Michigan Supreme Court 

Lansing, Michigan 

Chief Justice: Justices: 

Clifford W. Taylor Michael F. Cavanagh 

Elizabeth A. Weaver Opinion Marilyn Kelly 

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 NETWORK OF MICHIGAN, 

 Respondent-Appellant. 

BEFORE THE ENTIRE BENCH 

TAYLOR, C. J. 

At issue in this action brought pursuant to the Patient’s Right to 

Independent Review Act (PRIRA), MCL 550.1901 et seq., is whether the 

Commissioner of the Office of Financial 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 Financial and Insurance Regulation, effective 

April 6, 2008. Executive Order No. 2008-2. 
 

the judgment of the Court of Appeals and the order of the trial court that held to 

the contrary and remand this matter to the trial court for further proceedings 

consistent with this opinion. 

I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE 

Douglas Ross was covered under the health maintenance organization 

(HMO) health plan of respondent Blue Care Network of Michigan (BCN). The 

certificate of coverage excluded out-of-network services that were not 

preauthorized.2

 However, it did provide coverage for medically necessary services 

without prior authorization in cases of immediate and unforeseen medical 

emergency, but only until such time as it became medically feasible to transfer the 

person covered under the health plan to an in-network provider.3 

2

 Section 2.01 of the certificate provided: 

The Health Plan is not an insurance company but a health 

maintenance organization which operates on a direct service basis. 

Health, medical, hospital, and other 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 provided for medically necessary 

emergency services when they are needed immediately because of 

an accidental injury or sudden illness, and the time required to 

contact your Primary Care Physician could result in permanent 

damage to your health. All benefits under this Certificate must be 

provided or authorized by your Primary Care Physician or BCN, 

except in the case of an immediate and unforeseen medical 

emergency. 

* * * 

(continued...) 

2
 
 

In March 2002, Ross contracted an acute form of multiple 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, that Ross receive a stem-cell transplant and advised that 

it had given Ross information on bone-marrow transplants and instructed Ross to 

discuss this option with Dr. Goldfarb. According to Desiree Ross (petitioner), 

who is Ross’s wife and the personal representative of his estate, Ross’s condition 

began to spiral out of control toward the end of June 2002, Ross’s oncologist told 

him that he was no longer eligible for treatment at the University of Michigan 

Medical Center because the cancer had spread to his soft tissue, and Ross was 

consigned to palliative treatment. She also claimed that Dr. Ronald Lutsic, a 

radiation oncologist, told her 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 result in permanent 

damage to your health if not treated immediately. 

* * * 

C. All follow-up care to initial emergency treatment . . . is 

covered only when provided or approved by BCN or by your 

Primary Care Physician. 

D. If a Member is hospitalized for emergency care in a nonaffiliated hospital or outside of the BCN service area, BCN may 

require that the Member be transferred to an affiliated hospital or 

(continued...) 

3
 
 

Arkansas (the facility), one of two facilities 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 facility’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 Arkansas and began an evaluation at the 

facility without BCN’s approval. On July 8, 2002, Dr. Frits van Rhee, the 

evaluating doctor, admitted Ross to the hospital, noting that without aggressive 

intervention, Ross had only about seven days 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 notices 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 claimed that BCN never informed her of any innetwork providers that could treat Ross’s condition, she did not indicate that she 

(...continued) 

other facility within the service area as soon as medically feasible. 

[Emphasis added.] 

4
 
had contacted Ross’s PCP as advised by BCN for such a referral, and she did not 

present any evidence that the University of Michigan Medical Center was unable 

to administer the same treatment Ross received at the facility. Ross continued 

with both outpatient and inpatient treatment at the facility without 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, 2002, pursuant to BCN’s internal 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 innetwork, and (3) BCN considered the facility’s services to be experimental. On 

February 6, 2003, petitioner filed a “step two” internal appeal, which BCN denied. 

On April 28, 2003, petitioner appealed to OFIS under PRIRA. The commissioner 

accepted the request and assigned 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 mind of a prudent 

patient,” that attempts were made to use 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 facility should not have been considered 

experimental. After receiving the initial report, the commissioner repeatedly 

sought to compel the IRO to apply the contractual and statutory standards rather 

5
 
 

than the IRO-imposed prudent-patient standard for evaluating an emergency,4 

4

 We quote here one of the questions in the commissioner’s October 2004 

request for clarification of the IRO’s recommendation and the IRO’s November 

2004 response to that question as just one example of how the commissioner 

repeatedly sought to compel the IRO to apply the statutory standards and how the 

IRO unwarrantedly declined to do so: 

[Q.] Michigan law requires coverage for emergency 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 stated Mr. Ross began DT PACE 

chemotherapy on July 10, 2002 and within 7 days Myeloma was 

back under control. Can it be assumed that Mr. Ross was stable by 

July 18, 2002? 

