Labor & Employment Law Daily Wrap Up, WAGE-HOUR—EXEMPTIONS—S.D.N.Y.: RNs performing utilization reviews for insurance company were exempt professional employees, (Sep 30, 2025)

By Ronald Miller, J.D.

RNs were properly classified under the professional exemption, such that all claims were dismissed.

An employer was granted its motion for summary judgment in an overtime dispute regarding whether RNs performing utilization review work were properly classified as exempt under the FLSA and NYLL. Here, a federal district court in New York concluded that the RNs satisfied the three prongs of the “duties” test to qualify as exempt professional employees. Because the RNs used their medical-based knowledge to independently approve claims, the Second Circuit’s decision in Islett v. Aetna Life Insurance controlled (Lazaar v. The Anthem Companies, Inc., No. 22-CV-3075 (JGLC) (S.D.N.Y. Sept. 29, 2025)).

Utilization reviewers. Anthem is a health insurance company that provides managed care programs and related services. As a part of its business Anthem employs utilization reviewers. These utilization reviewers conduct first-level medical necessity reviews, which means that they determine whether a health insurance request should be approved or not. Most utilization reviewers are registered nurses. Anthem paid these employees a salary and classified them as exempt from overtime wages under the FLSA and NYLL.

This case is about whether, based on their job duties, the utilization reviewers were properly classified as exempt, or whether they are owed overtime wages.

Utilization reviewers handle insurance authorization requests submitted by healthcare providers on behalf of members covered under a specific health insurance plan. In assessing criteria, reviewers review the medical data of the patient. Reviewers are allowed to use their nursing judgment in applying the criteria. And reviewers testified that they “have to put a lot of nursing judgment” to determine if criteria are met.

If the clinical information meets the applicable medical necessity criteria, the reviewer can approve the requested benefit or service, unless a rule requires the reviewer to send the request to a Medical Director.

Requirements for utilization reviewers. Reviewers worked on health plans subject to review standards set by the National Committee for Quality Assurance (NCQA). To remain NCQA accredited, Anthem has implemented rules that govern review work consistent with NCQA standards. The NCQA also sets the minimum standards for which professionals can review authorization requests. The NCQA requires “licensed health professionals” for this work.

Neither New York state rules and regulations, nor NCQA accreditation requirements, nor Anthem’s internal policies require that medical necessity reviews be performed by those with RN licenses. However, Anthem required NMM nurses to possess and maintain an RN license.

LPNs as utilization reviewers. As defined by the NCQA requirements Licensed Practical Nurses (LPNs) are also included as “licensed health professionals.” Anthem also hired LPNs on its review team. According to Anthem, LPN reviewers and RN reviewers had different qualifications and duties, with LPNs handling less complex cases and adhering to specific criteria.

Like RN reviewers, LPN reviewers also process authorization requests by applying medical necessity criteria to submitted documentation. LPN reviewers underwent the same training as RN reviewers provided by Anthem. However, Anthem asserted that LPNs and RNs were not afforded the same level of authority, with LPNs approving simpler cases that adhered to specific criteria. However, some LPNs acted as managers supervising utilization review teams with RNs.

Exempt classification. LPNs are paid hourly and classified as non-exempt, while RNs are paid a salary and classified as exempt. According to the RNs, they regularly worked over forty hours per week to meet productivity metrics.

On April 13, 2022, the named plaintiff filed suit on behalf of herself and all other utilization review nurses who worked for Anthem in New York, alleging violations of the FLSA and NYLL. On June 22, 2023, the court conditionally certified an FLSA collective and authorized notice to issue. As of May 20, 2024, there were approximately 358 putative class members. On February 28, 2025, parties filed cross-motions for summary judgment.

Exempt status. The first (and dispositive) question was whether the RNs were properly classified as exempt employees by Anthem. Anthem contended that the plaintiffs fell under the learned profession exemption as registered nurses. In order for this exemption to apply, the employer must show that the plaintiffs’ employment met both a “salary” test and a “duties” test. The “salary” test requires that the employee be compensated “on either a fee or salary basis” and “must receive no less than $455 per week[.]” It is undisputed that the employees’ pay exceeds this threshold.

“Duties” test. Here, the employees argue that their employment fails to meet the “duties” test. Under the “duties” test, the exempt employee’s “primary duty” must be exempt work—that is, the “performance of work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized instruction.” All three prongs of this test must be satisfied for the professional exemption to apply.

According to the employees, their employment meets none of the three prongs of the duties test. First, they characterized their primary duty as processing insurance requests, which is “routine mental work requiring them to apply well-established medical criteria within a closely prescribed utilization review process....” Second, they argued that the knowledge required to process authorization requests only requires LPN-level knowledge and on-the-job training. Third, they argued that review work is not in a field of science or learning and instead falls in the insurance field.

Medical criteria. The court considered each argument in light of Isett v. Aetna Life Insurance Company, 947 F.3d 122 (2d Cir. 2020). Here, the court reached the same conclusion as in Isett, that the RNs must apply medical criteria of “highly technical guidelines to a patient’s unique and varying facts....” Thus, Anthem has provided ample evidence that first-level review work requires clinical judgment and technical knowledge. Moreover, even though facts indicate that LPNs can also make final approvals, that does not change the fact that RN Plaintiffs had the ability to act independently, under limited supervision, on the basis of collected clinical data. Thus, the RNs’ job required the use of advanced knowledge, satisfying the first prong of the primary duty test.

The undisputed evidence shows that the work performed by RNs called on advanced knowledge acquired in their nursing studies. Reviewers looked at a “clinical picture,” interpreted technical terms, made inferences based on the usage of technical terms, made deductions from details in patient files, and determined “what patients need to address diagnoses.” Moreover, reviewers are frequently interpreting highly technical terms, and they may be called on to draw inferences based on details in files that can be hundreds of pages. Further, the “vast majority” of reviewers required a prolonged, specialized education to fulfill their role.

Field of science or learning. Finally, the court concluded that utilization review work, at least more complex review work assigned to licensed health professionals and RNs, required advanced knowledge in a field of science. The reviewers in this case relied upon extensive medical knowledge to determine which guidelines apply and when criteria are met.

Accordingly, the court determined that the RNs were properly classified under the professional exemption, such that all claims were dismissed.

The case is No. 22-CV-3075 (JGLC).

Judge: Clarke, J.

Attorneys: Caitlin L. Opperman (Nichols Kaster) for Leslie Lazaar. Lennon Haas (Seyfarth Shaw) for The Anthem Companies, Inc.

Companies: The Anthem Companies, Inc.

Cases: WageHour Exemptions Overtime NewYorkNews