2nd Cir. Rules Utilization Reviewer Was Exempt 'Professional'

Seyfarth Synopsis: The Second Circuit has affirmed summary judgment for the employer, Aetna, in an exempt misclassification overtime claim brought by a nurse reviewer. Agreeing that the plaintiff was properly classified as a "professional" employee and thus exempt from the FLSA, the Second Circuit explained that clinicians who do not directly provide medical care qualify for the exemption if they make the final decision to approve payment for medical services.

Background

Plaintiff Isett worked as an appeals nurse, reviewing claims for coverage of medical services for which Aetna had denied coverage, in order to determine whether to override the denial and approve payment for the services. Working remotely from home without much oversight, Isett reviewed patients' medical files to determine whether the requested services were medically necessary, as defined in the insurance plans and clinical guidelines. If so, she approved payment without further review, thus binding Aetna to pay for the services.

If she determined that the services were not medically necessary, Isett was required to forward the appeal to a licensed physician for a final decision; Isett did not have authority to deny any claims without such further review. While not stated in the court's opinion, it appears that Isett did not communicate with any medical provider to make her decisions. She reviewed only the paper medical files.

Court's Analysis

The Court of Appeals concluded that Isett was properly classified as an exempt professional employee. The court emphasized at the outset that the exemption must be given a fair, as opposed to narrow, reading, relying on the Supreme Court's 2018 opinion in Encino Motorcars, LLC v. Navarro.

Because the plaintiff conceded that her work satisfied the second prong of the professional exemption (work in a field of science or learning), the opinion focused on the first and third prongs.

First Prong: Work Requiring Advanced Knowledge

The Court of Appeals noted that the exemption's first prong requires work that includes the consistent exercise of "discretion and judgment," but distinguished that standard from the requirement of the administrative exemption, quoting the applicable regulation: "the discretion and judgment standard for the professional exemption is 'less stringent' than the discretion and independent judgment standard of the administrative exemption." The court noted that 1) the burden to satisfy the discretion standard is "not...