OGC Opinion No. 04-02-30: Utilization Review, Clinical Peer Reviewer

OGC Op. No. 04-02-30

The Office of General Counsel issued the following opinion on February 27, 20004, representing the position of the New York State Insurance Department.

Re: Utilization Review, Clinical Peer Reviewer

Issue

May a pharmacist serve as a clinical peer reviewer, as that term is defined in New York Insurance Law Article 49 (McKinney 2000) and New York Public Health Law Article 49 (McKinney 2002)?

Conclusion

A pharmacist may not serve as a clinical peer reviewer.

Facts

The inquirers firm represents a health plan, which is a health service corporation holding a license from the Department pursuant to New York Insurance Law § 4302 (McKinney 2000) and which also operates as lines of business several health maintenance organizations with Certificates of Authority from the Health Department pursuant to New York Public Health Law § 4403 (McKinney 2002). While the insured involved in this particular inquiry is covered under an indemnity product, the issue also affects the Health Plans HMOs.

The insureds contract, which covers medically necessary prescription drugs, excludes "drugs that are prescribed or dispensed for cosmetic purposes, such as hair growth or removing wrinkles." Based upon that contractual language, the health plan denied coverage for Glyquin XM. The health plans determination was based upon a publication of its Pharmacy & Therapeutic Committee, which included the drug within those that are "Cosmetic Oriented" and described the drug as one to "reduce discoloration or to deepen skin color." The initial denial indicated that a clinical pharmacist had made the decision.

The insured appealed the initial determination and furnished information from her physician in support of her appeal. The health plan denied the appeal and in support of its determination indicated:

A registered pharmacist reviewed the information provided by [Treating Physician]. According to Corporate Medical Policy, services are eligible for coverage when used to treat abnormal structures of the body caused by congenital anomaly, developmental abnormalities, trauma, infection, tumors, or disease. They are intended to improve or restore function. Cosmetic services are those that reshape normal structures of the body in order to improve the patients appearance or self-esteem.

The insured submitted a complaint to the Departments Consumer Services Bureau (Bureau) and indicated that the drug had been prescribed by her physician to alleviate a skin condition caused as a result of treatment for separate medical conditions. She continued that the health plan had previously covered laser abrasions for her skin condition. She lastly indicated that the health plans refusal to cover the drug resulted in her having to apply a large amount of makeup to conceal her skin condition.

A copy of the complaint was furnished to the health plan, which indicated that, based upon the material contained in the complaint to the Bureau, the health plan would conduct another internal appeal. The health plan subsequently reiterated its initial denial of the appeal and repeated the above quoted language. The second denial was forwarded to the Bureau with a covering letter that stated:

Two appeals were conducted for [Insured] regarding our Plans denial of the prescription drug Glyquin XM. The second appeal was conducted based on review of [Insureds] complaint to the Department. We wanted to ensure that her issues were addressed. The issue to which [Insureds] complaint refers is the fact that her condition... was brought on by treatment with prescription drugs for [separate medical conditions]. The initial appeal did not specifically address a "drug induced [dermatological condition]". Both formal appeals that were conducted upheld our Plans initial determination. Each pharmacist who reviewed the information determined that the condition does not cause an impairment of daily living.

Upon receipt of the health plans correspondence, the Bureau contacted the health plan, stated that the review was not conducted in compliance with New York Insurance Law Article 49, and thus requested that the matter be reviewed by a clinical peer reviewer. The health plan responded that it considered the pharmacists that had participated in the insureds appeal to be qualified clinical peer reviewers and concluded:

The pharmacists that reviewed this case are therefore clinical peer reviewers because they are 1) licensed health care professionals and (2) are in the same or similar specialty as the pharmacists that provide the prescription drug at issue. This result is consistent with our understanding of how the industry applies the clinical peer reviewer definition and is also consistent with NCQA [National Council on Quality Assurance] requirements.

The Bureau replied to the health plan that it is the Departments position that the pharmacist merely fills the prescription and does not exercise independent judgment. The Bureau concluded that an appropriate clinical peer reviewer would be a physician, since it was a physician that prescribed the drug. The inquirer responded to the Bureau and argued that:

When a health insurer denies coverage of a prescription drug on the basis that the drug is not medically necessary, a pharmacist can act as a clinical peer reviewer. Clearly, a pharmacist is a licensed health care professional. In addition, a pharmacist is in the same profession as the provider who provides the service at issue- in this case, a prescription drug.

It appears that the Consumer Services Bureau, uncomfortable with a pharmacist acting as a clinical peer reviewer, is engaged in a tortured interpretation of the law in order to get to a desired result... Consumer Services interpretation is clearly flawed. The service provided to the patient is the dispensing of a prescription drug. The writing of the prescription is not the issue. A health insurer does not deny or approve the writing of a prescription, but rather denies or approves the dispensing of a drug.