[A.] The patient subsequently developed severe and lifethreatening complications of his disease process, requiring 

admission to the University of Arkansas Medical Center July 8, 

2002. 

Blue Care Network’s policy on Emergency Care Section 1.04 

D. [sic] states, “If a Member is hospitalized for emergency care in a 

nonaffiliated hospital or outside of the BCN service area, BCN may 

require that the member be transferred to an affiliated hospital or 

other facility within the services 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 with the patient’s course of 

treatment. It would have been inappropriate to attempt to transfer 

the patient across the country 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 condition under the supervision of his treating 

physician. 

This reviewer does not have adequate clinical information 

about the August 1 - August 2, 2002 inpatient admission; therefore, 

no decision can be rendered regarding this episode. 

(continued...) 

6
 
 

sending the IRO three requests for clarification whether the June 30, 2002, 

outpatient consultation, 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 constituted emergency care, which 

would be covered under the certificate of coverage, as well as under MCL 

(...continued) 

The follow-up testing was to evaluate 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 “transfer” this responsibility to another 

facility, which was not involved with 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 emergency and life-threatening nature of 

the patient’s condition without effective 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 medically feasible or appropriate to transfer 

[Ross] to another facility” referred to the July 8, 2002, to July 23, 2002, 

admission, while the remainder of the IRO’s answer addressed the subsequent 

periods of treatment. The IRO did not indicate with respect to these subsequent 

periods that transfer would have been medically infeasible; rather, the IRO 

indicated only that it would 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 that [the IRO] did not 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 education, would be unable to understand 

or apply the term. Moreover, the IRO demonstrated in its November 2004 

response that the IRO’s physician reviewer was perfectly capable of using the term 

“medically feasible” and applying, even citing, the language in BCN’s certificate 

when the reviewer deemed it appropriate to do so. 

7
 
 

500.3406k,5

 and whether Ross became stabilized at any point so as to make it 

medically feasible to transfer him to an in-network facility. 

The IRO responded that Ross was admitted 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-network facility was not involved in Ross’s 

treatment. In the IRO’s last two responses, 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 emergency medical services until 

the insured is stabilized and defines “stabilization”: 

(1) . . . [A] health maintenance organization contract shall 

provide coverage for medically necessary services provided to an 

insured for the sudden onset of a medical condition that manifests 

itself by signs and symptoms of sufficient severity . . . 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 dysfunction of any 

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 payment 

for emergency health services up to the point of stabilization 

provided to an insured under this subsection because of either of the 

following: 

(a) The final diagnosis. 

(b) Prior authorization was not given by the insurer before 

emergency health services were provided. 

(2) As used in this section, “stabilization” 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. 

8
 
inappropriate 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 occasions 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, was 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-network services were not 

covered; (2) BCN did not approve the out-of-network services; (3) there was no 

evidence that treatment was unavailable within the network, given that Ross’s PCP 

had referred him to the University of Michigan Medical Center, a 

multidisciplinary cancer treatment center; and (4) other 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 medically feasible to transfer Ross to an 

in-network facility because of the emergency nature of his condition; (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 were not available in-network. Focusing on 

the argument that the services were emergency services, the circuit court reversed 

the part of the commissioner’s decision that upheld BCN’s denial of coverage, 

9
 
reasoning that the commissioner’s conclusion—that some but not all of the 

facility’s services were emergency services—was unauthorized by law. 

The Court of Appeals granted BCN’s application for leave to appeal and 

affirmed with respect to the services provided through November 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 authority when she discounted the IRO’s medical 

recommendations and replaced them with her 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; 688 NW2d 523 (2004)—that an 

IRO’s recommendation was not binding on the commissioner—was merely 

dictum because the English panel was never actually presented 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 the 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 limited 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. 

10
 
 

BCN applied for leave to appeal in this Court. We ordered oral argument 

on the application and specifically directed the parties to address whether the 

Court of Appeals paid sufficient attention to the provisions of PRIRA that require 

an IRO to provide a “recommendation” to the commissioner, and whether the 

Court of Appeals properly characterized as dictum the statement in English that 

indicated that the IRO’s recommendation was not binding on the 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 determine 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-board attempt to regulate HMOs and other 

insurance providers consistently,6

 PRIRA was intended to standardize 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...) 

11
 
 

review 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 adverse 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 review with the commissioner. . . . 

