New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on December 14, 2001,representing the position of the New York State Insurance Department.

Re: Services of an Assistant Surgeon

Issue:

Is a denial of payment by an insurance company or Health Maintenance Organization (collectively insurers) for the services by a non-participating health care provider as an "assistant surgeon" subject to the utilization review procedures of Article 49 of New York Insurance Law (McKinney 2000) or New York Public Health Law (McKinney 1985 and 2001 Supplement)?

Conclusion:

Yes, such a denial is subject to the provisions of those statutes.

Facts:

Aetna U.S. Healthcare (Aetna) operates a health insurance company licensed pursuant to New York Insurance Law Article 42 (McKinney 2000), U.S Health Insurance Company, and an HMO with a Certificate of Authority from the Commissioner of Health pursuant to New York Public Health Law Article 44 (McKinney 1985), U.S. Healthcare, Inc. The insurance company’s policies provide, inter alia, that it will reimburse policyholders for incurred healthcare costs. The HMO’s contracts, as authorized by New York Public Health Law §4406(2) (McKinney 1985 and 2001 Supplement), provide for similar payments when an out of network health care provider is utilized.

The contracts of both insurers provide that the services of an assistant surgeon will be covered in the appropriate circumstances. The American College of Surgeons and 15 surgical specialty organizations have reviewed the appropriate surgical codes in the American Medical Association’s Current Procedural Terminology (2000)™ (CPT code) and indicated whether they believe that the services of an assistant surgeon are usually required. Unless the appropriate surgical specialty organization has determined that the services of an assistant surgeon are almost never to be utilized, the insurer will pay for such services. Where the policyholder or contractholder disputes the denial, there is an appeal mechanism.

It is the Consumer Services Bureau’s (Bureau) contention that a determination as to whether to pay for the services of an assistant surgeon is a determination of medical necessity, and thus triggers the requirements of Article 49 of both the New York Insurance and New York Public Health Laws. The inquirer disputes that contention and submitted arguments in support of his position to the Bureau. In November 2001, in response to its request, this Office furnished the Bureau with an analysis of the issue.

The inquirer has requested a copy of this Office’s opinion. While the Opinion is subject to an attorney-client privilege, the Bureau has waived such privilege to the extent that it will permit this Office’s analysis of the captioned issue to be furnished to the inquirer.

Analysis:

New York Insurance Law §4904(a) (McKinney 2000) sets forth the right of utilization review appeal:

An insured, the insured's designee and, in connection with retrospective adverse determinations, an insured's health care provider, may appeal an adverse determination rendered by a utilization review agent.

New York Public Health Law §4904(1) (McKinney 1985 and 2001 Supplement) has an identical provision respecting HMOs.

New York Insurance Law §4900(a) (McKinney 2000) defines an adverse determination:

‘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 Insurance Law §4900(i) defines a utilization review agent:

‘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.

Utilization review is defined in New York Insurance Law §4900(h), in pertinent part:

‘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. For the purposes of this article none of the following shall be considered utilization review: . . . (3) The review

of the appropriateness of the application of a particular coding to a patient, including the assignment diagnosis and procedure; (4) Any issues relating to the determination of the amount or extent of payment other than determinations to deny payment based on an adverse determination; and (5) Any determination of any coverage issues other than whether health care services are or were medically necessary.

New York Public Health Law Article 49 has similar provisions affecting HMOs, except that a utilization review agent is defined in New York Public Health Law §4900(9) (McKinney 1985 and 2001 Supplement) as:

‘Utilization review agent’ means any company, organization or other entity performing utilization review, except: (a) an agency of

the federal government; (b) an agent acting on behalf of the federal government, but only to the extent that the agent is providing services to the federal government; (c) an agent acting on behalf of the state and local government for services provided pursuant to title XIX of the federal social security act; (d) a hospital's internal quality assurance program except if associated with a health care financing mechanism; or (e) any insurer subject to article thirty-two or forty-three of the insurance law and any independent utilization review agent performing utilization review under a contract with such insurer, which shall be subject to article forty-nine of the insurance law.

