Michigan Supreme Court Lansing, Michigan

Chief Justice: Justices: Clifford W. Taylor Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly 

# Opinion

Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

FILED APRIL 23, 2008 DESIREE E. ROSS, Personal Representative of the Estate of DOUGLAS G. ROSS, Petitioner-Appellee,

v No. 131711
BLUE CARE NETWOR K OF MICHIGAN, Respondent-Appellant.

BEFORE THE ENTIRE BENCH TAYLOR, C. J. At issue in this action brought pur suant to the Patient’s Right to Independent Review Act (PRIRA), MCL 550.1901 et seq. , is whether the Commissioner of the Office of Financ ial and Insurance Services (OFIS) 1 is bound by the recommendations of an independent review organization (IRO) on issues of medical necessity and clinical review. We conclude that the act provides that the commissioner is not bound by such recommendations . Accordingly, we reverse

1 OFIS is now the Office of Financ ial and Insurance Regulation, effective April 6, 2008. Execu tive Order No. 2008-2.the judgment of the Court of Appeals and the ord er of the trial court that held to the contrary and remand this matter to th e trial court for further proceedings consistent with this opinion.
I. FACTUAL BACKGROUND AN D PROCEDURAL POSTURE Douglas Ross was covered under the health maintenance organization (HMO) health plan of respon dent Blue Care Network of Michigan (BCN). The certificate of coverage ex cluded out-of-network s ervices that were not preauthorized. 2 However, it did provi de coverage for medically necessary services without prior authorizati on in cases of immediate and unforeseen medical emergency, but only until such time as it became medically feasible to transfer the person covered under th e health plan to an in-network provider. 3

2 Section 2.01 of the certificate provided: The Health Plan is not an insurance co mpany but a health maintenance organizati on which operates on a di rect service basis. Health, medical, hospital, and oth er services obtained by a Member outside of the Health Plan and not pre-authorized by a Plan Physician are not a covered benefit under this Certificate and cannot be reimbursed to the Member or paid for by the Health Plan. 3 Section 1.05 of the certificate provided: A. . . . Coverage is provide d for medically necessary emergency services wh en they are needed im mediately because of an accidental injury or sudden illness, and the time required to contact your Primary Care Physic ian could result in permanent damage to your health. All benef its under this Certificate must be provided or authorized by your Primary Care Physician or BCN, except in the case of an imme diate and unforeseen medical emergency. * * * (continued...)

2In March 2002, Ross contract ed an acute form of mu ltiple myeloma. Ross was referred to the University of Michigan Medical Center, an in-network provider, which in a May 28, 2002, letter recommended to Dr. Stephen Goldfarb, one of Ross’s oncologists, th at Ross receive a stem-cell t ransplant and advised that it had given Ross informati on on bone-marrow transplant s and instructed Ross to discuss this option with Dr. Goldfarb. Acco rding to Desiree Ross (petitioner), who is Ross’s wife and the personal repres entative of his estate, Ross’s condition began to spiral out of control toward th e end of June 2002, Ross’s oncologist told him that he was no longer eligible for t reatment at the University of Michigan Medical Center because the cancer had sp read to his soft ti ssue, and Ross was consigned to palliative treatment. She also claimed that Dr. Ronald Lutsic, a radiation oncologist, told h er in June 2002 that Ross’ s prognosis was dismal and that if he were Ross, he would go to the Myeloma Institute in Little Rock,

(...continued) 2. Medical Emergency means a sudden and immediate medical condition which could be expected to resu lt in permanent damage to your health if not treated immediately. * * * C. All follow-up care to initial emergency treatment . . . is covered only when pr ovided or approved by BCN or by your Primary Care Physician. D. If a Member is hospitalized for emergency care in a non

affiliated hospital or outside of the BCN service area, BCN may require that the Member be trans ferred to an affiliated hospital or (continued...)

3Arkansas (the facility), one of two facilitie s in the world that treated multiple myeloma. Petitioner called Ross’s primary care physician (PCP), Dr. Michael Silverstone, to ask for a referral to the facility, which was not a BCN in-network provider. BCN advised that it needed to review the fa cility’s treatment plan and that it would take 10 to 14 days to review the request . The facility said that it could not provide a treatment plan without first evaluating Ross. On July 2, 2002, Ross went to Arka nsas and began an evaluation at the facility without BCN’s approva l. On July 8, 2002, Dr. Frits van Rhee, the evaluating doctor, admitted Ross to the ho spital, noting that without aggressive intervention, Ross had only about seven da ys to live. Ross was hospitalized from July 8, 2002, to July 23, 2002. The July 23, 2002, discharge summary indicated that Ross was “stable for discharge and outpatient followup . . . .” In the meantime, Ross had received no tices from BCN on July 9, July 15, and July 16 denying coverage for treatment at the facility because either the services were available in-network or there was no referral from his PCP, and advising Ross to contact his PCP for a referral to an in-network provider. Although petitioner claime d that BCN never info rmed her of any in

network providers that could treat Ross’s condition, she did not indicate that she

(...continued) other facility with in the service area as soon as medically feasible

. [Emphasis added.]

4had contacted Ross’s PCP as advised by BCN for such a referral , and she did not present any evidence that the University of Michig an Medical Center was unable to administer the same treatment Ross received at the facility. Ross continued with both outpatient an d inpatient treatment at the facility w ithout BCN’s authorization until March 2003. He died on April 6, 2003. BCN refused to cover any evaluation or treatment at the facility. On December 18, 2 002, pursuant to BCN’s int ernal procedures, petitioner initiated a “step one” appeal of the denial of coverage for Ross’s treatment at the facility that had begun on June 30, 2002. BCN denied the appeal on January 9, 2003, because (1) the PCP had not referred Ross, (2) BCN had not authorized the services and there was no indication that the services were not available in

network, and (3) BCN consid ered the facility’s services to be experimental. On February 6, 2003, petitioner filed a “step two” int ernal appeal, whic h BCN denied. On April 28, 2003, petition er appealed to OFIS und er PRIRA. The commissioner accepted the request and assign ed the case to an IRO. The IRO’s initial report, dated May 16, 2003, indicated that “this must be considered an emergency evaluation and admission in the mi nd of a prudent patient,” that attempts were made to us e in-network providers , that Ross was not offered a reasonable alternative plan of care that would address his condition, and that the treatment he received at the fac ility should not have been considered experimental. After receiving the initia l report, the commi ssioner repeatedly sought to compel the IRO to apply the contractual and statutory standards rather

5than the IRO-imposed prudent-patient standard for evalua ting an emergency, 4

4 We quote here one of the questions in the commissi oner’s October 2004 request for clarification of the IRO’s recommendation and th e IRO’s November 2004 response to that qu estion as just one exampl e of how the commissioner repeatedly sought to compel the IRO to apply the st atutory standards and how the IRO unwarrantedly dec lined to do so: [ Q .] Michigan law requires cov erage for emergen cy treatment up to the point of stabilization. At what point after Mr. Ross’ admission on July 8, 2002 was he stabilized. Dr. VanRhee, the admitting and treating physician st ated Mr. Ross began DT PACE chemotherapy on July 10, 2002 and within 7 days Myeloma was back under control. Can it be a ssumed that Mr. Ross was stable by July 18, 2002? [ A .] The patient subsequently developed severe and life

threatening complications of hi s disease process, requiring admission to the University of Ar kansas Medical Center July 8, 2002. Blue Care Network’s policy on Emergency Care Section 1.04 D. [sic] states, “If a Member is hos pitalized for em ergency care in a nonaffiliated hospital or outside of the BCN service area, BCN may require that the member be trans ferred to an affiliated hospital or other facility within the servi ces area as soon as medically feasible.[”] It is the opinion of this reviewer that it was not medically feasible or appropriate to transfer the enrollee to another facility, which was not involved w ith the patient’s course of treatment. It would have been in appropriate to attempt to transfer the patient across the co untry for treatment at a network facility at any time during his July 8 - July 23, 2002 inpatient admission episode. He required treatment for his condition at a center that was familiar with his cond ition under the supervision of his treating physician. This reviewer does not have ad equate clinical information about the August 1 - August 2, 2002 inpatient admission; therefore, no decision can be rendered regarding this episode. (continued...)