(2) Not later than 5 business days after the date of receipt of a 

request for an external review, the commissioner shall 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 service . . . reasonably appears to 

be a covered service under the covered person’s health benefit plan. 

(c) Whether the covered person has exhausted the health 

carrier’s internal grievance process . . . . 

(d) The covered person has provided all the information and 

forms required . . . . 

(e) Whether the health care service . . . appears to involve 

issues of medical necessity or clinical review criteria. 

(...continued) 

333.21098), which had previously regulated HMOs; brought HMOs under the 

authority of the OFIS commissioner by adding chapter 35, entitled “Health 

Maintenance Organizations” to the Insurance Code; and amended MCL 500.2213 

to provide that HMOs must establish an internal review procedure and that 

insurers must notify insureds of the right to independent review under PRIRA. 

2000 PA 253 (SB 1211) amended MCL 333.20106, MCL 333.20124, MCL 

333.20161, and MCL 333.22205 of the Public 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 independent external review under PRIRA. 

12
 
(3) Upon completion of the preliminary review under 

subsection (2), the commissioner immediately shall provide a written 

notice . . . as to whether the request is complete and whether it has 

been accepted for external review. 

(4) If a request is accepted for external review, the 

commissioner shall do both of the following: 

(a) Include in the written notice under subsection (3) a 

statement that the covered person . . . may submit to the 

commissioner . . . additional information and supporting 

documentation that the reviewing entity shall consider when 

conducting the external review. 

(b) Immediately notify the health carrier in writing of the 

acceptance of the request for external review. 

(5) If a request is not accepted for external review because the 

request is not complete, the commissioner shall inform the covered 

person . . . what information or materials 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 the reasons for its nonacceptance. 

(6) If a request is accepted for external review and appears to 

involve issues of medical necessity or clinical review criteria, the 

commissioner shall assign an independent review organization . . . . 

The assigned independent review organization 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 contractual provisions of 

a health benefit plan, such as covered benefits or accuracy of coding, 

the commissioner may keep the request 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 decision . . . within the same time 

limits and subject to all other requirements 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 

13
 
request does appear to involve 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 carrier’s internal 

grievance process. 

(9) Not later than 7 business days after the date of the notice 

under subsection (4)(b), the health carrier . . . shall provide . . . the 

documents and any information considered in making the adverse 

determination . . . . 

(10) Upon . . . notice from the assigned independent review 

organization that the health carrier . . . has failed to provide the 

documents and information within 7 business days, the 

commissioner may terminate the external review and make a 

decision to reverse the adverse 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 pertinent medical records. 

(b) The attending health care professional’s recommendation. 

(c) Consulting reports from appropriate health care 

professionals and other documents submitted by the health carrier, 

the covered person, the covered person’s authorized 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 practice guidelines, which may 

include generally accepted practice guidelines, evidence-based 

practice guidelines, or any other practice guidelines developed by 

14
 
the federal government or national or professional medical societies, 

boards, and associations. 

(f) Any applicable clinical review criteria developed and used 

by the health carrier or its designee utilization review organization. 

(14) The assigned independent review organization shall 

provide its recommendation to the commissioner not later than 14 

days after the assignment by the commissioner of the request for an 

external review. The independent review organization shall include 

in its recommendation all of the following: 

(a) A general description of the reason for 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 documentation, including 

the practice guidelines, considered in reaching its recommendation. 

(15) Upon receipt of the assigned independent 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 provide written notice . . . to the 

covered person . . . and the health carrier of the decision to uphold or 

reverse the adverse determination . . . not later than 7 business days 

after the date of receipt of the selected independent review 

organization’s recommendation. . . . The commissioner shall include 

in a notice under this subsection all of the following: 

(a) The principal . . . reasons for the decision . . . . 

15
 
 

(b) If appropriate, the principal . . . reasons why the 

commissioner did not follow the 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 permitted to submit “additional information and 

supporting documentation,” MCL 550.1911(4)(a), and the health carrier is 

required to submit “the documents and any information 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 “involve[s] issues of medical 

necessity or clinical review criteria,” 7

 the commissioner must assign an IRO to 

conduct the external review, MCL 550.1911(6). IROs conduct their external 

reviews through clinical peer 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, and practice guidelines used by a health 

carrier to determine the necessity and appropriateness of health care services.” 

MCL 550.1903(f). 

8

 MCL 550.1919(2) provides in relevant part: 

A clinical peer reviewer . . . shall be a physician or other 

appropriate health care professional who meets all of the following 

minimum qualifications: 

(continued...) 

