in Chapter 35 that were not in Part 210, or that are different from previous provisions.” (Id.) The text of Act 252 provides in unmistakable terms that:

“All of the provisions of this Act that apply to a domestic insurer authorized to issue an expense-incurred hospital, medical, or surgical policy or certificate, including, but not limited to, Sec. 223 and Chapters 34 and 36, apply to a health maintenance organization under this chapter unless specifically excluded…”.  (Emphasis added.)  MCLA 500.3503. 

This very significant change, in particular the imposition of Chapter 34 requirements upon HMOs, along with other specifically enumerated provisions of Act 252, instructs that the Legislature intended to adopt for HMOs the same type of nondiscrimination among classes of providers that has already existed for domestic insurers (MCLA 500.3475), nonprofit health care corporations (MCLA 550.1502)(3)) and preferred provider organizations (MCLA 550.1502a(11)). Specifically, the applicability of §3475, which directly addresses chiropractic and prohibits discrimination against chiropractic, requires that chiropractors be given the opportunity to affiliate with HMOs if the HMO provides services that a chiropractor is legally authorized to perform. Though the prior HMO Act contained a nondiscrimination provision (§21053), § 3475 was not a part of the prior HMO regulatory scheme and chiropractic was expressly designated as a tier 3 (“supplemental”) benefit  -- at one time required, but then expressly deleted from the requirement. Section 3475’s recognition of chiropractic, now a part of Act 252, may “not be supposed to have no purpose”. Herp, supra, p. 159.

In this connection, § 3475, states as follows:

Sec. 3475.  Notwithstanding any provision of any policy of insurance or certificate, if an insurance policy or certificate provides for reimbursement for any service which may be legally performed by a person fully licensed as a psychologist under part 182 of the public health code, Act No. 368 of the Public Acts of 1978, being sections 333.18201 to 333.18237 of the Michigan Compiled Laws; by a podiatrist licensed under part 180 of the public health code, Act No. 368 of the Public Acts of 1978, being sections 333.18001 to 333.18033 of the Michigan Compiled Laws; by a chiropractor licensed under part 164 of the public health code, Act No. 368 of the Public Acts of 1978, being sections 333.16401 to 333.16431 of the Michigan Compiled Laws; reimbursement under the insurance policy or certificate shall not be denied if the service is rendered by a person fully licensed as a psychologist under part 182 of the public health code, Act No. 368 of the Public Acts of 1978; by a podiatrist licensed under part 180 of the public health code, Act No. 368 of the Public Acts of 1978; or by a chiropractor licensed under part 164 of the public health code, Act No. 368 of the Public Acts of 1978; within the statutory provisions provided in his or her individual practice act.  This section shall not be construed as requiring the coverage for a psychologist in any insurance policy.  This section shall not apply to a policy or certificate written pursuant to section 3405, 3631, or 3709 involving a prudent purchaser agreement.

Section 3475, as can be seen, specifically addresses chiropractic and requires, notwithstanding any policy to the contrary, that any service which is provided under any policy of insurance or certificate which can be performed by a chiropractor must be reimbursed if so provided by a chiropractor. These provisions have been expressly engrafted onto the HMO legislation by §3503 and require that chiropractic services be included if the service is performed by some other provider. In all cases, this is the clear intent of the Legislature when §§ 3475, 3529 and 3531 are construed together. Section 3531(3) requires that all persons eligible to perform a service be given the opportunity to apply to the HMO; and, § 3529(1) precludes discrimination on the basis of the class of health professional. What this means is that applications to join an HMO must be provided to chiropractors and they must be given non-discriminatory treatment. A brief review of the foregoing Chapter 35 protections underscores the impact of §3475.

To begin, Section 3529 (formerly § 21053(4)), which states that an HMO may contract with any health professional as it deems appropriate, “but shall not discriminate solely on the basis of the class of health professionals to which the health professional belongs,” MCLA 500.3529, has added significance for chiropractic in light of §3475. A statute must be construed as a harmonious whole. Delta County, supra.  Section 3475 evinces a legislative intent that the prohibition against discrimination in §3529 applies equally to chiropractic. 