6sending the IRO three requests for clari fication whether th e June 30, 2002, outpatient consulta tion, the July 8, 2002, to July 23, 2002, inpatient admission, the August 1, 2002, to August 2, 2002, inpatient admission, and the September 9, 2002, to November 17, 2002, follow-up testing constitu ted emergency care, which would be covered under the certificat e of coverage, as well as under MCL

(...continued) The follow-up testing was to evalua te the health of the patient and the effectiveness of the treatment given to this patient. This reviewer does not have the specifics as to the care provided, but it would be inappropriate to “trans fer” this responsibility to another facility, which was not involved wi th this patient’s course of treatment. It is the opinion of this reviewer that it is inappropriate to unbundle the care provided to this patient for his refractory myeloma and that it is appropriate to look at the global care provided for this illness. Given the sense of emerg ency and life-threatening nature of the patient’s condition without effec tive therapy, the care, provided at the University of Arkansas Medical Center, was appropriate treatment. When viewing the question and the answer in its entirety, it is clear that the IRO’s statement that “it was not medical ly feasible or appropriate to transfer [Ross] to another facility” referred to the July 8, 2 002, to July 23, 2002, admission, while the remainder of the IR O’s answer addressed the subsequent periods of treatment. The IRO did not indicate with res pect to thes e subsequent periods that transfer wo uld have been medically infeasible; rather, the IRO indicated only that it woul d have been inappropriate to transfer Ross to another facility. Justice Kelly argues, post at 13 n 23: “Given that the IRO is made up of doctors, not lawyers, it is not surprising th at [the IRO] did no t use the legalistic language that the majority is looking for. ” In response, we note that the term “medically feasible” used in the certificate of coverage was not defined in such a manner that a doctor, who has extensive e ducation, would be una ble to understand or apply the term. Moreover, the IR O demonstrated in its November 2004 response that the IRO’s physician reviewer was perfectly capable of using the term “medically feasible” and appl ying, even citing, the lan guage in BCN’s certificate when the reviewer deemed it appropriate to do so.

7500.3406k, 5 and whether Ross became stabilized at any poin t so as to make it medically feasible to transfer him to an in-n etwork facility. The IRO responded that Ross was admitte d to the facility on an emergency basis and that it was not appropriate to transfer him to an in -network facility for treatment or follow-up because the in-net work facility was not involved in Ross’s treatment. In the IRO’s last two respons es, it stated that it was not medically feasible to transfer Ross from July 8, 2002 , to July 23, 2002 , and that it was

5 MCL 500.3406k of the Insurance Code provides that an HMO must, if it provides a certificate of medical coverage, cover emergen cy medical services until the insured is st abilized and defines “stabilization”: (1) . . . [A] health maintenance organization contract shall provide coverage for medi cally necessary servi ces provided to an insured for the s udden onset of a medical condition that manifests itself by signs and symptoms of suffici ent severity . . . such that the absence of immediate medical attention coul d reasonably be expected to result in se rious jeopardy to the individual’s health . . . , serious impairment to bodily func tions, or serious dysfunction of any bodily organ or part. An insur er shall not require a physician to transfer a patient before the physicia n determines that the patient has reached the point of stab ilization. An insurer shall not deny payment for emergency health services up to the point of stabilization provided to an insured under this subsection b ecause of either of the following: (a) The final diagnosis. (b) Prior authorization was no t given by the insurer before emergency health serv ices were provided. (2) As used in this section, “s tabilization” means the point at which no material deterioration of a condition is likely, within reasonable medical probability, to result from or occur during transfer of the patient.

8inappropriate to unbundle the remaining care provided . The only time the IRO stated that it was not medically feasible to transfer Ross was in response to the commissioner’s question regarding the July 8, 2002, to July 23, 2002 , admission. The IRO recommended on three separate o ccasions that BCN’s denial of petitioner’s claim be overturned. The commissioner found that only the inpatient admission to the facility from July 8, 2002 , to July 23, 2002, wa s a medical emergency under the definition of “emergency care” in BCN’s health plan. She upheld the denial regarding the remainder of the services on the grounds that (1) out-of-networ k services were not covered; (2) BCN did not a pprove the out-of-n etwork services; (3) there was no evidence that treatment was unavailable with in the network, given that Ross’s PCP had referred him to the University of Michigan Medical Center, a multidisciplinary cancer treatment center; and (4) othe r than the July 8, 2002, to July 23, 2002, hospitalization, the care was not emergency care under the policy or Michigan law. Petitioner appealed the commissioner’s decision in the circuit court, arguing alternatively (1) that it was not me dically feasible to transfer Ross to an in-network facility becau se of the emergency nature of his conditio n; (2) that Ross had a referral from his PCP, so the services did not need to constitute emergency medical care; and (3) that the services w ere not available in-network. Focusing on the argument that the servi ces were emergency services, the circuit court reversed the part of the co mmissioner’s decision that upheld BCN’s denial of coverage,

9reasoning that the commissioner’s conclusion—that some but not all of the facility’s services were em ergency services—was unauthorized by law. The Court of Appeals granted BCN’s ap plication for leave to appeal and affirmed with respect to the services prov ided through Nove mber 17, 2002. Ross v Blue Care Network of Michigan, 271 Mich App 358; 722 NW2d 223 (2006). It reasoned that the commissioner had failed to comply with the requirements of PRIRA and exceeded her au thority when she disco unted the IRO’s medical recommendations and replaced them with h er own independent determinations. Id. at 371. The panel concluded that the statement in English v Blue Cross Blue Shield of Michigan, 263 Mich App 449, 464; 68 8 NW2d 523 (2004)—that an IRO’s recommendation was not binding on the commissioner—was merely dictum because the English panel was never actually pr esented with the question whether an IRO’s recommendation is binding on the commissioner. Ross, supra at 373-375. Alternatively, the Court concluded that even if th e statement in English were binding on the Court, the English panel had recognized that the commissioner’s independent review of the IRO’s recommendation under MCL 550.1911(15) was limite d to confirming that the recommendation did not contradict the health -plan provisions. Ross, supra at 375. However, the Ross panel agreed with BCN that the circuit court erroneously required it to pay for evaluation and treatment after November 17, 2002, because the commissioner had not considered the care Ross received after that date. Id. at 380-381.