16
 
 

reaching 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 550.1911(6). This recommendation must be 

provided within 14 days of receiving 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 person’s health benefit plan with the health carrier, 

MCL 550.1911(15). The commissioner has seven days to decide whether to 

uphold or reverse the health carrier’s decision, MCL 550.1911(16). The 

commissioner must provide the reasons for his or her decision, including the 

reasons why he or she decided not to follow the IRO’s recommendation, MCL 

(...continued) 

(a) Is an expert in the treatment of the covered person’s 

medical condition that is the subject of the external review. 

(b) Is knowledgeable about the recommended health care . . . 

treatment because he or she devoted in the immediately preceding 

year a majority of his or her time in an active clinical practice within 

the medical specialty most relevant to the subject of the review. 

(c) Holds a nonrestricted license . . . and, for physicians, a 

current certification by a recognized American medical specialty 

board in the . . . areas appropriate to . . . the external review. 

(d) Has no history of disciplinary actions . . . that raise a 

substantial question as to the clinical peer reviewer’s physical, 

mental, or professional competence or moral character. 

17
 
 

550.1911(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 Appeals neither defined the term 

“recommendation” nor considered the significance 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, introduce, or propose (an idea, plan, person, 

etc.) for consideration, possible action, or some purpose or use.” Id. Clearly, to 

make a “recommendation” means to suggest or propose something; 

“recommendation” is not a word that connotes mandatory compliance. Nowhere 

9

 MCL 550.1915(1) provides in relevant part: “An external review decision 

and an expedited external review decision 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 provision that grants an 

IRO comparable authority. Thus, Justice Kelly’s application of the doctrine of 

expressio unius est exclusio alterius is unpersuasive because it leads to an 

interpretation that is contrary to the unambiguous language of the statute. See 

Luttrell v Dep’t of Corrections, 421 Mich 93, 107; 365 NW2d 74 (1984). 

18
 
 

in 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 suggestion is reinforced by MCL 

550.1911(16)(b), which expressly allows the commissioner 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 acted in an arbitrary and 

capricious manner when she 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-network facility, and (3) Ross was not stabilized before 

November 17, 2002.” Post at 12. We disagree that the IRO concluded that Ross 

was not stabilized. The term “stabilization,” 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 summary 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 deterioration in the patient’s condition 

resulting from or occurring during transfer. We emphasize that the only period for 

which the IRO specifically indicated that it was not medically feasible to transfer 

Ross was from July 8, 2002, to July 23, 2002, even when specifically asked at 

what point Ross was stabilized for transfer. With respect to the subsequent 

periods, the IRO merely characterized the possibility of a transfer as improper. 

The IRO’s rationale for finding that transfer was improper was not because Ross’s 

medical condition would likely have deteriorated during transfer (the standard 

required under MCL 500.3406k), but because it would have been inappropriate to 

“unbundle” the remaining care. Thus, Justice Kelly’s characterization of the 

IRO’s finding—that Ross was not stabilized before November 17—is faulty. 

Nevertheless, had the IRO found on these facts that Ross was not stabilized before 

November 17, i.e., that his condition was likely to deteriorate if he was transferred, 

such a finding would itself have been arbitrary and capricious, and, if the 

commissioner had blindly accepted such a finding, the commissioner’s actions 

(continued...) 

19
 
 

In the only Michigan case before this one to address PRIRA, English, the 

Court of Appeals likewise noted that an IRO’s recommendation 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 recommendation, 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 know 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 due process had been 

denied, the evidence was unknown to the parties, while in English, the IRO’s 

recommendation was not evidence, but was merely a tool to aid the commissioner, 

and the recommendation was not binding on the commissioner. Id. at 464. 

The Court of Appeals in the instant case declared that this statement in 

English did not bind the Court because whether an IRO’s recommendation was 

binding on the commissioner 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 statement in the first place, 

which was to distinguish the cases cited by Blue Cross in support of its argument 

(...continued) 

would likewise have been arbitrary and capricious. However, according to Justice 

Kelly’s reasoning, this is exactly what the commissioner would be required to do. 

