By Ronald L. Scott
rscott@central.uh.edu

Court decisions are split on whether medical directors performing utilization review for insurance companies and other health care plans are “practicing medicine.”  Nonetheless, the American Medical Association (AMA) believes that, as physicians, medical directors “must uphold their professional, ethical duties regardless of whether they are engaged in direct patient care or in clinical decision-making that affects patient care provided by another physician or licensed health care professional.”  Recently, the AMA’s
Council on Ethical and Judicial Affairs (CEJA) issued Report 3-A-99 to clarify the ethical obligations of physicians employed by third-party payers in the health care delivery system or by entities that perform medical appropriateness determinations on behalf of payers.

In 1994, the CEJA issued Opinion 8.02, “Ethical Guidelines for Physicians in Management Positions and Other Non-Clinical Roles,” which provides: Physicians in administrative and other non-clinical roles must put the needs of patients first. At least since the time of Hippocrates, physicians have cultivated the trust of their patients by placing patient welfare before all other concerns. The ethical
obligations of physicians are not suspended when a physician assumes a position that does not directly involve patient care.

On August 31, 1999, the Ohio Attorney General ruled that physicians performing utilization review for insurance companies are not practicing medicine and that the Ohio State Medical Board therefore cannot discipline such physicians if they make an improper decision.  Attorneys General in North Carolina (1992) and Kansas (1990) have reached similar conclusions.  However, in Murphy v. Board of Medical Examiners of the State of Arizona, 949 P.2d 530 (Ariz. Ct. App. 1997), the Arizona Court of Appeals reached a contrary result.  The court held that although the medical director of a health maintenance organization is not engaged in the traditional practice of medicine, the medical director’s conduct is reviewable by the Board of Medical Examiners to the extent that he or she makes medical decisions.  One of the medical director’s functions in Murphy was to deny coverage as a result of determining that procedures were not “medically necessary.”

Whether a medical director is “practicing medicine” in a particular case may depend on what functions he or she performs.  In a case from the District of Columbia, Morris v. District of Columbia Board of Medicine, 701 A.2d 364 (D.C. 1997), Dr. Morris’ duties included developing networks of health care providers and managing post-treatment claims processing—and he did not make pre-treatment coverage decisions or manage the pre-treatment process. The court found that such conduct did not constitute the practice of medicine and noted that the actions of a particular administrator (rather than his job title) must be considered in making a determination. A number of states have considered or enacted legislation requiring that certain types of utilization review decisions involving denial of care on the basis of medical necessity be made by physicians licensed to practice in the state.

The CEJA report adopts a Morris-like approach, finding that physicians have higher ethical obligations when operating “within the professional sphere of physicians,” and further finding that medical directors' decisions regarding medical appropriateness or medical necessity are within such professional sphere.  Ethical obligations imposed on physicians when they are acting within the professional sphere include placing the interests of patients above other considerations and using fair and just criteria when making care-related determinations.  Perhaps the most far-reaching ethical obligation imposed is the requirement that medical directors “[work] towards achieving access to adequate medical services.”  The CEJA says this entails “encouraging employers to provide services that would be considered part of an adequate level of health care….”

10/14/99