10BCN applied for leave to appeal in th is Court. We ordered oral argument on the application and specifically directed the parties to address whether the Court of Appeals paid sufficient attenti on to the provisions of PRIRA that require an IRO to provide a “recommendation” to the commissioner, and whether the Court of Appeals properly characteri zed as dictum the statement in English that indicated that the IRO’s recommendation was not binding on th e commissioner. 477 Mich 960 (2006). The commissioner has filed an amicus curiae brief in support of BCN’s application.
II. STANDARD OF REVIEW The interpretation of statutes presents an issue of law, which is reviewed de

novo. Lapeer Co Clerk v Lapeer Circuit Judges, 465 Mich 559, 566; 640 NW2d 567 (2002). Decisions of an administrative agency or officer, in cases in which no hearing is required, are reviewed to de termine whether the decisions are authorized by law. Const 1963, art 6, § 28.
III. ANALYSIS PRIRA is a relatively recent addition to our state’s laws. Enacted in 2000 as part of the Legislature’s across-the-bo ard attempt to regulate HMOs and other insurance providers consistently, 6 PRIRA was intended to st andardize the external

6 PRIRA was introduced as HB 5576, enacted as 2000 PA 251, and amended by 2000 PA 398. HB 5576 was considered in conjunction with HB 5573, HB 5574, and HB 5575. At the same time that the House bills were being considered, SB 1211 and SB 1209 were also being considered. 2000 PA 252 (SB 1209) repealed part 210 of the Public Health Code (MCL 333.21001 through (continued...)

11review process designed to resolve disputes over covered benefits, establish IRO qualifications, and provide for penalties in cases of wrongful denial of benefits. Under PRIRA, the external review process of advers e determinations made by health carriers is governed by MCL 550.1911, which provides: (1) Not later than 60 days after the date of receipt of a notice of an adverse determination . . . , a covered person . . . may file a request for an external revie w with the commissioner. . . . (2) Not later than 5 business days after the date of receipt of a request for an external review, the commissioner sh all complete a preliminary review of the request to determine all of the following: (a) Whether the individual is or was a covered person in the health benefit plan . . . . (b) Whether the health care serv ice . . . reasonably appears to be a covered service under the covered person’s hea lth benefit plan. (c) Whether the covered person has exhausted the health carrier’s internal grieva nce process . . . . (d) The covered person has provided all the information and forms required . . . . (e) Whether the health care servi ce . . . appears to involve issues of medical necessity or clinical review criteria. (...continued) 333.21098), which had prev iously regulated HMOs; brought HMOs under the authority of the OFIS commissioner by adding ch apter 35, entitled “Health Maintenance Organizations” to the Insu rance Code; and am ended MCL 500.2213 to provide that HMOs must establish an internal review procedure and that insurers must notify insured s of the right to indepe ndent review under PRIRA. 2000 PA 253 (SB 1211) amended MC L 333.20106, MC L 333.20124, MCL 333.20161, and MCL 333.22205 of the Pub lic Health Code to make technical changes regarding HMOs in light of the transfer of the regulatory framework pertaining to HMOs from the Public Health Code to the Insurance Code. 2000 PA 250 (HB 5573) amended MCL 550.1404 of the Nonprofit Health Care Corporation Reform Act to provide for independe nt external review under PRIRA.

12(3) Upon completion of th e preliminary review under subsection (2), the commissioner im mediately shall provide a written notice . . . as to whether the reque st is complete and whether it has been accepted for ex ternal review. (4) If a request is accepted for external review, the commissioner shall do both of the following: (a) Include in the written no tice under subsection (3) a statement that the covered pe rson . . . may submit to the commissioner . . . additional information and supporting documentation that the reviewi ng entity shall consider when conducting the external review. (b) Immediately notify the h ealth carrier in writing of the acceptance of the request for external review. (5) If a request is not accepted fo r external revi ew because the request is not complete, the commi ssioner shall info rm the covered person . . . what information or ma terials are needed to make the request complete. If a request is not accepted for external review, the commissioner shall provide written notice . . . to the covered person . . . and the health carrier of th e reasons for its nonacceptance. (6) If a request is accepted for external review and appears to involve issues of medi cal necessity or clini cal review criteria, the commissioner shall assign an independent review organization . . . . The assigned independent review or ganization shall be approved . . . to conduct external reviews and shall provide a written recommendation to the commissioner on whether to uphold or reverse the adverse determination . . . . (7) If a request is accepted for external review, does not appear to involve issues of medical necessity or clinical review criteria, and appears to only involve purely c ontractual provisions of a health benefit plan, su ch as covered benefits or accuracy of coding, the commissioner may keep the reque st and conduct his or her own external review or may assign an independent review organization as provided in subsection (6) . . . . Except as otherwise provided in subsection (16), if the commissioner keeps a request, he or she shall review the request and issue a deci sion . . . within the same time limits and subject to all other requi rements of this act for requests assigned to an independent review organization. If at any time during the commissioner’s review of a request it is determined that a

13request does appear to invo lve issues of medical necessity or clinical review criteria, the commissioner shall immediately assign the request to an independent review organization . . . . (8) In reaching a recommendation , the reviewing entity is not bound by any decisions or conclusions reached during the health carrier’s utilization review process or the health carri er’s internal grievance process. (9) Not later than 7 business da ys after the date of the notice under subsection (4)(b), the health carrier . . . shall provide . . . the documents and any information c onsidered in making the adverse determination . . . . (10) Upon . . . notice from th e assigned independent review organization that the health carrier . . . has failed to provide the documents and information w ithin 7 business days, the commissioner may terminate the external review and make a decision to reverse the adv erse determination . . . . (11) The reviewing entity shall review all of the information and documents received under subsection (9) and any other information submitted . . . . * * * (13) In addition to the documents and information provided under subsection (9), the reviewing entity . . . shall consider the following in reaching a recommendation : (a) The covered person’s p ertinent medical records. (b) The attending health care pr ofessional’s recommendation. (c) Consulting reports from appropriate health care professionals and othe r documents submitted by the health carrier, the covered person , the covered person’s au thorized representative, or the covered person ’s treating provider. (d) The terms of coverage under the covered person’s health benefit plan with the health carrier. (e) The most appropriate p ractice guidelines, which may include generally ac cepted practice guidelin es, evidence-based practice guidelines, or any other practice guidelines developed by

14the federal government or national or professional medical societies, boards, and associations. (f) Any applicable clinical revie w criteria developed and used by the health carrier or its designee utilization review organization. (14) The assigned independen t review organization shall provide its recommendation to the commissioner not later than 14 days after the assignment by the commi ssioner of the request for an external review. The independent review organization shall include in its recommendation all of the following: (a) A general descrip tion of the reason fo r the request for external review. (b) The date the independent review organization received the assignment from the commissioner to conduct the external review. (c) The date the external review was conducted. (d) The date of its recommendation

. (e) The principal reason or reasons for its recommendation

. (f) The rationale for its recommendation

. (g) References to the evidence or documen tation, including the practice guidelines, c onsidered in reaching its recommendation

. (15) Upon receipt of the assigned independ ent review organization’s recommendation under subsection (14), the commissioner immediately shall review the recommendation to ensure that it is not contrary to the terms of coverage under the covered person’s health benefit plan with the health carrier. (16) The commissioner shall prov ide written notice . . . to the covered person . . . and th e health carrier of the d ecision to uphold or reverse the adverse determination . . . not later than 7 business days after the date of receipt of th e selected independent review organization’s recommendation . . . . The commissioner shall include in a notice under this subs ection all of the following: (a) The principal . . . reasons for the decision . . . .

