STATE OF NORTH CAROLINA



STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

COUNTY OF MECKLENBURG 03 INS 1518

______________________________________________________________________________

PENTECH INFUSIONS, INC., AS/ASSIGNEE )

OF BETTY W. GREEN AND AVA CATHEY )

Petitioner, )

)

v. ) DECISION

)

NORTH CAROLINA TEACHERS’ )

AND STATE EMPLOYEES’ )

COMPREHENSIVE MAJOR )

MEDICAL PLAN, )

Respondent. )

THIS MATTER came on to be heard before the undersigned Augustus B. Elkins II, Administrative Law Judge (ALJ), on 29 June 2005 in Raleigh, North Carolina. This matter was brought by PENTECH INFUSIONS, INC., as assignee of BETTY W. GREEN and AVA CATHEY, two State Health Plan Members.

APPEARANCES

For Petitioner: Edward G. Connette

Lesesne & Connette

1001 Elizabeth Ave, Suite 1-D

Charlotte, NC 28204

For Respondent: Lori A. Kroll

Assistant Attorney General

North Carolina Department of Justice

9001 Mail Service Center

Raleigh, North Carolina 27699-9001

ISSUE

Whether Betty W. Green and Ava Cathey are entitled to health plan coverage for Intraperitoneal Nutritional Supplements (IPN) under the terms of the North Carolina Teachers’ and State Employees’ Comprehensive Major Medical Plan.

STATUTES AND RULES

Chapter 135 of the North Carolina General Statutes and Plan Medical Policies including but not limited to:

N.C.G.S. §135-39.5 (20)

N.C.G.S. §135-40.1 (1a)

N.C.G.S. §135-40.5 through N.C.G.S. §135-40.9

N.C.G.S. §135-40.7(5)

Plan’s Policies:

AD0050, Administrative Appeals

AD0125, Medically Necessary

SU0190, Experimental and Investigational

WITNESSES

For Petitioner: Dr. Steven P. Teti

For Respondent: Dr. Eugenie M. Komives

Dr. Chester A. Amedia

EXHIBITS

For Petitioner: Petitioner’s Exhibits 1 through 26

For Respondent: Respondent’s Exhibits 1 through 17

BASED UPON careful consideration of the sworn testimony of the witnesses presented at the hearings, the documents and exhibits received and admitted into evidence, and the entire record in this proceeding, the Undersigned makes the following findings of fact. In making the findings of fact, the Undersigned has weighed all the evidence and has assessed the credibility of the witnesses by taking into account the appropriate factors for judging credibility, including but not limited to the demeanor of the witness, any interests, bias, or prejudice the witness may have, the opportunity of the witness to see, hear, know or remember the facts or occurrences about which the witness testified, whether the testimony of the witness is reasonable, and whether the testimony is consistent with all other believable evidence in the case.

FINDINGS OF FACT

1. Both Betty Green and Eva Cathey suffered from Chronic Renal Failure (CRF) and were members of the State Health Plan (Plan) at the time they received the services at issue in this contested case. The Plan provides health benefits for certain covered charges. In order for a charge to be covered, it must be medically necessary. Petitioner Pentech submitted claims for treatment it rendered to Ms. Green and Ms. Cathey. The State Health Plan denied the claims asserting that the subject treatment in the cases of Ms. Green and Ms. Cathey was not medically necessary.

2. Petitioner, Pentech Infusions, Inc., is a medical provider that provides a treatment known as Intraperitoneal Nutrition (IPN) in the State of North Carolina. Petitioner provided IPN nutritional formula to patients, Ms. Betty W. Green and Ms. Ava Cathey.

3. Dr. Freyfogle, a nephrologist, was treating both of these women and she believed that nutritional support was necessary for each of these patients due to their CFR. Dr. Freyfogle prescribed Intraperitoneal Nutrition (IPN).

4. Betty Green was a 67-year-old woman with acute malnutrition, secondary to renal failure, when in late 2000, her treating nephrologist, Dr. Freyfogle, prescribed IPN. She began receiving IPN. The total cost of her treatment amounted to $30,340.00. The State Health Plan has not issued any reimbursement for this treatment.

5. Ava Cathey was a 63-year-old woman with acute malnutrition, secondary to renal failure, when in late 2000, her treating nephrologist, Dr. Freyfogle, prescribed IPN. She began receiving IPN. The total cost of her treatment amounted to $25,10.00. The State Health Plan has not issued any reimbursement for this treatment.

6. Initially, the State Health Plan denied coverage for both women because it believed this treatment was investigational. Pentech, acting on behalf of Ms. Green and Ms. Cathey, appealed the benefit denial. Pentech gave the state health plan copies of lab test results, a statement from the treating physician, and medical literature showing the efficacy and medical necessity of the treatment. The State Health Plan submitted this case to an independent review organization, Metrolina Nephrology, for an opinion. The independent review organization concluded that the treatment was not experimental or investigational, provided that the standard of care as set forth in the Disease Outcome Quality Initiative (DOQI or KDOQI) standards was met.

7. The expert consultant could not state whether those KDOQI standards had been met in these cases because there was inadequate medical documentation provided by the treating physician to determine if the use of IPN was medically necessary for either of these patients.