20
 
on denial of due process, an issue that most certainly was before 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 that an IRO’s recommendation is not binding on the 

commissioner is clearly not dictum. Instead, it was one of the reasons that the 

panel held that PRIRA did not violate the parties’ due process rights. When 

necessary to determine an issue 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 OFIS Commissioner would 

review the IRO’s recommendation for 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 findings. Instead, the language of 

PRIRA indicates that the Legislature intended the OFIS 

Commissioner to defer to the IRO’s recommendation on medical 

issues that do not implicate the language 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 would be the final authority on issues of medical or 

clinical-review criteria, while the commissioner would be the ultimate authority on 

purely contractual issues. Such a construction was not supported by the plain and 

unambiguous language of the act itself. Given the all-encompassing, 

21
 
comprehensive scheme set forth in PRIRA, the absence of such a bifurcated 

review process in the statute convincingly demonstrates that the Legislature did 

not intend that the review authority be bifurcated. In fact, as previously noted, the 

opposite intent is demonstrated by the frequent use of the term “recommendation,” 

as well as by MCL 550.1911(16)(b), which provides that 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 purely contractual issues over which the 

commissioner has sole authority. Similarly, the Legislature has treated medical 

issues as implicating contractual matters also and has not established that the 

commissioner’s authority is different. That is, the commissioner has identical 

authority over both contractual and medical issues. The Court of Appeals failed to 

recognize this and erred in concluding that “medical issues” were to be treated 

differently. The act provides for no such 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 commissioner’s determination was consistent with the 

IRO’s recommendation to the extent that the recommendation did not contradict 

22
 
 

the policy provisions or MCL 500.3406k.12 The only period for which the IRO 

stated that it was not medically feasible—the standard required in the policy—to 

12 Justice Kelly asserts that the only reasonable way to read the IRO’s 

response to the commissioner’s last request for clarification is that the IRO 

concluded that “Ross was necessarily not ‘stabiliz[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 IRO concluded that Ross was not stabilized before 

November 17, 2002. Again, this requires us to include the relevant question from 

the commissioner’s January 26, 2005, clarification request and the IRO’s March 9, 

2005, response to that question in their entirety: 

[Q.] The Michigan statute governing emergency health 

services, MCL 500.3406k, requires coverage for “medically 

necessary services” to the insured “for the sudden onset of a medical 

condition that manifests itself by signs 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 dysfunction of any bodily organ or part.” The 

statute further provides that “an insurer shall not require a physician 

to transfer a patient before the physician determines that the patient 

has reached the point of stabilization.” Stabilization 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 condition likely result from or occur 

during transfer of [Ross] to a network hospital? What medical 

services were necessary to stabilize [Ross] under the statute’s 

definition of stabilization? 

[A.] This issue was addressed in a conference call on 

Wednesday, February 9, 2005 by Dr. David Sand, Medical Director, 

Permidion. [Ross] had methicillin-resistant Staphylococcus aureus 

septicemia following his DT-PACE chemotherapy. The University 

Hospital of Arkansas discharge summary dictated September 15, 

2002 documents [Ross’s] clinical status from August 16, 2002 

through September 9, 2002. [Ross] could not have been transferred 

or released prior to his discharge date. 

23
 
 

move Ross to an in-network facility was the period from July 8, 2002, to July 23, 

2002, and it was for services provided during this period that the commissioner 

reversed BCN’s denial 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 either the policy or the statute. Those standards were 

that it be medically feasible to move the patient or that the patient be stabilized 

before being moved, respectively. Thus, the IRO’s error was one that involved 

Notwithstanding the fact that the period of August 16, 2002, through 

September 9, 2002, was not 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 unresponsive answers to the commissioner’s increasingly 

more specific questions, which prompted the commissioner to seek clarification of 

the IRO’s recommendation on three separate occasions. Second, it illustrates how 

unreasonable it is to assert that the IRO concluded that Ross was not stabilized 

before November 17, 2002, when 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 should be required to pay for the services, we disagree that 

the only way to read the IRO’s reports 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, 2002, 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 pay for the services regardless of whether they fell 

within the terms of coverage. 

13 The Court of Appeals determination—that the IRO specifically 

concluded it was not medically feasible to transfer Ross before November 17, 

2002, Ross, supra at 379—was clearly in error because it contradicted the IRO’s 

own statements as well as the facility’s July 23, 2002, discharge summary, which 

indicated that Ross was “stable for discharge and outpatient followup . . . .” 

24
 
contractual and statutory construction—error that the commissioner correctly 

rectified. 

IV. CONCLUSION 

Under the PRIRA provisions for an independent external review of an 

adverse determination regarding coverage, an IRO’s recommendation concerning 

whether to uphold or reverse a health carrier’s adverse determination is merely a 

recommendation and is not binding on the commissioner. We reverse the 

judgments of the trial court and the Court of Appeals, which held otherwise, and 

remand the case to the trial court 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 

25
 
 

v 

S T A T E O F M I C H I G A N 

SUPREME COURT 

DESIREE E. ROSS, personal representative 

of the estate of DOUGLAS G. ROSS, 

Petitioner-Appellee, 

No. 131711 

BLUE CARE NETWORK OF MICHIGAN, 

 Respondent-Appellant. 