15(b) If appropriate, the principal . . . reasons why the commissioner did not follow th e assigned independent review organization’s recommendation . [Emphasis added.] To summarize, under MCL 550.1911, the commissioner has discretion to accept or reject a request for an external review, MCL 550.1911(3) . If a request is accepted, the covered person is permitte d to submit “additional information and supporting documentati on,” MCL 550.1911(4)(a), an d the health carrier is required to submit “the doc uments and any informatio n considered in making the adverse determination, ” MCL 550.1911(9). If an accepted request “involve[s] purely contractual provisions,” the commissioner has discretion to conduct his or her own external review, MCL 550.1911(7). If, however, an accepted request “invol ve[s] issues of medical necessity or clinical review criteria,” 7 the commissioner must assign an IRO to conduct the external review, MCL 550.19 11(6). IROs conduct their external reviews through clinical p eer reviewers, who must be physicians or meet the requirements found in MCL 550.1919(2) 8 for health care professionals. In

7 “Clinical review criteria” is defined as “the written screening procedures, decision abstracts, clinical protocols, a nd practice guidelines used by a health carrier to determine the necessity and appr opriateness of health care services.” MCL 550.1903(f).

8 MCL 550.1919(2) provi des in relevant part: A clinical peer reviewer . . . sh all be a physician or other appropriate health care professional who meets all of the following minimum qualifications: (continued...)

16reaching a recommendation, the IRO is not bound by any prior decision or conclusion, MCL 550.1911(8). After reviewing all information, the IRO makes a recommendation concerning whether the commissioner should uphold or reverse the health carrier’s decision, MCL 550.19 11(6). This recommendation must be provided within 14 days of receivi ng the assignment, MCL 550.1911(14). The commissioner, who is not required to have any medical knowledge, then reviews the recommendation to ensure that it is not contrary to the terms of coverage under the covered pe rson’s health benefit plan with the health carrier, MCL 550.1911(15). The commissioner ha s seven days to decide whether to uphold or reverse the h ealth carrier’s decision, MC L 550.1911(16). The commissioner must provide the reasons fo r his or her decisi on, including the reasons why he or she decided not to follow the IRO’s recommendation, MCL

(...continued) (a) Is an expert in the treat ment of the covered person’s medical condition that is the s ubject of the external review. (b) Is knowledgeable about the recommended health care . . . treatment because he or she devo ted in the immediately preceding year a majority of his or her time in an active clinical practice within the medical specialty most relevan t to the subject of the review. (c) Holds a nonrestricted license . . . and, for physicians, a current certification by a recogni zed American medical specialty board in the . . . areas appropriate to . . . the external review. (d) Has no history of disciplinar y actions . . . that raise a substantial question as to the clinical peer reviewer’s physical, mental, or professional co mpetence or moral character.

17550.1911(16)(b). Finally, a party aggrieved by the commissioner’s decision may seek judicial review, MCL 550.1915(1). 9 As can be seen from this statutory scheme, it is hard to imagine a more comprehensive review process. And this comprehensive scheme in MCL 550.1911 refers 13 times to an IRO’s recommendation. 10 In its opinion, the Court of Ap peals neither defined the term “recommendation” nor considered the significan ce of its use by the Legislature. “Recommendation” is defined as “the act of recommending.” Random House Webster’s College Dictionary (2005). “Recommending” is the gerund form of “recommend,” which is defined as “to urge or suggest as appropriate . . . .” Id. “Suggest” is defined as “to mention, intr oduce, or propose (an idea, plan, person, etc.) for consideration, possible ac tion, or some purpose or use.” Id. Clearly, to make a “recommendation” means to suggest or propose something; “recommendation” is not a word that co nnotes mandatory comp liance. Nowhere

9 MCL 550.1915(1) provides in relevant part: “An extern al review decision and an expedited external review deci sion are the final administrative remedies available under this act. A person aggrieved by [such a] decision may seek judicial review . . . .” 10 In response to Justice Kelly’s analysis using the doctrine of expressio unius est exclusio alterius, we point out that MCL 550.1911(16) expressly gives the commissioner authority to uphold or reverse an insurer’s adverse determination. Nowhere in the statute is there a similar provisio n that grants an IRO comparable authority. T hus, Justice Kelly’s applica tion of the doctrine of expressio unius est exclusio alterius is unpersuasive because it leads to an interpretation that is contrary to the unamb iguous language of the statute. See Luttrell v Dep’t of Corrections, 421 Mich 93, 107; 365 NW2d 74 (1984).

18in the statute does it say that the IRO’s recommendation is binding in any way, so there is nothing that would require us to impute a meaning other than the plain meaning of the term “recommendation.” Moreover, the nature of the term “recommendation” as connoting a su ggestion is reinforced by MCL 550.1911(16)(b), which exp ressly allows the commission er to decline to follow the IRO’s recommendation as long as the commissioner explains his or her reasons for doing so. 11

11 According to Justice Kelly, the commissioner act ed in an arbitrary and capricious manner when sh e rejected the IRO’s conclusions about medical necessity. In reaching this conclusion, Justice Kelly claims: “The IRO determined that (1) the initial treatment was a medical emergency, (2 ) it was not appropriate to transfer Ross to an in-net work facility, and (3) Ross was not stabilized before November 17, 2002.” Post at 12. We disagree that th e IRO concluded that Ross was not stabilized. The term “stabiliza tion,” as defined by MCL 500.3406k(2) means “the point at which no material deterioration of a condition is likely, within reasonable medical probability, to result from or occur during transfer of the patient. ” (Emphasis added.) On July 23, 2002, Ross was discharged from the facility, and the discharge summ ary indicated Ross was “stable for discharge.” It is axiomatic that if a patient is stable for discharge, the patient may be transferred without the likelihood of a material de terioration in the patient’s condition resulting from or occurring during t ransfer. We emphasize that the only period for which the IRO specifically indicated that it was not medically feas ible to transfer Ross was from July 8, 20 02, to July 23, 2002, even when specifically asked at what point Ross was st abilized for transfer. With respect to the subsequent periods, the IRO merely characterized the po ssibility of a transfer as improper. The IRO’s rationale for finding that tran sfer was improper wa s not because Ross’s medical condition woul d likely have deteriorated du ring transfer (the standard required under MCL 500.3406k), but because it would have been inappropriate to “unbundle” the remaining care. Thus, Ju stice Kelly’s characterization of the IRO’s finding—that Ross was not stabiliz ed before November 17—is faulty. Nevertheless, had the IRO found on these facts that Ro ss was not stabilized before November 17, i.e., that his condition was likel y to deteriorate if he was transferred, such a finding woul d itself have been arbitrary and capricious, and, if the commissioner had blindly accepted such a finding, th e commissioner’s actions (continued...)

19In the only Michigan case before this on e to address PRIRA, English, the Court of Appeals likewise noted that an IRO’s recommendatio n was not binding on the commissioner. English, supra at 464. In English, the commissioner partially reversed Blue Cross’s denial of coverage for various blood tests because she found, consistently with the IRO’s recommendati on, that the tests were medically necessary. Id. at 453. In response to Blue Cross’s argument that it was denied due process because it did not k now the identity, and could not challenge the recommendation, of the IRO, the Court of Appeals distinguished the authority cited by Blue Cross because in those cases , which held that du e process had been denied, the evidence was unknown to the parties, while in English , the IRO’s recommendation was not evidence, but was m erely a tool to aid the commissioner, and the recommendation was not bi nding on the commissioner. Id. at 464. The Court of Appeals in the instant case declared th at this statement in English did not bind the Cour t because whether an IRO’s recommendation was binding on the commission er was not at issue in English given that the commissioner agreed with the IRO’s recommendation. Ross, supra at 374. In reaching this conclusion, the Court of Appeals failed to recognize or address the significance of the reason the English panel made the statemen t in the first place, which was to distinguish the cases cited by Blue Cross in supp ort of its argument

(...continued) would likewise have been arbitrary and capri cious. However, ac cording to Justice Kelly’s reasoning, this is exactly what the commissioner would be required to do.