8. A copy of the External Review was provided to the physician and she was asked in writing to provide the lab data and adequacy testing data dating back to six-months prior to initiation of the IPN and lab data up through March 2001. The expert consultant also wanted copies of the progress notes, hospitalization records, weights, and nutritional assessments for the six-month period prior to initiation of IPN through March 2001.

9. The total data needed was not provided to the State Health Plan despite numerous written requests to the physician and to the legal counsel (not Mr. Connette) who represented the Petitioner at that time. Numerous delays were granted from Aug 2001 until December 17, 2002, when the Agency moved forward and denied the services. By letter dated July 3, 2003, the Board of Trustees of the NC Teachers’ and State Employees’ Comprehensive Major Medical Plan notified Petitioner that it was denying Petitioner’s appeal for payment of services.

10. The State Health Plan again employed the expertise of an outside expert, who agreed with the Plan decision to deny benefits for lack of supporting data. Immediately prior to the original hearing date, the current legal counsel for Petitioner located documents that appeared to be responsive to the Agency’s request. A delay was agreed upon and the materials were sent to the Agency’s expert for review.

11. The National Kidney Foundation has developed guidelines for the administration of IPN. These are known as the Disease Outcome Quality Initiative (DOQI or KDOQI) guidelines. All parties agreed that the KDOQI standards were the applicable standards to apply in this case.

12. Dr. Chester A. Amedia, Jr. testified for the Respondent. He received his M.D. degree from Ohio State University in 1973. He is board certified in Internal Medicine (1976) with a sub-specialty certification/licensure in Nephrology (1980). Dr. Amedia is Professor of Clinical Internal Medicine at Northeastern Ohio Universities College of Medicine and is Chief Medical Officer at Renaissance Health Care.

13. Dr. Amedia, testified as an expert nephrologist on behalf of the Respondent. He was one of the two external consultants to review the materials in this case. Dr. Amedia testified that the use of IPN services must meet certain criteria found in the KDOQI standards, and that neither patient in this case met those criteria. This standard required, among other things, that tube feeding should be tried before IPN. Dr. Amedia testified that neither patient had attempted tube feeding prior to the use of IPN. Futhermore, neither patient had adequate medical documentation of their weight loss prior to using IPN services.

14. Dr. Amedia also testified that a review of the newly discovered records showed these patients improved when they were taken off of the IPN services and given the appropriate nutritional support. Dr. Amedia testified that the use of IPN services like those at issue in this case were on a steep decline at the time relevant to this appeal.

15. Dr. Steven Teti testified for the Petitioner. Dr. Teti is Senior Vice President of Pentech Infusions, Inc. His Curriculum Vitae shows that he has his Masters of Science degree in Health Administration from St. Joseph’s University and his Bachelor of Science degree in Pharmacy from the Philadelphia College of Pharmacy. Dr. Teti testified that he received his Doctor of Pharmacy from the State of Tennessee last year after passing an examination. He testified that this was also considered a degree.

16. Dr. Teti described the process for determining whether patients are appropriate for IPN. As the pharmacist for Pentech, he consults with the individual patient’s nutritionist, dietician, and physician to determine the patient’s specific needs, whether the patient is able to receive adequate nutrition through diet, whether there are any particular medications that may be impeding nutrition, and whether nutritional supplements have been tried, before determining whether IPN is appropriate.

17. A key indicator of protein uptake needed by a patient is a blood test for levels of albumin. The patients’ albumin levels in this case were close to normal about six months before IPN was prescribed, but Dr. Teti saw a trend of declining albumin levels and testified that nutritional management, dietary intervention, and supplements were not meeting the patients’ needs. No nephrologists testified at the hearing for the Petitioner.

18. Betty Green and Ava Cathey both were referred to Pentech by their nephrologist, and Dr. Teti had conversations with the nephrologist to determine the appropriateness of IPN. They concluded that IPN should be prescribed. Dr. Freyfogle prescribed IPN for Betty Green on October 25, 2000, after her albumin level had declined. Dr. Teti talked with the nutritionist and treating physician, Dr. Freyfogle, in Ava Cathey’s case, and reviewed her nutritional and medical records. They did a dietary protein intake analysis and determined that her protein intake was inadequate. It showed a steady decline in albumin levels in September and in October, when IPN was initiated.

19. Dr. Eugenie M. Komives testified for Respondent. Dr. Komives received her Doctor of Medicine degree in 1985 from Harvard Medical School. She is certified by the American Board of Family Practice and the American Board of Quality Assurance and Utilization Review Physicians Diplomate. Dr. Komives is the Lead Government Programs Medical Director/State Health Plan Medical Director at Blue Cross and blue Shield of North Carolina.

20. Dr. Komives testified that based on her review of all of the data associated with this case, she agreed that the record did not support a finding of medical necessity for either Ms. Green or Ms. Cathey.