From a public policy standpoint, some people feel that only a physician should make a determination as to whether a specific drug should be dispensed for a particular patient. While we understand this sentiment, the statute does not support it. Rather, the plain wording of the statute permits a pharmacist to act as a clinical peer reviewer when a health insurer denies coverage of a prescription drug

Analysis

New York Insurance Law § 4900(i) (McKinney 2000) defines:

Utilization review agent means any insurer subject to article thirty-two or forty-three of this chapter performing utilization review and any independent utilization review agent performing utilization review under contract with such insurer.

New York Public Health Law § 4900(9) (McKinney 2002) has a similar definition affecting health maintenance organizations.

New York Insurance Law § 4903(a)(2) (McKinney 2000) provides that only a clinical peer reviewer may render an adverse determination. New York Public Health Law § 4903(1)(b) (McKinney 2002) has a similar provision.

New York Insurance Law § 4900(h) defines:

Utilization review means the review to determine whether health care services that have been provided, are being provided or are proposed to be provided to a patient, whether undertaken prior to, concurrent with or subsequent to the delivery of such services are medically necessary

New York Public Health Law § 4900(8) has a similar definition.

New York Insurance Law § 4900(a) defines:

Adverse determination means a determination by a utilization review agent that an admission, extension of stay, or other health care service, upon review based on the information provided, is not medically necessary.

New York Public Health Law § 4900(1) has a similar definition.

New York Insurance Law § 4900(b) defines:

Clinical peer reviewer means: (1) for purposes of title one of this article [internal utilization review]:... (B) a health care professional other than a licensed physician who: (i) where applicable, possesses a current and valid non-restricted license, certificate or registration or, where no provision for a license, certificate or registration exists, is credentialed by the national accrediting body appropriate to the profession; and (ii) is in the same profession and same or similar specialty as the health care provider who typically manages the medical condition or disease or provides the health care service or treatment under review

New York Public Health Law § 4900(2) has a similar definition.

New York Public Health Law § 4900(f) defines:

Health care professional means an appropriately licensed, registered or certified health care professional pursuant to title eight of the education law or a health care professional comparably licensed, registered or certified by another state.

New York Public Health Law § 4900(6) has a similar definition.

New York Education Law Title VIII (McKinney 2001 and 2004 Supplement) regulates the licensing of a number of professions, including public accountancy. Accordingly, the fact that pharmacists are licensed pursuant to New York Education Law Title VIII through New York Education Law Article 137 (McKinney 2001 and 2004 Supplement) is not determinative of whether pharmacists are health care professionals within the meaning of New York Insurance Law Article 49 or New York Public Health Law Article 49.

The term "health care professional" is not generally defined in New York law. In Education Law § 605(10) (McKinney 2000), authorizing health care professional scholarships, the term is restricted to those who would study medicine or dentistry. In addition, New York Public Health Law § 18 (McKinney 2002), regulating access to patient health care information, imposes restrictions on "health care practitioners", which term includes a number of professions licensed pursuant to New York Education Law Title 8, but not pharmacists. On the other hand, N.Y. Comp. Codes R. & Regs. tit. 8, § 29.3 (2001), generally regulating unprofessional conduct by health care professionals, includes pharmacists within that term.

The Department concludes, therefore, that whether a pharmacist is a health care professional within the meaning of New York Insurance Law Article 49 or New York Public Health Law Article 49 depends on whether the actions of a pharmacist in reviewing submissions for a utilization review agent, such as the health plan, are within the pharmacists scope of practice.

The practice of pharmacy is defined in New York Education Law § 6801 (McKinney 2001):

The practice of the profession of pharmacy is defined as the preparing, compounding, preserving, or the dispensing of drugs, medicines and therapeutic devices on the basis of prescriptions or other legal authority.

This is contrasted with the definition of the practice of medicine, New York Education Law § 6521 (McKinney 2001:

The practice of the profession of medicine is defined as diagnosing, treating, operating or prescribing for any human disease, pain, injury, deformity or physical condition. (Emphasis added.)

Authority to issue prescriptions is conferred upon other professions, including nurse-practitioners, New York Education Law § 6902(3)(b) (McKinney 2001), but not on pharmacists.

Contrary to the inquirers assertion, it is clear that the operative activity covered by New York Insurance Law Article 49 and New York Public Health Law Article 49 is the decision of whether a prescription drug has efficacy for a particular condition and what drug to utilize for best results (a subset of a medical necessity determination), not the ministerial act of dispensing the prescription.

