Corporate Counsel Daily, Appellate court finds definition of ‘oncological protocol’ irrational, (Oct 23, 2024)

By Elena Eyber, J.D.

An appellate court reversed the dismissal of an oncology practice's challenge to a New York State Department of Health definition limiting Medicaid reimbursement for supportive care medications, finding the definition irrational and harmful to patient care.

The New York Supreme Court, Appellate Division, reversed the judgment of the Supreme Court dismissing an oncology practice's challenge to a definition of "oncological protocol" established by the New York State Department of Health (DOH) and adopted from the State Education Department (SED). The oncology practice argued that the DOH's definition unlawfully restricted the reimbursement of supportive care medications under Medicaid. The Supreme Court had ruled that the definition was a reasonable interpretation of existing law, but on appeal, the court found the definition irrational and reversed the judgment (North Shore Hematology-Oncology Associates, P.C. v. New York State Department of Health, No. CV-23-0517 (N.Y. App. Div. Oct. 17, 2024)).

The underlying issue arose from the prohibition on healthcare providers dispensing more than a 72-hour supply of prescription drugs, with exceptions, including for drugs dispensed under an "oncological protocol." The DOH, in response to concerns over Medicaid claims, defined oncological protocol in 2021 as covering only medications directly related to cancer treatment, excluding supportive care drugs like those for nausea or pain. The oncology practice argued that this new definition constituted an unpromulgated rule and was unconstitutionally vague, leading to claims denials.

On appeal, the court rejected the oncology practice's argument that the definition was an unpromulgated rule, agreeing with the lower court that it was an interpretive statement of existing statutory language and not subject to formal rulemaking procedures. However, the appellate court found that the definition itself was irrational, as it lacked a clear medical basis and potentially hindered adequate healthcare for oncology patients by excluding necessary supportive care medications.

The appellate court emphasized that the statutory language intended to balance preventing unnecessary prescribing with ensuring access to essential medical care. The evidence presented showed that supportive medications are often integral to cancer treatment, and the DOH’s definition could negatively impact patient care. Consequently, the appellate court reversed the lower court's ruling and granted the petition, effectively invalidating the DOH’s definition.

The case is No. CV-23-0517.

Judge: Garry, P.J.

Attorneys: Michael N. Sheflin (Frier Levitt) for North Shore Hematology-Oncology Associates, P.C. d/b/a New York Cancer & Blood Specialists. Letitia James, Office of the Attorney General, for New York State Department of Health.

Companies: North Shore Hematology-Oncology Associates, P.C. d/b/a New York Cancer & Blood Specialists; New York State Department of Health

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