Issued and entered this 20 th day of December 2010 by Ken Ross Commissioner ORDER I PROCEDURAL BACKGROUND

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1 STATE OF MICHIGAN DEPARTMENT OF ENERGY, LABOR & ECONOMIC GROWTH OFFICE OF FINANCIAL AND INSURANCE REGULATION Before the Commissioner of Financial and Insurance Regulation In the matter of XXXXX Petitioner File No v Physicians Health Plan of Mid-Michigan Respondent / Issued and entered this 20 th day of December 2010 by Ken Ross Commissioner ORDER I PROCEDURAL BACKGROUND On November 24, 2010, XXXXX (Petitioner) filed a request for external review with the Commissioner of Financial and Insurance Regulation under the Patient s Right to Independent Review Act, MCL et seq. The Commissioner reviewed and accepted the request on November 30, On December 1, 2010, Physicians Health Plan of Mid-Michigan (PHP) submitted the information used in making its adverse determination. This case involves medical issues. Therefore, the Commissioner assigned the matter to an independent review organization which submitted its recommendation on December 14, II FACTUAL BACKGROUND The Petitioner is a member of PHP, a health maintenance organization. Petitioner is a 41 year-old male with a 2 year history of adult onset diabetes. He has been on several oral

2 Page 2 diabetic medications and experienced side effects from the drugs Metformin and Sulfonylurea. As a result, Petitioner s endocrinologist prescribed Victoza for the treatment of his diabetes. Petitioner requested coverage for Victoza. PHP denied the request. The Petitioner s benefits are defined in the PHP Plus Certificate of Coverage and PHP s Outpatient Prescription Drug Rider. PHP also has a written Pharmacy Benefit Determination Policy titled GLP-1 Receptor Antagonist, which it cited in support of its claim denial. The Petitioner appealed the claim denial through PHP s internal grievance process. After the Petitioner exhausted the internal grievance process, PHP issued a final adverse determination dated September 27, III ISSUE Did PHP properly deny coverage for the Victoza under the terms of the certificate? Petitioner s Argument IV ANALYSIS The Petitioner and his physician believe PHP should provide coverage for Victoza. In a letter dated October 26, 2010, Petitioner s physician, Dr. XXXXX described the Petitioner as a young man with type 2 diabetes for the last 2 years. He has been on a number of oral agents and has been unresponsive to those agents and has side-effects to the drugs Metformin and Sulfonylureas. The Petitioner s physician described current treatment which includes injections of an incretin, Victoza. With his current treatment, the Petitioner has good blood sugar control and good tolerance with improvement of his symptoms. Given his current treatment success and intolerance to prior oral agents, the Petitioner s physician believes this form of treatment should be continued in this patient. Respondent s Argument In its September 27, 2010, final adverse determination, PHP denied coverage for the Victoza saying, in part:

3 Page 3 The original decision to deny your request was upheld because you do not meet the required criteria for coverage. To meet the criteria, you need to take Metformin greater than or equal to 1500 mg per day along with Glyburide 10 mg per day for at least three months, or other formulary alternatives. This decision was based on the following section of your Certificate of Coverage. A copy of the following information is attached. Outpatient Precription Drug Rider, Section 2: What s Not Covered Exclusions, #15 Exclusion #15 is for Prescription Drug Products not included on Tier-1 or Tier-2 of the Prescription Drug List at the time the Prescription Order or Refill is dispensed. PHP believes that its benefit determination was appropriate in Petitioner s case. Commissioner s Review The PHP certificate and drug rider provides coverage for Victoza but only when a member meets the criteria of its medical policy (which applies to both Victoza and Byetta) which states: [PHP] will cover Byetta or Victoza through the pharmacy benefit based on a clinical review and approval by the Clinical Pharmacy Manager or Medical Director using the following determination guidelines. Clinical Determination Guidelines: Criteria met must be documented in patient chart notes. 1. Age: 18 years 2. Diagnosis: Type II Diabetes a. Hgb A1c > 8% at time of request 3. Concurrent medications (two of the following) a. Metformin for at least thee months: 1,500mg/day b. Sulfonylurea for at least three months: i. glimepride 4mg/day, ii. glipizide: 20mg IR/day, XL 10mg/day, iii. glyburide: 10mg/day, micronized 6mg/day, iv. chlorpropamide: 350mg/day, v. Tolazamide: 500mg/day vi. Tolbutamide: 1500mg/day c. Thiazolidinedione for at least three months: i. pioglitazone: 30 45mg/day ii. rosiglitazone: 8mg/day 4. Non-preferred Medication approval: a. If meet criteria approve for 1 year b. Re-approval: Must show weight loss and Hgb Alc reduction A health maintenance organization that covers prescription drugs but limits coverage to