20on denial of due process, an issue that most certainly was b efore the Court. The English panel held in part that PRIRA did not violate the parties’ due process rights because the IRO’s recommendation is not binding on the commissioner. Thus, its conclusion th at an IRO’s recommendation is not binding on the commissioner is clearly not di ctum. Instead, it was one of the reasons that the panel held that PRIRA did not violate th e parties’ due pro cess rights. When necessary to determine an i ssue in a case, a statement of law cannot be dictum. Wold Architects & Engineers v Strat, 474 Mich 223, 232 n 3; 713 NW2d 750 (2006). In sum, by failing to recognize the significance of the use of the term “recommendation” and declining to follow English, the Court of Appeals applied a flawed construction of the statute to conclude that while the Legislature intended that the OF IS Commissioner would review the IRO’s recommendation fo r consistency and compliance with the health plan itself, the Legislature did not intend that the OFIS Commissioner would review or reevaluate the IRO reviewer’s specific medical or clinical findi ngs. Instead, the language of PRIRA indicates that the Le gislature intended the OFIS Commissioner to defer to the IRO’s recommendation on medical issues that do not implicate the lang uage of the health plan itself. [ Ross, supra at 377-378.] This construction essentially created a judicially defined bifurcated system of review in which the IRO w ould be the final authority on issues of medical or clinical-review criteria, while the commissi oner would be the ultimate authority on purely contractual issues. Su ch a construction was not su pported by the plain and unambiguous language of the act itsel f. Given the all-encompassing,

21comprehensive scheme set forth in PRIRA , the absence of su ch a bifurcated review process in the statute convincingly demonstrates that the Legislature did not intend that the review authority be bifu rcated. In fact, as p reviously noted, the opposite intent is demonstrated by th e frequent use of the term “recommendation,” as well as by MCL 550.1911 (16)(b), which provides th at the commissioner must give the principal reasons why he or she did not follow the IRO’s recommendation. Furthermore, the Legislature has contemplated in MCL 550.1911(7) that there may be situations involving pu rely contractual issues over which the commissioner has sole authority. Similarl y, the Legislature has treated medical issues as implicating cont ractual matters also and has not established that the commissioner’s authority is different. That is, the commissi oner has identical authority over both contractual and medical i ssues. The Court of Appeals failed to recognize this and erred in concluding th at “medical issues” were to be treated differently. The act provides for no su ch bifurcation. Rather, when the Legislature charged the commissioner with ensuring that the IRO’s recommendation was consistent with the terms of coverage, it necessarily authorized the commissioner to review issues of medical necessity pertaining to those terms of coverage. In any event, the commi ssioner’s determination was consistent with the IRO’s recommendation to the extent that the recommendation did not contradict

22the policy provisions or MCL 500.3406k. 12 The only period for which the IRO stated that it was not medi cally feasible—the standard required in the policy—to

12 Justice Kelly asserts that the on ly reasonable way to read the IRO’s response to the commissioner’s last reque st for clarification is that the IRO concluded that “Ross was nece ssarily not ‘stabili z[ed]’ for transfer as that term is defined by MCL 500.3406k(2).” Post at 12 n 23. From this response, Justice Kelly claims that the IR O concluded that Ross wa s not stabilized before November 17, 2002. Again, this requires us to include the rel evant question from the commissioner’s January 26, 2005, clarification request and the IRO’s March 9, 2005, response to that que stion in their entirety: [ Q .] The Michigan statute go verning emergen cy health services, MCL 500.3406k, requi res coverage for “medically necessary services” to the insured “for the sudde n onset of a medical condition that manifests itself by si gns and symptoms of sufficient severity, including severe pain, such that the absence of immediate medical attention could reasonably be expected to result in serious jeopardy to the individual’s health . . . serious impairment to bodily functions, or serious dys function of any bodily organ or part.” The statute further provides that “an insurer shall not req uire a physician to transfer a patient before the phys ician determines that the patient has reached the point of stabilization.” Stabili zation is defined as “the point at which no material deterioration of a condition is likely, within reasonable medical probability , to result from or occur during transfer of the patient”. Based on the available records, at which point after [Ross] was hospitalized on July 8, 2002 would no material deterioration of his c ondition likely result from or occur during transfer of [Ross] to a ne twork hospital? What medical services were necessary to stab ilize [Ross] under the statute’s definition of stabilization? [ A .] This issue was addre ssed in a conference call on Wednesday, February 9, 2005 by Dr. David Sand, Medical Director, Permidion. [Ross] had methicilli n-resistant Stap hylococcus aureus septicemia following his DT-PAC E chemotherapy. The University Hospital of Arkansas discharge summary dictated September 15, 2002 documents [Ross’s] clinical status from August 16, 2002 through September 9, 2 002. [Ross] could not have been transferred or released prior to his discharge date.

23move Ross to an in-network facility was the period from Ju ly 8, 2002, to July 23, 2002, and it was for services provided during this peri od that the commissioner

reversed BCN’s deni al of coverage. 13 The IRO’s finding that it was “inappropriate” to move Ross to another facility after July 23, 2002, was not based on a standard set forth in e ither the policy or the statut e. Those standards were that it be medically feasible to move the patient or th at the patient be stabilized before being moved, respectively. Thus , the IRO’s error was one that involved

Notwithstanding the fact that the p eriod of August 16, 2002, through September 9, 2002, was no t a period the IRO was ever asked to address, we include this question and answer for two reasons. First, it is an excellent illustration of the IRO’s un responsive answers to th e commissioner’s increasingly more specific questions, which prompted th e commissioner to seek clarification of the IRO’s recommendation on three separate o ccasions. Second, it illustrates how unreasonable it is to assert that the IR O concluded that Ross was not stabilized before November 17, 2002, wh en the IRO’s answer, which relied on a September 15, 2002, discharge summary, is completely silent with respect to any time after September 9, 2002. Although we agree with Justice Kelly that the IRO repeatedly responded that BCN shou ld be required to pay for th e services, we disagree that the only way to read the IRO’s re ports is to conclude that the treatment at issue fell within the terms of coverage. Rather, given that the IRO demonstrated it was capable of understanding and applying the standards with respect to the July 8, 2002, to July 23, 2 002, hospitalization, and that it repeatedly refused to apply the standards with respect to the remaining periods of care, we think it clear that the IRO thought BCN should pa y for the services regardless of whether they fell within the terms of coverage. 13 The Court of Appeals determina tion—that the IRO specifically concluded it was not medica lly feasible to trans fer Ross before November 17, 2002, Ross, supra at 379—was clearly in error b ecause it contradicted the IRO’s own statements as well as the facility’s July 23, 2002, disc harge summary, which indicated that Ross was “stable for disc harge and outpatient followup . . . .”

24contractual and statutory construction— error that the commi ssioner correctly rectified.

IV. CONCLUSION Under the PRIRA provisions for an i ndependent external review of an adverse determination reg arding coverage, an IRO’ s recommendation concerning whether to uphold or rev erse a health carrier’s advers e determination is merely a recommendation and is not binding on the commissi oner. We reverse the judgments of the trial court and the Court of Appeals, which held otherwise, and remand the case to the trial c ourt for further proceedings. Reversed and remanded to the trial court.

