OGC Op. No. 07-05-05

The Office of General Counsel issued the following opinion on May 9, 2007, representing the position of the New York State Insurance Department.

Re: Article 49 External Review Standards

Question Presented:

What documentation is needed to overcome an external appeal agent’s decision to uphold an adverse determination based on "off-label" use of prescribed medication?


Article 49 of the Insurance Law sets forth the general standards applicable to external appeals of final adverse determinations. In order to offer as much guidance to as possible, specific sections of that article are highlighted below.


The inquirer reports that his/her organization represents patients with chronic illnesses in insurance disputes, including external appeals. The inquirer states that in the past year he/she has noticed that insurers have increased their denials of coverage for patients in situations where the medications involved are prescribed for "off-label" uses. The inquirer defines the term "off-label" use as a use other than the use for which the Food and Drug Administration has approved the medication in question.

The inquirer asserts that in at least two instances, external appeals of denials for "off-label" uses were sustained by external appeal agents without a clear explanation. The inquirer does not seek review of those past decisions; rather, he/she asks for a ruling as to what steps the organization may take in the future to defeat a denial of coverage based on "off-label" uses.


N.Y. Ins. Law § 4910 (McKinney 2006) establishes an insured’s right to external appeal of final adverse determinations by health plans. As a preliminary matter, the term "off-label" is not a term that is used or defined in the Insurance Law. By the inquirer’s definition, however, we have assumed the use of that term to refer to medications that are deemed "experimental or investigational" in nature. Specifically, Insurance Law § 4910(b) provides for an external appeal right when an insurer denies coverage for a benefit based on the theory that the drug, procedure or service is not medically necessary, or is experimental or investigational in nature. When a health plan denies treatment on either of these bases, Article 49 of the Insurance Law1 provides the insured, the insured’s designee, and in cases of a retrospective adverse determination, the insured’s health care provider, the right to request an external appeal.

The standards for an external appeal agent’s review of a health plan’s denial are set forth in Insurance Law § 4914. Pursuant to Insurance Law § 4914(b)(1), external appeal requests must be initiated by the insured within 45 days from the health plan’s final adverse determination. The Superintendent reviews external appeal requests for eligibility and completeness, and randomly assigns the requests to one of three certified external appeal agents, who have networks of clinical peer reviewers available to review the appeal. See also N.Y. Comp. Codes R. & Regs. tit. 11, Part 410 (2001) (Regulation 166).

The external appeal standards differ depending upon the basis of the health plan’s denial. Specifically, when a health plan has denied treatment on the basis of medical necessity, Insurance Law § 4910(b)(1) requires that the external appeal agent consider: the clinical standards of the plan; the information provided concerning the patient; the attending physician’s recommendation; and the generally accepted practice guidelines developed by the federal government, national or professional medical societies, boards and associations. The external appeal agent must then render a determination as to whether the health plan acted reasonably, with sound medical judgment, and in the best interest of the patient.

When a health plan has denied treatment because the plan considers it to be experimental or investigational, Insurance Law § 4910(b)(2)(B) provides that in order for an insured to be eligible for an external appeal, an insured’s attending physician must attest that the insured has a life-threatening or disabling condition or disease for which standard health services have been ineffective or medically inappropriate, or for which there does not exist a more beneficial standard health service. In addition, the insured must show that his or her attending physician recommended a treatment that, based on two documents from the available medical and scientific evidence, is likely to be more beneficial than any standard treatment. See Ins. Law § 4910(b)(2)(C). An external appeal agent then must review the applicable medical and scientific evidence, the insured’s medical record, and any other pertinent information, and make a determination as to whether the treatment is likely to be more beneficial than any standard treatment for the insured’s life-threatening or disabling condition or disease pursuant to Insurance Law 4914(b)(4)(B).

Please note that each external review appeal, while undertaken in accordance with the statutory parameters discussed above, is fact-specific, and turns on the specific medical condition and patient involved.

For further information you may contact Associate Attorney D. Monica Marsh at the New York City Office.

1  Article 49 of the Public Health Law provides identical external appeal rights for subscribers of HMOs.