Moreover, Section 3531 continued a significant provision from the prior nondiscrimination policy contained in § 21053c.  It states in pertinent part:

“Sec. 3531.  (1) This section applies if a health maintenance organization contracts with health care providers to become affiliated providers or offers a prudent purchaser contract.

(2) A health maintenance organization may enter into a contract with 1 or more health care providers to control health care costs, assure appropriate utilization of health maintenance services, and maintain quality of health care. The health maintenance organization may limit the number of contracts entered into under this section if the number of contracts is sufficient to assure reasonable levels of access to health maintenance services for recipients of those services. The number of contracts authorized by this section that are necessary to assure reasonable levels of access to health maintenance services for recipients shall be determined by the health maintenance organization as approved by the commissioner under this chapter. However, the health maintenance organization shall offer a contract, comparable to those contracts entered into with other affiliated providers, to at least 1 health care provider that provides the applicable health maintenance services and is located within a reasonable distance from the recipients of those health maintenance services, if a health care provider that provides the applicable health maintenance services is located within that reasonable distance.

            (3) A health maintenance organization shall give all health care providers that provide the applicable health maintenance services and are located in the geographic area served by the health maintenance organization an opportunity to apply to the health maintenance organization to become an affiliated provider.  *  *  *  (Emphasis added.)

MCLA 500.3531.  As it relates to § 3531, an “affiliated provider” is one who is a health professional “having a contract with the health maintenance organization to render one or more health maintenance services to an enrollee”. MCLA 500.3501(a). As with § 3529, this provision has new significance for chiropractic in that Act 252’s adoption of Chapter 34 protections is an express extension of the nondiscrimination policy to chiropractic; and the decision not to separately address “supplemental health services” expresses an intention that chiropractic not be separated out from other health services. The preceding statutory provisions are clear on their face and must be given effect. Owendale-Gagetown, supra. And, because the enactment of Act 252 is presumed to change the law, English, supra, p. 631, it is clear that Act 252, contrary to the original Public Health Code provisions or 1982 PA 354, sought to preclude discrimination against chiropractic. 

If the clear language of the statutes set forth above were not enough, opinions of the Attorney General and case law support the conclusion that the imposition of non-discrimination provisions on HMOs requires inclusion of chiropractors so long as the HMOs provide medical care for back injuries or for any service which a chiropractor may legally perform. In 1994 OAG No. 6797 (May 13, 1994), the Attorney General’s Office again reaffirmed the non-discrimination concept.  In construing §3475, the Attorney General indicated that:

The Legislature has provided, in plain and unambiguous language, that an insurer may not deny reimbursement to a chiropractor who performs a service covered by the insurance policy that is within the scope of chiropractic practice permitted by law. When the language of a statute is clear and unambiguous, no additional interpretation is necessary. Owendale-Gagetown School District v State Bd of Education, 413 Mich 1, 8; 317 NW2d 529 (1982). This result is consistent with the result reached in OAG, 1989-1990, No 6621, p 179, 181-182 (July 13, 1989), which concluded that chiropractors must be reimbursed from Blue Cross and Blue Shield of Michigan for those services that they are licensed to perform and that are covered by the applicable insurance policy.

It is my opinion, therefore, that an insurer may not refuse to provide reimbursement for a service which may be legally performed by a licensed chiropractor if that service is reimbursable for other providers under the applicable insurance policy.

Although §3475 addresses indemnity contracts, and not HMO contracts, none of Chapter 34 was initially drafted to address HMOs.  Instead, §3503’s incorporation of Chapter 34 made the substance of Chapter 34 applicable to HMOs. Courts will not assume that the Legislature acted without purpose or intended an absurd result. Andrews v Branigan, 21 Mich App 568 (1970); Herp, supra. The applicability of § 3475 as a result of Act 252, along with the prior non-discrimination language of § 3529 and the additional language of § 3531, requires the offering of HMO affiliation to chiropractors if an HMO covers spinal subluxations and misalignments.