Clifford W. Taylor Elizabeth A. Weaver Maura D. Corrigan Robert P. Young, Jr. Stephen P. Markman

25v S T A T E O F M I C H I G A N
SUPREME COURT
DESIREE E. ROSS, p ersonal representative of the estate of DOUGLAS G. ROSS, Petitioner-Appellee,
No. 131711
BLUE CARE NETWOR K OF MICHIGAN, Respondent-Appellant.

KELLY, J. ( dissenting ). The majority correctly frames the issu e. It is “whether the Commissioner of the Office of Financial and Insuran ce Services (OFIS) is bound by the recommendations of an independent revie w organization (IRO) on issues of medical necessity and clinical review.” 1 But the majority errs by deciding that the commissioner is never bou nd by such recommendations. I conclude that the commissioner’s revie w is limited to en suring that an IRO’s recommendations are not contrary to the terms of coverage under the covered person’s health-benefit plan. 2 In this case, the IRO’s recommendation that respondent Blue Care Ne twork of Michigan be requi red to pay for services

1 Ante at 1. 2 MCL 550.1911(15).provided before November 17, 2002, was consistent with the terms of coverage. Therefore, I would affirm the well-reasoned decision of the Court of Appeals.
F ACTS Respondent insured petitioner’s decedent, Doug las Ross. In February 2002, Ross began experiencing back and leg pain. By April, he could no longer walk or stand. He was diagnosed as suffering from num erous conditions, the most serious being a severe form of multiple myeloma. 3 Ross underwent a variety of treatment s, including chemoth erapy, to combat the disease. In May 2002, he was a dvised to seek treatment from the Bone Marrow Transplant Clinic at the University of Mi chigan (U of M). Unfortunately, he was unable to be gin treatment at the U of M immediately because his blood

sugar level was elevated. By early June, Ross’s multiple myel oma had become increasingly severe and resulted in tumors in his leg, neck, and eye. Ross was advised by his treating physicians that he had an extremely aggressive strain of the disease. Dr. Lutsic, his radiation oncologist, characterized his condition as the most severe form of the disease he had ever seen. As a result of his deterioration, Ross was told that he was no longer a candidate for a bone-marrow transplant and that the U of M would

3 Multiple myeloma is a can cer of the plasma cell. See Multiple Myeloma Research Foundation, About Myeloma <http://www.multiplemyeloma.org/about_m yeloma> (last visited January 7, 2008).

2no longer treat him. He was advised that the only remaining co urse of treatment was medication to handle the pain as he died. In a final effort to prolong Ross’s li fe, petitioner contacted the University of Arkansas for Medical Scien ces (UAMS), a leader in the treatment of myeloma. Dr. Lutsic had told petitioner that he wo uld pursue this option if he were in the same position as Ross. UAM S advised petitioner that it had successfully treated the condition that Ross had, but, if he we re to have any chance of survival, he would have to start treatm ent promptly. Ross immediately requested a referral to UAMS, which was not an in-network provi der. Respondent to ld Ross that it needed time to review UAMS’s treatment plan before it took action. However, UAMS stated that it could not provide a treatment plan without first evaluating
Ross. On June 30, 2002, Ross traveled to UAMS for an evaluation. The doctors at UAMS found Ross to be close to deat h and decided that, without aggressive treatment, he would die very soon. On July 9, 2002, Dr . van Rhee of UAMS provided respondent with an explanation of Ross’ s condition and the proposed treatment. Dr. van Rhee informed respo ndent that, without treatment, Ross had only days to live. Ross’ s certificate of coverage in cluded medically necessary services without prio r authorization in cases of i mmediate and unforeseen medical emergency. This coverage was availabl e until it became medically feasible to transfer the covered person to an in-network provider. None theless, respondent

3informed UAMS that it inte nded to deny coverage. And, ultimately, it did refuse to pay for any services provided by UAMS. The treatment administered at UAMS immediately showed marked success. On July 23, 2002, Ro ss was discharged. Ross con tinued outpatient treatment with UAMS, and he was also readmitted on numerous occasions. On December 23, 2002, Ross was admitted to UAMS for the last time. He remained an inpatient until March 2003. He di ed on April 6, 2003, at 46 years of age. In regards to Ross’s insurance claims, respo ndent categorized UAMS’s services into four periods : (1) outpatient facility servi ces commencing on June 30, 2002, (2) inpatient admission from July 8 through July 23, 2002, (3) inpatient admission on August 1 and 2, 2002, and (4) follow-up testing from September 9 to November 17, 2002. On December 18, 2002, Ross in itiated an internal appeal with respondent. When respondent denied the appeal, Ross took the second step in the internal appeal proce ss. Respondent upheld its denial. On April 28, 2003, petitioner filed a request for external review with the Office of Financial and Insurance Services (OFIS) 4 under the Patient’s Right to Independent Review Act. 5
The Commissioner of OFIS 6 accepted the request and assigned the case to Permidion, an inde pendent review organization. The IR O submitted its initial

4 OFIS is now the Office of Financ ial and Insurance Regulation, effective April 6, 2008. Execu tive Order No. 2008-2. 5 MCL 550.1901 et seq. 6 The commissioner in this case was Linda A. Watters.

4decision on May 16, 2003. It concluded that Ross’s evaluation and admission to UAMS was an emergency and that it would have been inappropriate for Ross to have received care elsewhere. The IRO al so concluded that the treatment provided was not experiment al or investigational. The commissioner asked the IRO for clarification in July 2003. She asked the IRO to consider four periods of care: (1) the J une 30, 2002, outpatient consultation, (2) the July 8 to July 23, 2002, inpatient admission, (3) the August 1 to August 2, 2002, inpatient admission, and (4) the September 9 to November 17, 2002, follow-up testing. The IRO recognized th at the commissioner had specifically asked it to review “whether each of the . . . four episodes meet[s] the criteria for emergency care und er the insured’s policy, and at what point, if any, would the patient have been stabilized to make it ‘medically feasible’ to transfer care to an in-net work facility.” The IRO determined that it did not have the info rmation required to offer an opinion about the August 1 and 2 treatment. But the IRO concluded that, with respect to the other periods , the treatment was appropriate. The IRO concluded that the initial consultation was emergen cy care and that it would have been improper to have transferred Ross to anot her facility because the “patient required ongoing treatment for a period of time under the supervision of his treating physician and it would have b een inappropriate fo r the patient to receive treatment elsewhere.” Accordingly, the IRO recommended that respondent’s denial be reversed.

5The commissioner requested even mo re review in October 2004. The October 2004 request was almo st identical to the July 2003 req uest, and the IRO responded in kind. Specifica lly, the IRO reiterated its c onclusion that the initial treatment constituted emergency services due to lack of a reasona ble alternative at an in-network facility. It also again c oncluded that Ro ss “required ongoing treatment for his condition at a center th at was familiar with his condition under the supervision of his treating physician.” The commissioner made a final request for clarification in January 2005. She asked the IRO to again consider whether Ross had b een in an acute medical state in June 2002 and to clarify when Ro ss had been stabilized for transfer. The IRO responded by noting that Ross was one week away from death when he arrived at UAMS. The IRO also attached its response to the October 2004 request for review, in which it had concluded that it would have been inappropriate to have transferred Ross to another facility. Ultimately, the IRO again recommended that respondent’s denial of coverage be overturned for the periods at issue. On March 30, 2005, n early two years after petitioner requested external review, the commissioner issued her d ecision. She disregarded the IRO’s conclusions and found that only Ross’s July 8 through July 23, 2002, inpatient admission was covered treatment. She decided that this treatment alone constituted emergency care. Accordingly, the commissi oner upheld respondent’s denial of coverage with respect to the remainder of UAMS’s services.