BASED UPON the foregoing findings of fact and upon the preponderance or greater weight of the evidence in the whole record, the Undersigned makes the following:

CONCLUSIONS OF LAW

1. The Office of Administrative Hearings has jurisdiction over the parties and the subject matter of this hearing pursuant to the North Carolina General Statutes. All parties have been correctly designated and there is no question as to misjoinder or nonjoinder. To the extent that the findings of fact contain conclusions of law, or that the conclusions of law are findings of fact, they should be so considered without regard to the given labels.

2. The State Health Plan provides hospital and medical benefits for its members subject to the limitations described in Chapter 135 of the North Carolina General Statutes and Plan Medical Policies. Under N. C. Gen. Stat. §135-40.1 (1a), the phrase “Covered Services” is synonymous with allowable expenses and with benefits. N.C.Gen. Stat. §135-40.7(5) requires the Plan to cover those treatments that are medically necessary.

3. Under N.C. Gen. Stat. §135-39.5 (20), the Executive Administrator and Board of Trustees of the State Health Plan have the power and duty to: “[Determine] administrative and medical policies that are not in direct conflict with Part 3 of this Article upon the advice of the Claims Processor and upon the advice of the Plan's consulting actuary when Plan costs are involved.”

4. The services that are at issue in this proceeding are services rendered to Eva Cathey and Betty W. Green between 25 October 2000 and March 2001. This matter comes forward as an appeal of the decision of the Claims Administrator, to deny coverage for the IPN services rendered during this time period. The record reflects that the Agency followed the appropriate appeals procedures in a timely manner.

5. The burden of proof is on Petitioner to show that the services at issue are within the health insurance coverage provided by Respondent. It is appropriate to allocate the burden of proof to Petitioner, given the legal principle that the interpretation of a statute given by the administrative agency charged with carrying it out is entitled to great weight. See Frye Regional Medical Center, Inc. v. Hunt, 350 N.C. 39, 510 S.E. 2d 159 (1999). Once the Petitioner meets this initial burden, the burden then shifts to the Respondent to show that the benefits at issue are not covered under the statute or plan medical policies.

6. It is incumbent upon the Petitioner to meet its burden of proof by a preponderance of the evidence. Black’s Law Dictionary cites that “preponderance means something more than weight; it denotes a superiority of weight, or outweighing.” The finder of fact cannot properly act upon the weight of evidence, in favor of the one having the onus, unless it overbear, in some degree, the weight upon the other side.

7. The Petitioner has failed to establish that the services requested were medically necessary and thereby met the requisite standard of care. The testimony of Respondent’s witnesses, Dr. Chester A. Amedia, Jr., who testified as an expert nephrologist, and Dr. Eugenie M. Komives, a board certified physician, are found to be more compelling than the testimony of Petitioner’s witness, Dr. Steven Teti. The services for which Petitioner seeks payment in this proceeding do not qualify for reimbursement under the General Statutes and Board policies applicable to this proceeding.

BASED UPON the foregoing Findings of Fact and Conclusions of Law the Undersigned makes the following:

DECISION

The Undersigned hereby determines that Petitioner’s assertions of medical necessity for IPN treatment of Petitioner’s assignors are not supported by a preponderance of the evidence. The finder of fact cannot properly act upon the weight of evidence, in favor of the one having the onus, unless it overbear, in some degree, the weight upon the other side. Petitioner’s evidence does not overbear in that degree required by law the weight of evidence of Respondent. As such, the decision of Respondent Board of Trustees of the North Carolina Teachers’ and State Employees’ Comprehensive Major Medical Plan to deny Petitioner’s reimbursement claim for the IPN services rendered is AFFIRMED.

NOTICE

The agency making the final decision in this contested case shall adopt the Decision of the Administrative Law Judge unless the agency demonstrates that the Decision of the Administrative Law Judge is clearly contrary to the preponderance of the admissible evidence in the official record. The agency is required to give each party an opportunity to file exceptions to this Decision issued by the Undersigned, and to present written arguments to those in the agency who will make the final decision. N. C. Gen. Stat. § 150B-36(a).

In accordance with N.C. Gen. Stat. § 150B-36, the agency shall adopt each finding of fact contained in the Administrative Law Judge’s decision unless the finding is clearly contrary to the preponderance of the admissible evidence, giving due regard to the opportunity of the Administrative Law Judge to evaluate the credibility of witnesses. For each finding of fact not adopted by the agency, the agency shall set forth separately and in detail the reasons for not adopting the finding of fact and the evidence in the record relied upon by the agency. Every finding of fact not specifically rejected as required by Chapter 150B shall be deemed accepted for purposes of judicial review. For each new finding of fact made by the agency that is not contained in the Administrative Law Judge’s decision, the agency shall set forth separately and in detail the evidence in the record relied upon by the agency establishing that the new finding of fact is supported by a preponderance of the evidence in the official record.

The agency that will make the final decision in this contested case is the North Carolina Teachers’ and State Employees’ Comprehensive Major Medical Plan. The agency is required by N.C.G.S. 150B-36(b) to serve a copy of the final decision on all parties and to furnish a copy to the parties’ attorneys of record and to the Office of Administrative Hearings.

IT IS SO ORDERED.

This the 6th day of October, 2005.

___________________________

Augustus B. Elkins II

Administrative Law Judge

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