OGC Op. No. 10-12-03
The Office of General Counsel issued the following opinion on December 3, 2010 representing the position of the New York State Insurance Department.
Re: Defining “Enteral Formula”
1. Does N.Y. Ins. Law § 4303(y) (McKinney 2006), which mandates coverage for “enteral formula,” include orally administered formula?
2. Is the CaminoPro drink, a protein product used to treat Phenylketonuria (“PKU”), a modified solid food as characterized by the Plan?
1. Yes. The term “enteral formula”, used in Insurance Law § 4303(y), includes orally administered formula.
2. No. The CaminoPro drink is an enteral formula rather than a modified solid food.
The New York Insurance Department’s Consumer Service Bureau (“CSB”) received a complaint from an insured under the Plan. The insured reports that she was diagnosed at birth with a rare metabolic condition called Phenylketonuria (“PKU”). She reports that in order to sustain a healthy life, an individual with PKU must find a source of digestible protein while simultaneously avoiding foods that contain the amino acid phenylalanine. Previously, the insured received her required protein intake via 120 capsules taken daily, which was covered by the Plan. In 2009, the insured switched from the pill formula, Phlexy-10 capsules, to CaminoPro drinks. Under the new prescription, the insured obtains her 45 grams of daily recommended protein by drinking three (15 gram protein) 140 ml formula pouches per day.
The Plan refuses to cover the CaminoPro drink as an enteral formula, claiming it is a modified solid food. The insurance policy has a $2,500 maximum for modified solid food products and will not reimburse the CaminoPro drink beyond the benefit maximum. Although the policy does not provide a definition, the Plan uses the American Society for Parenteral and Enteral Nutrition’s (A.S.P.E.N.) definition of “enteral” nutrition as “feeding provided through the gastrointestinal tract via a tube, catheter, or stoma 1 that delivers nutrition distal to the oral cavity.” 2 The Plan states that since the insured takes CaminoPro drink orally, not via tube, catheter or stoma, it does not qualify as an enteral formula.
To support her complaint, the insured provided the Department with a copy of an Assurance of Discontinuance (“AOD”), issued on May 15, 2006 by the Attorney General (“AG”) of the State of New York. The AOD was in response to a complaint made against Aetna Health Inc., an HMO pursuant to Article 44 of the Public Health Law, for refusing to cover orally administered enteral formula. According to the AG’s findings, Aetna violated Insurance Law §§ 3216(i)(21), 3221(k)(11) and 4303(y), and Executive Law § 63(12) by denying “enteral formula claims, on grounds that the particular formula is not a covered benefit because it is orally administered and not tube fed.” In re Aetna Health Inc. Assurance of Discontinuance ¶ 11(May 15, 2006).
The AOD holds that “[n]either statutes nor their legislative histories define ‘enteral’ or specify whether ‘enteral’ as used in the statute means formulas taken orally or those that are tube-fed.” Id. at ¶8. The AOD states that common definitions of the term “enteral” “do not exclude formulas taken orally [,]” and cites the American Heritage Dictionary of the English Language [4th ed 2001], which states that “‘enteral’ is defined as ‘of, relating to, or being within the intestine.’” Id. at ¶ 9. According to the AOD, the “. . . definition is not limited to nutrition taken either orally or by tube feeding but, on its face, included both.” Id. Although the AOD is not binding on the Insurance Department, it provides guidance as to the Attorney General’s interpretation of the statute.
An analysis of common definitions of the term enteral, applicable statutes and legislative history reveal that a narrow interpretation of the term enteral to exclude orally administered formulas is inconsistent with the legislative intent underlying the statutes.
A. Defining the Term “Enteral”
The first question is whether the New York State Insurance Law includes orally administered formula in the mandated coverage for enteral formula.
The Plan is a municipal cooperative governed under Article 47 of the Insurance Law. According to Insurance Law § 4709(b), 3 “the summary plan description shall be subject to regulation as if it were a health insurance subscriber certificate. . . .” Insurance Law Article 43 regulates insurance contracts issued by not-for-profit health service corporations and HMOs and applies to Article 47 companies. Specifically § 4303(y) is relevant to the inquiry. Although the statute mandates coverage for an enteral formula, it does not provide a definition of the term. It states, in pertinent part, as follows:
Every policy which provides coverage for prescription drugs shall include coverage for the cost of enteral formulas for home use for which a physician . . . has issued a written order . . . . [T]hat the enteral formula is clearly medically necessary and has been proven effective as a disease-specific treatment regimen for those individuals who are or will become malnourished or suffer from disorders, which if left untreated, cause chronic physical disability, mental retardation or death. Specific diseases for which enteral formulas have been proven effective shall include, but are not limited to, inherited diseases of amino acid or organic acid metabolism; Crohn’s Disease; gastroesophageal reflux with failure to thrive; disorders of gastrointestinal motility such as chronic intestinal pseudo-obstruction; and multiple, severe food allergies which if left untreated will cause malnourishment, chronic physical disability, mental retardation or death. Enteral formulas which are medically necessary and taken under written order from a physician for the treatment of specific diseases shall be distinguished from nutritional supplements taken electively. Coverage for certain inherited diseases of amino acid and organic acid metabolism shall include modified solid food products that are low protein, or which contain modified protein which are medically necessary and such coverage for such modified food products for any calendar year or of any continuous period of twelve months for an insured individual shall not exceed two thousand five hundred dollars. 4 [Emphasis added].