4 Page 4 drugs on a formulary must provide certain exceptions. Section 3406o of the Michigan Insurance Code (MCL o) provides: An insurer that delivers, issues for delivery, or renews in this state an expense-incurred hospital, medical, or surgical policy or certificate that provides coverage for prescription drugs and limits those benefits to drugs included in a formulary shall do all of the following: * * * (c) Provide for exceptions from the formulary limitation when a nonformulary alternative is a medically necessary and appropriate alternative.... Victoza is not a covered drug under PHP s formulary. In order to determine if Victoza is a medically necessary and appropriate alternative, the Commissioner assigned the issue to an independent review organization (IRO) for analysis and recommendation. The review was conducted by a physician in active practice who is certified by the American Board of Internal Medicine with a subspecialty in Endocrinology, Diabetes and Metabolism. The reviewer is a member of the American College of Clinical Endocrinologists and the American College of Sports Medicine. The IRO reviewer recommended reversing PHP s denial of coverage for Victoza. In making this recommendation, the IRO reviewer observed: The [Petitioner] is intolerant to metformin and sulfonylureas and his Hba1c is not at goal. Victoza is an appropriate choice for additional therapy. Victoza is part of a new class of diabetic medications (GLP-1 agonists) that can be associated with significant weight loss. The American Diabetes Association considers as standard of care a Hba1c of <7.0% for microvascular complication prevention (ADA 2010). The [Petitioner s] Hba1c is not at goal (7.2% on 05/01/2010) putting him at increased risk for microvascular diabetic complications (retinopathy, neuropathy, nephropathy). Patients with type 2 diabetes mellitus who receive intensive glucose lowering therapy have lower risk of microvascular complications [citation omitted]. The health plan pharmacy benefit policy for GLP-1 Receptor Antagonist indicates that Victoza may be prescribed to patients with uncontrolled diabetes mellitus (Hba1c>8.0%) that have failed a three (3) month twomedication combination including unless otherwise contraindicated or intolerant a sulfonylurea, metformin, or a thiazolidinedione. The attending endocrinologist (XXXXX, MD) in his October 26, 2010, letter... has documented intolerance to two (2) out of three (3) agents

5 Page 5 ( has developed side-effects, including metformin and sulfonylureas ) therefore eliminating the feasibility of a three (3) month two-medication course of therapy. The health plan also requires an Hba1c>8% before approving Victoza, but this arbitrary level is not in keeping with the standards of care in the community. It is noted in relevant literature that the risk of microvascular (and probably macrovascular) complications increases for Hba1c>7%. The significant weight loss associated with GLP-1 agonists favors the addition of Victoza. Specifically, in September of 2009, the American Association of Clinical Endocrinologists (AACE), in its algorithm on glycernic management, recommended GLP-1 agonists as the preferred agents to be added to patients failing mono- or dual therapy [citation omitted]. Thus, it is the determination of this reviewer that the addition of Victoza is medically necessary. The Commissioner is not required in all instances to accept the IRO s recommendation. However, the IRO recommendation is afforded deference by the Commissioner; in a decision to uphold or reverse an adverse determination the Commissioner must cite the principal reason or reasons why the Commissioner did not follow the assigned independent review organization s recommendation MCL (16)(b). The IRO s analysis is based on extensive expertise and professional judgment. The Commissioner can discern no reason why that judgment should be rejected in the present case. Therefore, the Commissioner accepts the conclusion of the IRO and finds that Victoza is medically necessary for treatment of the Petitioner s condition. Under these circumstances, the Commissioner finds that PHP s denial was not consistent with the terms of the certificate and Michigan law. V ORDER The Commissioner reverses PHP s September 27, 2010, final adverse determination. PHP shall provide coverage for Petitioner s Victoza within 60 days of the date of this Order and shall, within seven days of providing coverage, provide the Commissioner with proof it has implemented this Order. To enforce this Order, the Petitioner may report any complaint regarding implementation to the Office of Financial and Insurance Regulation, Health Plans Division, toll free (877)

6 Page 6 This is a final decision of an administrative agency. Under MCL , any person aggrieved by this Order may seek judicial review no later than sixty days from the date of this Order in the circuit court for the county where the covered person resides or in the circuit court of Ingham County. A copy of the petition for judicial review should be sent to the Commissioner of Financial and Insurance Regulation, Health Plans Division, Post Office Box 30220, Lansing, MI