The inquirer contends that his companies’ denial of payment for assistant surgeons is not within the purview of New York Insurance Law Article 49 or New York Public Health Law Article 49 because of the exception in New York Insurance Law §4900(h)(3) and New York Public Health Law §4900(8)(c) concerning "appropriateness of the application of a particular coding to a patient," which he asserts unambiguously excludes the denials from Article 49 review.

It is the rule in New York that legislative intent is to be ascertained from the language of the statute and that, if the language is unambiguous, there is no need to resort to other means of interpretation. Roth v. Michelson, 55 N.Y.2d 278, 449 N.Y.S. 2d 159(1982). Where, however, the meaning is not clear from the language, resort must be had, inter alia, to the expressed purpose of the enactment. Metropolitan Life Insurance Company v. New York State Labor Relations Board, 168 Misc. 984, 6 N.Y.S. 2d 775 (Sup. Ct. New York 1938), affd., 255 App. Div. 840, 7 N.Y.. 2d 1007 (1st Dept. 1938), affd., 280 N.Y. 194 (1939). Further, no narrow construction of a statute may thwart the legislative intent. Long v. Adirondack Park Agency, 76 N.Y.2d 416, 559 N.Y.S. 2d 941 (1990).

Appeals pursuant to New York Insurance or Public Health Law Articles 49 are limited to appeals involving whether the health care service is or was medically necessary. New York Insurance Law §4900(h)(5) and New York Public Health Law §4900(8)(e). The term "medically necessary" is not defined in either statute and, in construing the term, the courts have not indicated that "necessary" has a meaning other than as it is usually defined.

While a determination as to whether there has been a proper application of a CPT code would fall within the "coding" exception, the ramifications of an application of such a code are not necessarily encompassed within that same exception. Accordingly, in

construing New York Insurance or Public Health Law Articles 49, an examination should be made of the legislative intent.

The Memorandum in Support of the bill that enacted New York Insurance Law and New York Public Health Laws Articles 49 in 1996, Senate Bill 7553 (Rules Committee), provided, in pertinent part:

Patients must also be assured that only the highest standards are used by a plan in deciding medical necessity during utilization review. The bill requires that utilization review standards be explicit and industry-wide, in order to protect consumers while still allowing plans to coordinate and manage care. This bill achieves the necessary balance, through clear procedural requirements for utilization review agents and an articulation of grievance rights and plan requirements.

The inquirer implies that the insured receives a sufficient review through an existing appeal procedure. It is surmised that the present appeal procedure is that prescribed by New York Insurance Law §4802(a) (McKinney 2000) for a grievance, which does not mandate that the reviewer be specifically qualified to pass upon the requirements for performing the specific procedure. By contrast, New York Insurance Law §4903(a)(3) (McKinney 2000) and New York Public Health Law §4903(1)(c) (McKinney 1985 and 2001 Supplement) require that only a clinical peer reviewer may review adverse determinations. New York Insurance Law §4900(b)(1) defines same, as follows:

‘Clinical peer reviewer’ means: (1) for purposes of title one of this article: (i) a physician who possesses a current and valid non-restricted license to practice medicine; or (ii) a health care professional other than a licensed physician who: (A) 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 (B) 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)(a) has an identical definition.

Since the CPT code merely describes the procedure and does not indicate whether the services of an assistant surgeon are indispensable, it would frustrate the intent of the Legislature to deprive insureds of the benefits of an objective and knowledgeable review.

There is no guaranty that the appeal currently provided by the inquirer’s companies where there is a dispute between the insured and insurer concerning whether a non-participating assistant surgeon was properly utilized would be decided by someone who would qualify as a clinical peer reviewer. Therefore, this Office believes the Legislature intended that, in the circumstances described, New York Insurance and Public Health Laws Articles 49 are applicable.

Accordingly, where the insured disputes a denial by the insurer or HMO for payment of the services of a non-participating assistant surgeon, the insured is entitled to the review rights provided by New York Insurance and Public Health Laws Articles 49.

For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.