6Petitioner filed an appeal in the Wa yne Circuit Court. The circuit court reversed the commissioner’s decision and ordered respond ent to pay for all the services rendered by UAMS. The circu it judge reasoned that, because the commissioner had concluded that the July 8 to July 23 hosp italization constituted emergency services, all the services that UAMS provid ed were emergency services. Respondent filed an application for leave to appeal in the Court of Appeals. The Court granted leave to appeal and, in a published opinion, affirmed in part and reversed in part the circuit court’s order. 7 The Court of Appeals reversed the decision requiring respondent to pay fo r services rendered after November 17, 2002, because th e commissioner had not add ressed these services. 8 But the Court affirmed with respect to services provided before N ovember 17, 2002. 9 It held that the commissioner had erred by discounting the IRO’s medical recommendations and replacing them with her own independent conclusions. 10
T HE P ATIENT ’ S R IGHT TO I NDEPENDENT R EVIEW A CT This case requires us to consider th e final decision of an administrative agency and the co rrect interpretation of a statute. I ssues of statutory interpretation

7 Ross v Blue Care Network of Michigan, 271 Mich App 358; 722 NW2d 223 (2006). 8 Id. at 381. 9 Id. at 371. 10 Id.

7are reviewed de novo. 11 In cases where no hearing is required, final decisions of administrative agencies are reviewed to determine wh ether the decision was authorized by law. 12 “[A]n agency’s decision that ‘is in violation of statute [or constitution], in excess of the statutory au thority or jurisdic tion of th e agency, made upon unlawful procedures resulting in material prejudice, or is arbitrary and capricious,’ is a decision that is not authorized by law.” 13 We have been asked to interpret the Patient’s Right to Independent Review Act. Under PRIRA, when an individu al believes that a health-care coverage determination is incorrect, he or she ha s the right to request an independent review. 14 When the commissioner accepts a request for ext ernal review and the review involves questions of medical necessity or clinical review, the commissioner is required to appoint an IRO to assess the services. 15 The IRO is directed to consider the relevant materi als and recommend eith er upholding or reversing the earlier determination. 16 Upon receipt of the recommendation, the commissioner is authorized to review the IRO’s recomm endation “to ensure that it

11 Ostroth v Warren Regency, GP, LLC , 474 Mich 36, 40; 709 NW2d 589 (2006). 12 Const 1963, art 6, § 28. 13 Northwestern Nat’l Cas Co v Ins Comm’r , 231 Mich App 483, 488; 586 NW2d 563 (1998), quoting Brandon School Dist v Michig an Ed Special Services Ass’n , 191 Mich App 257, 263 ; 477 NW2d 138 (1991). 14 MCL 550.1911(1). 15 MCL 550.1911(6). 16 MCL 550.1911(6), (11), and (13).

8is not contrary to the terms of coverage under the covered person ’s health benefit plan with the health carrier.” 17 Accordingly, under PRIR A, if a case accepted for external review involves an issue of medical necessity, an IRO must be appointed to make a recommendation. The commissi oner, however, has the po wer to review the IRO’s recommendation. But that power is not un limited. The issue here is whether the commissioner exceeds her po wer when she substitute s her opinion for the conclusion of the IRO on i ssues that require the exerci se of medical judgment. For many years, this Cour t has recognized the maxim expressio unius est exclusio alterius

. 18 This maxim says that the “exp ress mention in a statute of one thing implies the exclusion of other similar things.” 19 So well established is this maxim that it can be assumed that legisl ators are fully aware the courts will utilize it when construing their words. A ccordingly, by expressly giving the commissioner the authority to review the recommendation to “ensure that it is not contrary to the terms of coverage,” the Legislature im plicitly barred the commissioner from reviewin g the recommendation for any other purpose. As explained by the Court of Appeals:

17 MCL 550.1911(15). 18 E.g., Peter v Chicago & W M R Co , 121 Mich 324, 329; 80 NW 295 (1899). 19 Bradley v Saranac Community Schools Bd of Ed , 455 Mich 285, 298; 565 NW2d 650 (1997).

9[W]hile the Legislature intended that the OFIS Commissioner would review the IRO’s recommendation for consistency and compliance with th e health plan itself, the Legislature did not intend that the OFIS Commissioner woul d review or reevaluate the IRO reviewer’s specific medical or c linical findings. Instead, the language of PRIRA indicates that the Legislature in tended the OFIS Commissioner to defer to the IRO’s recommendation on medical issues that do not imp licate the language of the health plan itself. [20] Thus, the commissioner is specifically authori zed to review the IRO’s recommendation to ensure that it is not cont rary to the “terms of coverage.” In this respect, the recommendation is not bi nding. But the co mmissioner is not allowed to substitute her lay opinion fo r the medical conclusions of the IRO. 21

20 Ross , 271 Mich App 377-378. 21 The majority argues that my analysis using expressio unius est exclusio alterius leads to an interpretation that is cont rary to the language of the statute. The majority claims that I fail to recogn ize that the commissioner is given the power to uphold or revers e an adverse determination whereas the IRO is not. What the majority overlooks is that th e commissioner’s power to review the IRO’s recommendation is limited to “ensur[ing] th at it is not contrary to the terms of coverage . . . .” Thus, the commission er is authorized to reject the IRO’s recommendation only if it is co ntrary to the terms of coverage. It necessarily follows that the commission er must adopt the IRO’s recommendation when it is not contrary to the terms of coverage. I recognize this point. The majority does not. Hence, it is the majority’s interpretati on that is contrary to the language of the statute, not mine. The interpretation of the statute advan ced by the members of the majority is another example of their belief that th e answer to all questions of statutory interpretation lies in a dictionary. As a result of this belief, they focus on the dictionary definition of th e word “recommendation” to resolve the case. But the majority ignores the fact that the commissioner’s power of review is limited. Regardless of how the ma jority defines the wo rd “recommendation,” the commissioner exceeds the scope of her power when she perfo rms an act that she is not empowered to do. As I have expl ained, PRIRA gives the commissioner the power to review the recommendation solely to ensure that it is not contrary to the terms of coverage.