KELLY, J. (dissenting). 

The majority correctly frames the issue. It is “whether the Commissioner 

of the Office of Financial and Insurance Services (OFIS) is bound by the 

recommendations of an independent review organization (IRO) on issues of 

medical necessity and clinical review.”1

 But the majority errs by deciding that the 

commissioner is never bound by such recommendations. 

I conclude that the commissioner’s review is limited to ensuring 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 Network of Michigan be required 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. 

FACTS

 Respondent insured petitioner’s decedent, Douglas 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 numerous conditions, the most 

serious being a severe form of multiple myeloma.3 

Ross underwent a variety of treatments, including chemotherapy, to combat 

the disease. In May 2002, he was advised to seek treatment from the Bone 

Marrow Transplant Clinic at the University of Michigan (U of M). Unfortunately, 

he was unable to begin treatment at the U of M immediately because his bloodsugar level was elevated. 

By early June, Ross’s multiple myeloma 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 cancer of the plasma cell. See Multiple Myeloma 

Research Foundation, About Myeloma 

<http://www.multiplemyeloma.org/about_myeloma> (last visited January 7, 

2008). 

2
 
no longer treat him. He was advised that the only remaining course of treatment 

was medication to handle the pain as he died. 

In a final effort to prolong Ross’s life, petitioner contacted the University of 

Arkansas for Medical Sciences (UAMS), a leader in the treatment of myeloma. 

Dr. Lutsic had told petitioner that he would pursue this option if he were in the 

same position as Ross. UAMS advised petitioner that it had successfully treated 

the condition that Ross had, but, if he were to have any chance of survival, he 

would have to start treatment promptly. Ross immediately requested a referral to 

UAMS, which was not an in-network provider. Respondent told 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 death 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 respondent that, without treatment, Ross had 

only days to live. Ross’s certificate of coverage included medically necessary 

services without prior authorization in cases of immediate and unforeseen medical 

emergency. This coverage was available until it became medically feasible to 

transfer the covered person to an in-network provider. Nonetheless, respondent 

3
 
 

informed UAMS that it intended 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, Ross was discharged. Ross continued 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 died on April 6, 2003, at 46 years of age. 

In regards to Ross’s insurance claims, respondent categorized UAMS’s 

services into four periods: (1) outpatient facility services 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 initiated an internal appeal 

with respondent. When respondent denied the appeal, Ross took the second step 

in the internal appeal process. 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 OFIS6

 accepted the request and assigned the case to 

Permidion, an independent review organization. The IRO submitted its initial 

4

 OFIS is now the Office of Financial and Insurance Regulation, effective 

April 6, 2008. Executive Order No. 2008-2. 

5

 MCL 550.1901 et seq. 

6

 The commissioner in this case was Linda A. Watters. 

4
 
decision 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 also concluded that the treatment 

provided was not experimental or investigational. 

The commissioner asked the IRO for clarification in July 2003. She asked 

the IRO to consider four periods of care: (1) the June 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 that the commissioner had 

specifically asked it to review “whether each of the . . . four episodes meet[s] the 

criteria for emergency care under 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-network facility.” 

The IRO determined that it did not have the information 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 emergency care and that it would have been 

improper to have transferred Ross to another facility because the “patient required 

ongoing treatment for a period of time under the supervision of his treating 

physician and it would have been inappropriate for the patient to receive treatment 

elsewhere.” Accordingly, the IRO recommended that respondent’s denial be 

reversed. 

5
 
 

The commissioner requested even more review in October 2004. The 

October 2004 request was almost identical to the July 2003 request, and the IRO 

responded in kind. Specifically, the IRO reiterated its conclusion that the initial 

treatment constituted emergency services due to lack of a reasonable alternative at 

an in-network facility. It also again concluded that Ross “required ongoing 

treatment for his condition at a center that 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 been in an acute medical 

state in June 2002 and to clarify when Ross 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, nearly two years after petitioner requested external 

review, the commissioner issued her decision. 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 commissioner upheld respondent’s 

denial of coverage with respect to the remainder of UAMS’s services. 

6
 
 

 

Petitioner filed an appeal in the Wayne Circuit Court. The circuit court 

reversed the commissioner’s decision and ordered respondent to pay for all the 

services rendered by UAMS. The circuit judge reasoned that, because the 

commissioner had concluded that the July 8 to July 23 hospitalization constituted 

emergency services, all the services that UAMS provided 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 for services rendered after November 17, 

2002, because the commissioner had not addressed these services.8

 But the Court 

affirmed with respect to services provided before November 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 

THE PATIENT’S RIGHT TO INDEPENDENT REVIEW ACT 

This case requires us to consider the final decision of an administrative 

agency and the correct interpretation of a statute. Issues 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. 