It is recognized that the Commissioner of Education has by regulation, N.Y. Comp. Codes R & Regs. tit. 8, § 63.6(b) (2001), slightly expanded upon the scope of practice of a pharmacist:

(7) Patient medication profile. Each pharmacist shall maintain a patient medication profile. Such medication profile shall include, but not be limited to, the patient's name, address, telephone number, gender, date of birth or age, known allergies and drug reactions, chronic diseases, a comprehensive list of medications and relevant devices and other information reported to the pharmacist appropriate for counseling an individual regarding use of prescription and over-the-counter drugs Such review shall include screening for potential drug therapy problems due to therapeutic duplication, drug-drug interactions, including serious interactions with over-the-counter drugs, incorrect drug dosage or duration of drug treatment, drug-allergy interactions, and clinical abuse or misuse

(8) Counseling. (i) On-premises delivery. For a prescription that is delivered to a patient or a person authorized to act on behalf of the patient on the premises of the pharmacy, the pharmacist or pharmacy intern shall meet the requirements of this subparagraph (a) Prior to dispensing a prescription for the first time for a new patient of the pharmacy or a prescription for a new medication for an existing patient of the pharmacy and/or a change in the dose, strength, route of administration or directions for use of an existing prescription previously dispensed for an existing patient of the pharmacy, a pharmacist shall be required to personally counsel each patient or person authorized to act on behalf of a patient who presents a prescription in person in a face-to-face meeting whenever practicable, or by telephone, matters which in the exercise of the pharmacist's or pharmacy intern's professional judgment, the pharmacist or pharmacy intern deems appropriate, which may include: (1) the name and description of the medication and known indications; (2) dosage form, dosage, route of administration and duration of drug therapy; (3) special directions and precautions for preparation, administration and use by the patient; (4) common severe side or adverse effects or interactions and therapeutic contraindications that may be encountered, including their avoidance, and the action required if they occur; (5) techniques for self-monitoring drug therapy

This Office further recognizes that a pharmacist may be held liable for filling a prescription as written, if the pharmacist has knowledge, through the patient medication profile, that the drug is contraindicated. Hand v. Krakowski, 453 N.Y.S. 2d 121 (3d Dept. 1982). This is far removed from making a determination as to medical necessity.

The circumstances when a pharmacist may deviate from the prescription of a physician or other qualified professional are set forth in New York Education Law § 6816-a(1) (McKinney 2001):

A pharmacist shall substitute a less expensive drug product containing the same active ingredients, dosage form and strength as the drug product prescribed, ordered or demanded, provided that the following conditions are met: (a) The prescription is written on a form which meets the requirements of subdivision six of section sixty-eight hundred ten of this article and the prescriber does not prohibit substitution and (b) The substituted drug product is contained in the list of drug products established [by the Commissioner of Health] pursuant to paragraph (o) of subdivision one of section two hundred six of the public health law; and (c) The pharmacist shall indicate on the label affixed to the immediate container in which the drug is sold or dispensed the name and strength of the drug product and its manufacturer unless the prescriber specifically states otherwise. The pharmacist shall record on the prescription form the brand name or the name of the manufacturer of the drug product dispensed.

Based upon the statutes and regulations regulating the practice of pharmacy, this office is of the opinion that, while a pharmacist may, because of knowledge of drug interactions, have the competence to evaluate drug interactions and may, based upon such evaluation, recommend to a patient or prescriber that a prescription should not be filled as issued, the pharmacist may not, except under the limited circumstances mandated by New York Education Law § 6816-a, dispense a drug other than as properly directed. Nor may a pharmacist determine whether a drug is medically necessary. It is the further opinion of this Department, subject to confirmation by the Education Department, that a pharmacist who abrogates to him or herself a determination of medical necessity would be practicing beyond the authorized scope of the profession, as proscribed by New York Education Law § 6509(2) (McKinney 2001).

While the inquirer confirmed in a January 30, 2004 telephone conversation with this office that the determination in the case of the insured was made by an ordinary pharmacist, in the inquirers January 28, 2004 letter the inquirer stated that the health plans pharmacists work under the direction of a Ph.D. in Pharmacology. "Pharmacology" is defined, American Heritage Dictionary of the English Language, 4^th Edition (2000):

(1) The science of drugs, including their composition, uses and effects. (2) The characteristics or properties of a drug, especially those that make it medically effective.

While the pharmacologist may be more qualified than an ordinary pharmacist to opine on drug interactions, such an individual is not, by virtue of his or her degree, a licensed professional. Nor would such an individual be any more qualified than a pharmacist would be to opine on the issue of medical necessity.

Based upon the above, this office concludes that the request by the Bureau that the entire issue be reviewed by a physician was in accordance with New York Insurance Law Article 49 and New York Public Health Law Article 49.