Insurance Law § 4303(y) does not use the terms tube-fed, orally, or impose any other limitation on how the formula needs to be administered. Instead, the statute uses the term “taken.” In a prior Office of General Counsel (“OGC”) Opinion, the Department referred to the dictionary definition of “enteral” as meaning “[a] medicinal preparation treated so that it will pass through the stomach unaltered to be disintegrated in the intestines.” See OGC Opinion No. 01-25-22 (May 18, 2001). 5 However, this definition does not specify how a medical preparation must pass through the stomach unaltered.
B. Legislative History
The Plan defines “enteral” formula as feeding provided through the gastrointestinal tract via a tube, catheter, or stoma that delivers nutrition distal to the oral cavity. However, such a narrow interpretation of the term enteral is inconsistent with two separate legislative amendments to Insurance Law §§ 3216(i), 3221(k) and 4303(y), which aimed to broaden the scope of coverage for enteral formulas.
Chapter 380 of the Laws of 1993 added Insurance Law §§ 3216(i), 3221(k) and 4303(u) 6 to mandate coverage of nutritional supplements (formulas) used to treat four metabolic disorders. The 1993 Amendment recognized that several metabolic disorders (such as PKU) can only be treated by restricting problem amino acids and “replenishing them in carefully controlled, measured amounts of a nutritional supplement.” The purpose of the amendment was to minimize “the reluctance of many insurance companies to cover the cost for such formulas” and to eliminate the “random” and “inconsistent interpretation.” See Letter in Support from Gregory Serio, First Deputy Superintendent of the NY Insurance Department (July 1, 1997).
Chapter 177 of the Law of 1997, which again amended Insurance Law §§ 3216(i), 3221(k) and 4303(u), recognized that “in addition to the disorders specified in the [1993 Amendment], there are numerous other diseases and medical conditions which require the use of enteral formulas and food products which are modified to be low in protein.” See New York State Assembly, Memorandum in Support, Insurance – Enteral Formulas, Nutritional Supplements, 220th Sess., at 2170 (N.Y. 1997). This 1997 amendment, which was based on a Massachusetts statute 7 , broadened the scope of disorders for which coverage is required. According to the Massachusetts guidelines for determining the medical necessity for enteral nutrition products, “enteral nutrition is defined as supplemental feeding that is provided via the gastrointestinal tract by mouth (orally), or through a tube, catheter, or stoma that delivers nutrients distal to the oral cavity.” 8 [Emphasis added].
Indeed the 1997 Amendment was proposed partially in response to Evans v. Blue Cross of Rochester Area, Inc., 1996 WL 466531 (Sup. Ct. Albany County Feb 15, 1996) (No. 6844-95, 01-95-044023) which, in an unpublished decision, ordered Blue Cross of Rochester (“Blue Cross”) to provide health insurance coverage to the Evans children for an orally administered formula, known as Neocate. The Evans children suffered from a rare protein allergy, which greatly limited their ability to consume most foods. Blue Cross initially refused to cover the cost of Neocate and would only “pay for the formula if the children were hospitalized and the substance delivered through a nasogastric (NG) tube.” John Caher, Insurer Ordered to Pay for $1,800-A-Month Formula, Alb. Times Union, Feb. 16, 1996, at A1. The Evans decision states, in pertinent part, as follows:
There is no significant evidence in the record that demonstrates that the administration of Neocate is not a cost-effective or feasible health service. Neocate administered at home by Mrs. Evans prevents costly hospital stays. . . . It cannot be said that providing Neocate to the Evans children is not “feasible.” The formula is commercially available at a modest cost and ingested orally by the children. . . .
Evans, 1996 WL 466531, at *3. [Emphasis added]
In light of the above, limiting the definition of the term “enteral formula” to only mean formula administered via tube is inconsistent with relevant case law and the legislative intent underlying the statute. The Plan uses a far too narrow definition of the term “enteral” that runs counter to the goals of the Insurance Law requirements. By restricting coverage of enteral formulas in this manner, the Plan stands in violation of Insurance Law § 4303(y), which does not provide any limitations but by use of the term “taken” evinces an intent to be read broadly on the question of how enteral formula may be administered to patients.
C. Enteral Formula or Modified Solid Food
The second question raised by the inquiry is whether the CaminoPro drink constitutes an enteral formula or modified solid food. The Plan has categorized the CaminoPro drink as a modified solid food rather than an enteral formula. Insurance Law § 4303(y), as set forth above, mandates coverage for modified solid foods but imposes a maximum benefit for modified solid foods of $2,500 per year, whereas it imposes no maximum benefit with respect to enteral formulas. The statute states in relevant part:
[S]olid foods that are low protein, or which contain modified protein which are medically necessary and such coverage for such modified food products for any calendar year or of any continuous period of twelve months for an insured individual shall not exceed two thousand five hundred dollars.