7
 
 

are reviewed de novo.11 In cases where no hearing is required, final decisions of 

administrative agencies are reviewed to determine whether 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 authority or jurisdiction of the 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 individual believes that a health-care coverage 

determination is incorrect, he or she has the right to request an independent 

review.14 When the commissioner accepts a request for external 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 materials and recommend either upholding or 

reversing the earlier determination.16 Upon receipt of the recommendation, the 

commissioner is authorized to review the IRO’s recommendation “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 Michigan 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). 

8
 
 

 

is not contrary to the terms of coverage under the covered person’s health benefit 

plan with the health carrier.”17 

Accordingly, under PRIRA, if a case accepted for external review involves 

an issue of medical necessity, an IRO must be appointed to make a 

recommendation. The commissioner, however, has the power to review the IRO’s 

recommendation. But that power is not unlimited. The issue here is whether the 

commissioner exceeds her power when she substitutes her opinion for the 

conclusion of the IRO on issues that require the exercise of medical judgment. 

For many years, this Court has recognized the maxim expressio unius est 

exclusio alterius.

18 This maxim says that the “express 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 legislators are fully aware the courts will utilize 

it when construing their words. Accordingly, 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 implicitly barred the 

commissioner from reviewing 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 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 findings. Instead, the 

language of PRIRA indicates that the Legislature intended the OFIS 

Commissioner to defer to the IRO’s recommendation on medical 

issues that do not implicate the language of the health plan itself.[20] 

Thus, the commissioner is specifically authorized to review the IRO’s 

recommendation to ensure that it is not contrary to the “terms of coverage.” In 

this respect, the recommendation is not binding. But the commissioner is not 

allowed to substitute her lay opinion for 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 contrary to the language of the statute. 

The majority claims that I fail to recognize that the commissioner is given the 

power to uphold or reverse an adverse determination whereas the IRO is not. 

What the majority overlooks is that the commissioner’s power to review the IRO’s 

recommendation is limited to “ensur[ing] that it is not contrary to the terms of 

coverage . . . .” Thus, the commissioner is authorized to reject the IRO’s 

recommendation only if it is contrary to the terms of coverage. It necessarily 

follows that the commissioner 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 interpretation that is contrary to the language of the 

statute, not mine. 

The interpretation of the statute advanced by the members of the majority is 

another example of their belief that the answer to all questions of statutory 

interpretation lies in a dictionary. As a result of this belief, they focus on the 

dictionary definition of the 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 majority defines the word “recommendation,” the 

commissioner exceeds the scope of her power when she performs an act that she is 

not empowered to do. As I have explained, PRIRA gives the commissioner the 

power to review the recommendation solely to ensure that it is not contrary to the 

terms of coverage. 

10
 
Therefore, in order to determine whether the commissioner exceeded the scope of 

her powers in this case, it is necessary to examine the “terms of coverage.” 

Here, the IRO’s recommendation was consistent with the terms of 

coverage. Ross’s health-benefit plan covered services in cases of immediate and 

unforeseen medical emergency until such time as it was medically feasible to 

transfer him to an in-network provider. The IRO concluded that Ross’s initial 

treatment was a medical emergency. It also found that Ross “required ongoing 

treatment for a period of time under the supervision of his treating physician and it 

would have been inappropriate for [Ross] to receive treatment elsewhere.” 

Also, as recognized by the Court of Appeals, 

[respondent’s] schedule of benefits provides that respondent will 

provide treatment for “medical emergenc[ies].” The schedule of 

benefits also provides coverage for related medically necessary 

services and related ancillary services. The IRO specifically 

concluded that Ross’s initial evaluation from June 30, 2002, until 

July 7, 2002, and his hospitalization of July 8 to 23, 2002, both 

constituted emergency services. 

Further, as recognized by the OFIS Commissioner in her final 

opinion and order, Michigan law requires a health maintenance 

organization certificate, which otherwise provides coverage for 

emergency health services, to 

“provide coverage for medically necessary services provided to an 

insured for the sudden onset of a medical condition that manifests 

itself by signs 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 dysfunction of any 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 payment for emergency health services up to 

11
 
 

the point of stabilization provided to an insured under this subsection 

because of either of the following: 

“(a) The final diagnosis. 

