STATE OF NEW YORK
25 BEAVER STREET
NEW YORK, NEW YORK 10004
|George E. Pataki
RE: Utilization Review, Pharmacy Benefits
If an organization determines whether there is a medical necessity for a prescription, would it have to qualify as a Utilization Review Agent?
Based upon the information supplied, such organization would have to qualify as a Utilization Review Agent. However, the Clinical Peer Reviewers employed to conduct such reviews could not be pharmacists or registered nurses.
An organization is a specialty pharmacy and is a subsidiary of a corporation that functions as a Pharmacy Benefit Manager. In addition to providing pharmaceuticals in response to a prescription, the organization desires to expand the services it provides its clients, (Health Maintenance Organizations, insurers and self-funded benefit plans), to include what it characterized as "partial utilization review".
Upon receipt of a prescription from a subscriber of a client HMO insurer or self-funded benefit plan, the organization would review the clinical criteria utilized by the client and the information submitted by the health care practitioner that issued the prescription. If the organizations reviewer, who would be either a pharmacist or nurse, believes that the drug is medically necessary, the prescription would be filled. If the organizations reviewer believed that the drug was not medically necessary, the client would be notified so it could proceed further.
For drugs prescribed on a continuing basis, such as maintenance drugs, the organizations reviewer would review each renewal or new prescription and determine whether the continued use of the drug was medically necessary. Based upon that determination, the organization would proceed in the same fashion as it would with new prescriptions.
New York Insurance Law § 4900(h) (McKinney 2000) defines utilization review:
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. . . .
Utilization Review Agent is defined by New York Insurance Law § 4900(i):
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.
The requirements for utilization review are set forth in New York Insurance Law § 4903 (McKinney 2000):
(a) Utilization review shall be conducted by: (1) Administrative personnel trained in the principles and procedures of intake screening and data collection, provided however, that administrative personnel shall only perform intake screening, data collection and non-clinical review functions and shall be supervised by a licensed health care professional; (2) A health care professional who is appropriately trained in the principles, procedures and standards of such utilization review agent; provided, however, that a health care professional who is not a clinical peer reviewer may not render an adverse determination; and (3) A clinical peer reviewer where the review involves an adverse determination.
Adverse determination and clinical peer reviewer are also defined in New York Insurance Law § 4900:
(a) 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.
(b) Clinical peer reviewer means: . . . .(A) a physician who possesses a current and valid non-restricted license to practice medicine; or (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; and
Similar requirements for utilization review are imposed by New York Public Health Law Article 49 (McKinney 2002) except that a utilization review agent is defined in New York Public Health Law § 4900(9) (McKinney 2002) as follows:
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.
It is immaterial that any adverse determination will be conveyed to the insured or subscriber by the insurer HMO or self-funded benefit plan, not the Utilization Review Agent. If utilization review is performed by any entity, other than an insurer, HMO or self-funded employee welfare benefit plan subject to the Employee Retirement Income Security Act, 29 U.S.C.A. § 1001 et seq. (West 1999 and 2003 Supplement), that entity is specifically subject to New York Insurance Law Article 49 (McKinney 2000) and/or New York Public Health Law Article 49.
Whether a pharmacist may function as a clinical peer reviewer has previously been the subject of opinions by the Insurance Department. With respect to nurses functioning as clinical peer reviewers concerning determinations as to whether a drug is medically necessary, New York Education Law § 6902 states:
(1) The practice of the profession of nursing as a registered professional nurse is defined as diagnosing and treating human responses to actual or potential health problems through such services as case finding, health teaching, health counseling, and provision of care supportive to or restorative of life and well-being, and executing medical regimens prescribed by a licensed physician, dentist or other licensed health care provider legally authorized under this title and in accordance with the commissioner's regulations. A nursing regimen shall be consistent with and shall not vary any existing medical regimen.
. . .
(3)(a) The practice of registered professional nursing by a nurse practitioner . . . may include the diagnosis of illness and physical conditions and the performance of therapeutic and corrective measures within a specialty area of practice, in collaboration with a licensed physician qualified to collaborate in the specialty involved, provided such services are performed in accordance with a written practice agreement and written practice protocols. The written practice agreement shall include explicit provisions for the resolution of any disagreement between the collaborating physician and the nurse practitioner regarding a matter of diagnosis or treatment that is within the scope of practice of both. To the extent the practice agreement does not so provide, then the collaborating physician's diagnosis or treatment shall prevail.
Accordingly, it is the position of the Insurance Department that, since a registered nurse may not prescribe drugs, a registered nurse is not competent to act as a clinical peer reviewer and overrule a health professional who prescribed the drug with respect to the medical necessity of a drug. As to nurse-practitioners, since Education Law § 6902(3)(a) contemplates that the views of a physician will prevail, such professionals may not function as a clinical peer reviewer with respect to the medical necessity of a drug prescribed by a physician.
While there is no provision in the New York Insurance Law for licensure of Utilization Review Agents, in accordance with New York Insurance Law § 4901 (McKinney 2000) such entities are required to submit reports to the Department. In addition, in accordance with New York Public Health Law § 4901 (McKinney 2002) Utilization Review Agents as defined under Public Health Law § 4900(9) are required to register with the Health Department and furnish the same information as is required pursuant to New York Insurance Law § 4901. Information as to registration in accordance with Public Health Law § 4901 should be secured from the Health Department.
For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.