The Healthcare Common Procedure Coding System (HCPCS 9 ) does not list CaminoPro under the modified solid food code. 10 CaminoPro is categorized under the enteral formula code, 11 which states, “Enteral formula, nutritionally complete, for special metabolic needs for inherited disease of metabolism, includes proteins, fats, carbohydrates, vitamins and minerals, may include fiber, administered through an enteral feeding tube, 100 calories= 1 unit.” 12 Although this classification indicates that the enteral formula is administered through an enteral feeding tube, it includes a code modifier. The modifier states “Add the BO 13 modifier in the HCPCS code if the enteral nutrition is being administered orally and is not being administered by a feeding tube.” See N.Y. State Medicaid Program: Enteral Formula Prior Authorization Dispenser Worksheet, http://www.health.state.ny.us/health_care/medicaid/program/update/enteral-dispenserworksheet.pdf (last visited Nov. 12, 2010) [Emphasis added].
The fact that the formula is administered orally does not change its classification as an enteral formula, but simply indicates a modification in how the product is administered. The enteral formula, Neocate, which was mentioned in the AOD and in the Evans case, has a similar HCPCS 14 code as the CaminoPro drink (with the same modifier). 15
In sum, although Insurance Law § 4303(y) does not specifically define the term “enteral formula”, common definitions of the term do not exclude orally administered formulas, but rather include both formulas that are “taken” by mouth as well as tube-fed formulas. Accordingly, the Plan stands in violation of Insurance Law § 4303(y) by restricting coverage to only enteral formulas that are administered via a feeding tube.
For further information, you may contact Associate Attorney Pascale Jean-Baptiste at the New York City Office.
1 Although not defined by A.S.P.E.N., Merriam-Webster’s 2010 Online Medical Dictionary defines “stoma” as: “1: any of various small simple bodily openings especially in a lower animal 2: an artificial permanent opening especially in the abdominal wall made in surgical procedures <a colostomy stoma>.”
2 American Society for Parenteral and Enteral Nutrition (A.S.P.E.N.) Definition of Terms, Style and Conventions, http://www.nutritioncare.org/lcontent.aspx?id=546.
3 There are two subsections (y) in section 4303.
4 Insurance Law § 3216(i)(21), which regulates individual policies of accident and health insurers; and Insurance Law § 3221(k)(11), which regulates group or blanket accident and health insurance policies, set forth similar requirements.
5 Merriam-Webster’s Collegiate Dictionary 416 (11th ed. 2003) defines enteral as follows:
En-ter-al\ adj: ENTERIC-, en-ter-al-ly adv
En-te-ric \ adj 1: of, relating to, or affecting the intestines; broadly: ALIMENTARY 2: being or having a coating designed to pass through the stomach unaltered and disintegrate in the intestines
6 Insurance Law § 4303(u) has subsequently been re-lettered as Insurance Law § 4303(y).
7 Mass. Gen. Laws ch. 176A, § 8L (“Any contract between a subscriber and the corporation under an individual or group hospital service plan that shall be delivered, issued or renewed in the commonwealth shall provide, as benefits to all individual subscribers and members within the commonwealth, coverage for nonprescription enteral formulas for home use for which a physician has issued a written order and which are medically necessary for the treatment of malabsorption caused by Crohn's disease, ulcerative colitis, gastroesophageal reflux, gastrointestinal motility, chronic intestinal pseudo-obstruction, and inherited diseases of amino acids and organic acids. Coverage for inherited diseases of amino acids and organic acids shall include food products modified to be low protein in an amount not to exceed two thousand five hundred dollars annually for any insured individual.”).
8 See MassHealth Guidelines for Medical Necessity Determination for Enteral Nutrition Products, available at http://www.mass.gov/Eeohhs2/docs/masshealth/guidelines/mg-enteralnutrition.pdf (referring to 130 CMR 450.204).
9 HCPCS stands for Health Care Common Procedure Coding System. This code set, established and maintained by the Centers for Medicare & Medicaid Services (CMS), primarily represents items and supplies and non physician services not covered by the American Medical Association CPT-4 codes. See http://www.cms.gov/TransactionCodeSetsStands/05_CodeSets.asp#TopOfPage
10 See HCPCS Release Code Sets, http://www.cms.gov/apps/ama/license.asp?file=/HCPCSReleaseCodeSets/Downloads/10a nweb.zip (indicating that S9434 is the code used to indicate a modified solid food.)
11 Durable Med. Equip. Reg’l Carrier: Coding Sys. http://www.dmerc.com/manual/productclassification/enteralPCL.pdf. (showing that CaminoPro is listed under codes B4157 and B4162, both which are classified as enteral formulas).
13 HCPCS modifier BO is used to report orally administered nutrition, not nutrition provided by feeding tube.
14 Durable Med. Equip. Reg’l Carrier: Enteral Nutrients-Prod. http://www.dmerc.com/manual/productclassification/enteralPCL.pdf.
15 N.Y. State Medicaid Program: Enteral Formula Prior Auth. Dispenser Worksheet, http://www.health.state.ny.us/health_care/medicaid/program/update/enteral-dispenserworksheet.pdf.