Peer Report Defeats Pip Pain Cream Charges

Value Care Pharmacy, Inc and Allstate Insurance Company

AAA Case No. 17-17-1053-2955
(Eileen Casey, arbitrator)
Award date: 02/28/2018

The issue in this PIP arbitration was: Whether Applicant is entitled to no-fault reimbursement for compound pain cream denied based on a peer review?

The original amount claimed was $2,077.47 for compound pain cream provided on October 26, 2016. Applicant amended the amount claimed to $1,442.28 pursuant to the pharmacy fee schedule.

The evidence demonstrates that the EIP, a forty-five-year-old female, was injured in a motor vehicle accident on October 17, 2016.

Lack of medical necessity is a defense to an action to recover no-fault benefits, which an insurer may assert upon a timely denial, based either on a medical examination or a peer review report. Rockaway Boulevard Medical P.C. v. Travelers Property Casualty Corp., 2003 N.Y. Slip Op. 50842(U), 2003 WL 21049583 (App. Term 2d & 11th Dists. 2003).

Respondent denied Applicant’s claim based on a peer review by Dr. Jay Weiss, M.D.   In his report, Dr. Weiss listed the medical records that he reviewed and detailed the EIP’s pertinent medical history.

Dr. Weiss said that, based upon a review of the medical records, there was no indication for the custom compound cream. He noted that the compounded medication consists of various oral medications such as gabapentin, cyclobenzaprine, baclofen and diclofenac. Dr. Weiss added that it also includes lidocaine and menthol which are common ingredients in over-the-counter topical rubs.

Dr. Weiss explained that of the oral medications that were noted here, Diclofenac has some limited use topically, but the others are oral medications without evidence of efficacy when placed on the skin. He added that the quantities and ratio of medication utilized also has no scientific basis or medical rationale or evidence of efficacy.

Furthermore, he noted that the New York Mid and Low Back Injury Medical Treatment Guidelines concluded that topical, oral and/or systemic compound medications are notrecommended. Dr. Weiss added that, according to the FDA website: “Are compound drugs approved by the FDA? Compounded drugs are not FDA-approved which means that FDA does not verify the safety, or effectiveness of compounded drugs.”

Dr. Weiss said that consumers and health professionals rely on the drug approval process to ensure that drugs are safe and effective and made in accordance with Federal quality standards.

Dr. Weiss said that compounded drugs also lack an FDA finding of manufacturing quality before such drugs are marketed. Dr. Weiss further states that the standard of care is that oral medications should not be furnished topically and cannot be expected to have the same effect when furnished topically. He added that the standard of care is also that a medication that has components which are not indicated for topical use is not recommended. He explained that this compound that was furnished is a nonapproved compound.

When Respondent has timely raised and established lack of medical necessity, the burden of proof then shifts to the Applicant to establish that the disputed services were reasonable and medically necessary. If the insurer medical examination or peer review is not rebutted, the insurer is entitled to denial of the claim. A Khodadadi Radiology v. New York Central, 16 Misc.3d 131(A), 841 N.Y.S.2d 824, 2007 N.Y. 51342(U) (App. Term 2d & 11th Dists. 2007).

The courts have held that a peer review report’s medical rationale will be insufficient to meet respondent’s burden of proof if: 1) the medical rationale of its expert witness is not supported by evidence of a deviation from “generally accepted medical” standards; 2) the expert fails to cite to medical authority, standard, or generally accepted medical practice as a medical rationale for his findings; and 3) the peer review report fails to provide specifics as to the claim at issue, is conclusory or vague. See, Nir v. Allstate Ins. Co., 7 Misc.3d 544 (N.Y. City Civ. Ct. 2005).

Applicant submitted a rebuttal from Robert Saidov, a licensed pharmacist employed by Applicant. Mr. Saidov noted that Dr. Weiss is not a NYS licensed pharmacist and is not familiar with the generally-accepted pharmaceutical practices. Mr. Saidov added that the treating-prescribing physician’s detailed narrative reports and Letter of Medical Necessity, clearly demonstrated the medical necessity for compound medication prescribed to the EIP. Mr. Saidov asserted that the FDA website says the pharmaceuticals provided to the EIP were reasonable, recognized by NYS, and were in fact medically necessary.

Applicant also submitted a letter of medical necessity from Dr. Ellen Ginsberg, the prescribing physician. Dr. Ginsberg noted that the compound pain cream was prescribed as the EIP had failed to improve satisfactorily or has intolerance to commercially available products; substantial reduction of overall systemic exposure with sedation and lower serum levels of medications; and the patient cannot tolerate the side effects of oral medications available for their condition.

Based on the foregoing, I find that Dr. Weiss’s peer review established that the prescription of the compound pain cream deviated from generally accepted medical standards. I also find that the letter of medical necessity and rebuttal failed to adequately address the issues raised in the peer review. Accordingly, Applicant’s claim is denied in its entirety.

Comments:   Compounded prescription pain creams are somewhat controversial. On the one hand, they can administer high doses of pain medication through the skin, without all the risks of addiction.  These compounds often include:

• Ketamine—a powerful pain reliever that can cause deep drowsiness

• Baclofen and cyclobenzaprine—powerful muscle relaxants that cause drowsiness

• Lidocaine and bupivacaine—local anesthetics that can cause heart rate and rhythm changes

• Tricyclic antidepressants—depression medicines used to treat pain that can cause heart or blood pressure abnormalities

• Gabapentin, clonidine, and nifedipine—pain relievers that are primarily used to control seizures or high blood pressure

Combinations of these and other drugs manufactured by compounding pharmacies are not approved by the US Food and Drug Administration (FDA).

And they are expensive. Compounding pharmacies are largely profitable and growing rapidly. Consumers are charged per ingredient even though there is really no proof that more drugs together make the product better. Many compounding pharmacies have a large sales force that conducts an elaborate marketing campaign and will provide doctors with prescriptions that only require their signature to make prescribing of these creams easier. Prospective patients are often receiving unsolicited calls at home, with a promise that the cream can be prescribed after an arranged telephone consultation with a physician. Some compounding pharmacies are even enticing doctors with financial incentives to prescribe these creams, despite an Anti-Kickback Statute. In one high-profile case, the Federal Bureau of Investigation (FBI) recently announced the arrest of one pharmacist with a compounding pharmacy who paid tens of thousands of dollars in cash bribes to physicians for providing patients with pain cream prescriptions.

Patients may be unaware of potential dangers with these creams, particularly side effects related to central nervous system depression and cardiac effects. There have been reports of patients experiencing adverse effects even with appropriate use, along with cases of patients intentionally misusing the creams. For example, a 47-year-old woman recently experienced a low heart rate, slurred speech, and dizziness after applying a compounded pain cream with five ingredients, including clonidine, a blood pressure medication. There is also concern about some compounding company statements that may be unproven, such as the pain cream or ointments’ safe use with children.

Additionally, the products, which are not packaged in containers with a safety closure, may not be as carefully stored as other medications to avoid accidental child exposures. Thus, numerous cases of children ingesting or applying the creams on their bodies have been reported.

In NY PIP arbitration, there is a presumption that the services provided were medically necessary, and the burden is on the insurer to prove, through competent testimony (or affidavits), that the services were not medically necessary and/or not within the standard of care of the medical profession.