10Therefore, in order to det ermine whether the commissioner exceede d the scope of her powers in this case, it is necessary to examin e the “terms of coverage.” Here, the IRO’s recommendation was c onsistent with the terms of coverage. Ross’s hea lth-benefit plan covered services in cases of immediate and unforeseen medical emergency until such time as it wa s medically feasible to transfer him to an in-netwo rk provider. The IRO co ncluded that Ross’s initial treatment was a medical emergency. It also found that Ross “required ongoing treatment for a period of time under the s upervision of his trea ting physician and it would have been inappropriate for [R oss] to receive treatment elsewhere.” Also, as recognized by th e Court of Appeals, [respondent’s] schedule of benefits provides that respondent will provide treatment for “medical emergenc[ies].” The schedule of benefits also provid es coverage for related medically necessary services and related ancillary services. The IRO specifically concluded that Ross’s initial eval uation from June 30, 2002, until July 7, 2002, and his hospitalizati on of July 8 to 23, 2002, both constituted emergency services. Further, as recognized by the OFIS Commiss ioner in her final opinion and order, Michigan la w requires a health maintenance organization certificate, which ot herwise provides coverage for emergency health services, to “provide coverage for medically n ecessary services provided to an insured for the s udden onset of a medical condition that manifests itself by signs and symptoms of su fficient severity, including severe pain, such that the ab sence of immediate me dical attention could reasonably be expected to result in serious jeopardy to the individual’s health[,] . . . serious impairment to bodily functions, or serious dysfunction of an y bodily organ or part . An insurer shall not require a physician to transfer a patient before the physician determines that the patient has reached the point of stabilization. An insurer shall not deny pa yment for emergency h ealth services up to

11the point of stabilization provided to an insured under this subsection because of either of the following: “(a) The final diagnosis. “(b) Prior authorization was no t given by th e insurer before emergency health serv ices were provided. [MCL 500.34 06k(1).]” MCL 500.3406k(1) goes on to define “s tabilization” as “the point at which no material deterioration of a condition is likely, within reasonable medical probability, to result from or occur during transfer of the patient.” The IRO reviewer in this case specifically concluded that it would not have been medically feasible to transfer Ross at any time before November 17, 2002, because his condition had not been sufficien tly stabilized and b ecause his follow-up treatments at the Arkansas facili ties were medically necessary. [22] In summary, the plan c overed medical emergencies up to the point where it was medically feasible to transfer the patie nt to an in-network facility. Michigan law also requires coverage fo r emergency health services until stabilization. The IRO determined that (1) th e initial treatment was a medical emergency, (2) it was not appropriate to transfer Ross to an in-network facility, a nd (3) Ross was not stabilized before November 17, 2002. 23 Therefore, the IRO’s recommendation

22 Ross , 271 Mich A pp 378-379 (cita tions omitted). 23 The majority claims that the IR O never concluded that Ross was not “stabiliz[ed]” as defined by MCL 500.3406k(2 ). I disagree. In her final request for clarification, the commissioner specifica lly asked the IRO to consider whether Ross was stabilized as prov ided in MCL 500.3406k(2 ). In light of the commissioner’s specific request, there is only one reasonable way to read the IRO’s conclusion that respondent should be required to pay fo r the services: Ross was necessarily not “stabiliz[ed]” for tran sfer as that term is defined by MCL 500.3406k(2). It seems to me that the majority’s problem with th e IRO’s recommendation can be boiled down to two poin ts. The first lies in the la nguage that the IRO used in its reports. The majority goes so far as accusing th e IRO of responding to the (continued...)

12that respondent be ordered to pay for the services was consistent with the terms of
coverage. 24 For this reason, the commission er’s decision to ignore the IRO’s recommendation was not authorized by law. Aside from this inconsistency with the statutory language, an additional reason exists for not allowi ng the commissioner to subs titute her opinion for the conclusions of the IRO on issues requiri ng medical judgment. The commissioner

(...continued) commissioner’s requests with “unresponsive answers.” Ante at 24 n 12. Given that the IRO is made up of doctors, not la wyers, it is not surprising that it did not use the legalistic language that the majority is looking for. But we have a duty to look beyond the languag e that is used to understa nd what the IRO was really saying. The commissioner re peatedly cited the relevan t standards and asked the IRO to reevaluate its conclusion that respondent be requi red to pay for the services. Repeatedly, the IRO concluded that responden t should be required to pay for the services at i ssue. The commissioner made repeated requests citing the relevant standards and the IRO repeatedly replied that respondent should be required to pay for the services. Everyth ing considered, the on ly way to read the IRO’s reports is to find that the IRO co ncluded that the treatment at issue fell within the terms of coverage. The second point is that the majority apparently believes that the IRO decided that it was going to recommend that respondent be required to “pay for the services regardless of whether they fell within the terms of coverage.” Ante at 24 n 12. I find nothing to indicate bias on the part of the IRO. Accordingly, I find it inappropriate for the major ity to make this assumption. This faulty assumption lies at the heart of th e majority’s decision. 24 An example of a recommendation that would be contrary to the terms of coverage would be an IRO’s determinat ion that mental-hea lth services were medically necessary when th e plan excluded co verage for mental-h ealth services. In such a situation, th e commissioner could reject the recommendation because the plan did not cover mental-health services.

13is not a physician. 25 Her expertise is banking. By contrast, for an IRO to be approved, the IRO and its physicians mu st meet certain standards designed to ensure quality and credentials. 26 The commissioner is no t a doctor, whereas the IRO is made up of very well-qualif ied doctors. I do not see how the commissioner’s decision to rej ect the IRO’s medical conc lusions in favor of her own uneducated opinion is anything other than arbitrar y and capricious. And a decision that is arbitrary and capricious is not authorized by law. 27 In this case, the IRO’s physician , who is board-certif ied in internal medicine, medical oncology, and hema tology, concluded that Ross’s initial evaluation constituted emergency services. The physician also conclude d that it was not appropriate to transfer Ross to another facility before November 17, 2002. And Ross’s condition had not stabilized to the point where he c ould have been transferred to an in-netwo rk facility. Ross’s health plan covered medical emergencies until it was medically feasible to transfer him to an in-network provider. Michigan law al so provides that “[a]n in surer shall not deny payment for emergency health services up to the point of stabilization . . . .” 28 It follows

25 MCL 500.202 sets forth the qualifi cations of the commissioner. Notably absent is any requirement that the commissioner have any medical degree or license. 26 MCL 550.1919. 27 Northwestern Nat’l Cas, 231 Mich App at 488. 28 MCL 500.3406k(1).

14that respondent was required to pay for the services provided through November 17, 2002. 29 Yet the commissioner found that only th e July 8 to July 23, 2002, services were covered. In so doing, she necessarily rejected th e medical findings of the IRO in favor of her own un educated opinion. Not only was there no medical evidence supporting her decisi on, she is completely unqu alified to offer a medical opinion. There could be no clearer example of an arbitrary and capricious decision. 30
C ONCLUSION As the Court of Appeals recognized, the commissioner ex ceeds the scope of her power when she subs titutes her opinion for the conclu sion of an IRO on issues

29 The majority claims that “t he commissioner’s determination was consistent with the IRO’s recommendation to the extent th at the recommendation did not contradict th e policy provisions or MCL 500.3406k.” Ante at 22-23. As I have explained, this simply is not true. 30 The majority takes the position th at a conclusion that Ross was not stabilized for transfer is arbitrary and ca pricious, given that UAMS discharged Ross on July 23, 2002 . But the fact that Ross was disc harged does no t mean that it would have been appropriate to have transferred him to another facility. In fact, in its discharge summary UAMS specifically indicated that Ross required “outpatient followup.” The IRO’s physician, who is a medical expert, reviewed the relevant materials and reached the medical conclusion that it would have been inappropriate to have transferred Ross to another facility. As the IRO uses physicians medically trained to reach su ch conclusions, the ma jority’s suggestion that the IRO’s conclusion was arbitrary and capricious is preposterous. In addition, there is no evidence that the s ervices Ross required were offered by an in-netwo rk provider. Without proof that an in-net work provider offered the requisite services, it is impossible to conclude that transfer would have been appropriate.

15that require the exercise of medical judgmen t. This result is not only mandated by the statutory language, it is also necess ary to avoid allowing the commissioner, a banker, to make medical decisions. Acco rdingly, I dissent. I would affirm the judgment of the Court of Appeals.

Marilyn Kelly

Cavanagh, J. I would deny leave to appeal. Michael F. Cavanagh

16