Conclusion

Suffice it to say that §3475 expressly prohibits discrimination against chiropractors. For the past seven years, it has been a part of the HMO regulatory scheme. Additionally, the Act 252 HMO language does not delineate between “primary health maintenance services”, “basic health maintenance services” and “supplemental health services.” The existence of “supplemental health services” under the old HMO legislation made it clear that the Legislature chose to deal with chiropractic in a separate manner. The deletion of reference to any primary services and to any supplemental services, along with the incorporation of § 3475, evidences an intention to include chiropractic, if the HMO provides “health maintenance services” which include relief to spinal subluxations and misalignments. If the HMO provides health maintenance services “that may be legally performed by a licensed chiropractor”, OAG 6797, supra, then chiropractors must be offered a chance to become affiliated with the HMO.

January 18, 2008

Big Wins in Fight Against Insurance Discrimination

The MAC Board of Directors and Legal Affairs and Insurance Committees are committed to taking aggressive legal action against any and all health plans that unlawfully discriminate against doctors of chiropractic and their patients. As a result of this aggressive legal action, the MAC recently secured two critical, hard-fought victories.

Healthy Blue: In early July, Michigan Insurance Commissioner Linda Watters declared Blue Cross Blue Shield of Michigan’s (BCBSM) Healthy Blue insurance options unlawful and ordered BCBSM to withdraw them from the market. The Healthy Blue policies excluded doctors of chiropractic from performing physical medicine modalities and other services within Michigan’s chiropractic scope of practice. Michigan law authorizes the Commissioner to disapprove any certificate that contains provisions that are “unjust, unfair, inequitable, misleading, deceptive, or which encourage misrepresentation of the coverage.” The Commissioner ruled that a certificate that discriminates against a class of health care providers is “unfair” under this law.

In other words, once BCBSM offers coverage for a particular medical service, it may not exclude a class of providers from being paid for that service, so long as the provider is authorized by law and professional license to administer that service.

Further, the commissioner noted that Blue Cross may not exclude spinal manipulative therapy from their coverages unless the exclusion is equally applied to all provider groups. In other words, policies cannot discriminate against one provider group while allowing other providers to perform the excluded service.

Finally, the Commissioner stated that, to the extent DCs are permitted by scope and licensure to perform physical therapy, they must be treated in the same manner as other providers authorized to provide physical therapy.

Priority Health: Negotiations with Priority Health have resulted in an extremely positive proposal for future Priority Health policy language. Priority Health entered into negotiations with the MAC after we filed a discrimination complaint several months ago.

The new policy language would allow for 30 physical, occupational, chiropractic and osteopathic visits (to be called physical medicine procedures); 30 speech therapy visits; and 30 combined cardiac rehabilitation and pulmonary rehabilitation visits. These benefits would be available in all Priority Health policies (PPO, HMO), and riders would be available for additional coverage (visits). Evaluation & Management services and x-rays would not be limited by the 30 procedures, and chiropractic services would not require a referral or pre-authorization.

All allowable physical and occupational therapy, including services provided within the scope of practice of osteopathic physicians and chiropractic physicians (including spinal manipulation), for treatment of medical diagnoses would be covered if due to an injury, illness or a congenital defect. Additionally, co-payments would be equally applied on all like services, and only one co-pay would apply to each visit, whether that visit includes only an E&M, only a manipulation, or both.

Priority Health has also agreed that their network enrollment would be significantly opened up and MAC would provide input and oversight to the process. They have also asked for MAC assistance with all aspects of utilization review, and the possibility of joining together in a future “study” is being discussed. It is expected this new language will go into effect in January 2008.

Other Insurers

Blue Care Network: As a result of a meeting with the MAC, BCN did make some initial improvements in parts of their network. However, serious issues remain, including an insufficient network statewide, referral requirements, and discriminatory language in BCN communications. We have requested these issues be immediately resolved or we will file a formal complaint with the Insurance Commissioner.

While these victories are extremely important, they are just the first step. Some even bigger wins are on the horizon. We will continue to explore every option in ending discrimination against chiropractic in all health plans. Our dedicated membership, committed leaders, and expert attorney, Kevin Moody, are making these victories possible.

Other Legal Matters

Patient Advocacy Group: MAC PR consultant Joe Ross of Communications & Research has been working to revamp the Patient Advocacy Group (PAG). The PAG is patient-driven, and we hope to gain up to 50,000 members.