“(b) Prior authorization was not given by the insurer before 

emergency health services were provided. [MCL 500.3406k(1).]” 

MCL 500.3406k(1) goes on to define “stabilization” 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 sufficiently stabilized and because his follow-up 

treatments at the Arkansas facilities were medically necessary.[22] 

In summary, the plan covered medical emergencies up to the point where it 

was medically feasible to transfer the patient to an in-network facility. Michigan 

law also requires coverage for emergency health services until stabilization. The 

IRO determined that (1) the initial treatment was a medical emergency, (2) it was 

not appropriate to transfer Ross to an in-network facility, and (3) Ross was not 

stabilized before November 17, 2002.23 Therefore, the IRO’s recommendation 

22 Ross, 271 Mich App 378-379 (citations omitted). 

23 The majority claims that the IRO 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 specifically asked the IRO to consider whether 

Ross was stabilized as provided 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 for the services: Ross 

was necessarily not “stabiliz[ed]” for transfer as that term is defined by MCL 

500.3406k(2). 

It seems to me that the majority’s problem with the IRO’s recommendation 

can be boiled down to two points. The first lies in the language that the IRO used 

in its reports. The majority goes so far as accusing the IRO of responding to the 

(continued...) 

12
 
 

that respondent be ordered to pay for the services was consistent with the terms of 

coverage.

24 For this reason, the commissioner’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 allowing the commissioner to substitute her opinion for the 

conclusions of the IRO on issues requiring 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 lawyers, 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 language that is used to understand what the IRO was really 

saying. The commissioner repeatedly cited the relevant standards and asked the 

IRO to reevaluate its conclusion that respondent be required to pay for the 

services. Repeatedly, the IRO concluded that respondent should be required to 

pay for the services at issue. The commissioner made repeated requests citing the 

relevant standards and the IRO repeatedly replied that respondent should be 

required to pay for the services. Everything considered, the only way to read the 

IRO’s reports is to find that the IRO concluded 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 majority to make this assumption. This faulty assumption 

lies at the heart of the majority’s decision. 

24 An example of a recommendation that would be contrary to the terms of 

coverage would be an IRO’s determination that mental-health services were 

medically necessary when the plan excluded coverage for mental-health services. 

In such a situation, the commissioner could reject the recommendation because the 

plan did not cover mental-health services. 

13
 
 

is not a physician.25 Her expertise is banking. By contrast, for an IRO to be 

approved, the IRO and its physicians must meet certain standards designed to 

ensure quality and credentials.26 The commissioner is not a doctor, whereas the 

IRO is made up of very well-qualified doctors. I do not see how the 

commissioner’s decision to reject the IRO’s medical conclusions in favor of her 

own uneducated opinion is anything other than arbitrary 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-certified in internal 

medicine, medical oncology, and hematology, concluded that Ross’s initial 

evaluation constituted emergency services. The physician also concluded 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 could have been 

transferred to an in-network facility. Ross’s health plan covered medical 

emergencies until it was medically feasible to transfer him to an in-network 

provider. Michigan law also provides that “[a]n insurer shall not deny payment 

for emergency health services up to the point of stabilization . . . .”28 It follows 

25 MCL 500.202 sets forth the qualifications 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). 

14
 
 

that respondent was required to pay for the services provided through November 

17, 2002.29 

Yet the commissioner found that only the July 8 to July 23, 2002, services 

were covered. In so doing, she necessarily rejected the medical findings of the 

IRO in favor of her own uneducated opinion. Not only was there no medical 

evidence supporting her decision, she is completely unqualified to offer a medical 

opinion. There could be no clearer example of an arbitrary and capricious 

decision.30 

CONCLUSION 

As the Court of Appeals recognized, the commissioner exceeds the scope of 

her power when she substitutes her opinion for the conclusion of an IRO on issues 

29 The majority claims that “the commissioner’s determination was 

consistent with the IRO’s recommendation to the extent that the recommendation 

did not contradict the 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 that a conclusion that Ross was not 

stabilized for transfer is arbitrary and capricious, given that UAMS discharged 

Ross on July 23, 2002. But the fact that Ross was discharged does not 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 such conclusions, the majority’s suggestion 

that the IRO’s conclusion was arbitrary and capricious is preposterous. 

In addition, there is no evidence that the services Ross required were 

offered by an in-network provider. Without proof that an in-network provider 

offered the requisite services, it is impossible to conclude that transfer would have 

been appropriate. 

15
 
 

 

that require the exercise of medical judgment. This result is not only mandated by 

the statutory language, it is also necessary to avoid allowing the commissioner, a 

banker, to make medical decisions. Accordingly, 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