The law mandates that emplyees in non-grandfathered health care plans be able to request a federal external review if a claim is being denied. Under the interim final rules applicable to all plans with plan years on or after October 1, 2010, the group health plan must give claimants up to four months to request an external review after an adverse claim decision. As an example, lets say a patient disagrees with a decision by the insurance company to cover an FDA approved procedure or device deemed to be experimental by one of the four national [monopolistic -sarcasm mine] health insurance companies. This would be an adverse claim decision you may wish to appeal. An "adverse benefit determination" is by definition a denial, reduction, or termination of, or a failure to provide or make payment for, a benefit. Many employers already have claim review processes in place, but utilize ONE independent review organization. The new federal law will required to contract with AT LEAST THREE independent reivew organization and rotate claims assignments among them. The Feds must have feared market forces would have failed to keep the IROs honest if only one were required by law. This part of the law is a big shock to employers who must now bear the cost of coordinating this triple-contract vendor review. While employers can follow a state's external review as an alternative to federal, we will be encouraging our clients to follow a uniform process across multiple state sites. There are 43 IROs affiliated with URAC has accreditted and only 10 of these operate in multiple states.
Here are the timelines associated with the process:
- Claimants have four (4) months to request an external review
- Preliminary review must be completed within five (5) business days of request
- External review must be copmleted within forty-five (45) business days
- Claimant can ask for expedited review in life-threating situations
- IRO must turn expedited reviews around within 72 hours
When seeking to contract with an independent review organization (IRO), an employer or their consultant will want to find a large panal of physicians in multiple specialties with a geographic presence that aligns where your plan participants reside. Additionally, make sure they are a member of the National Association of Independent Review Organizations (NAIRO), as this is the "good housekeeping seal of approval" in the IRO business. The average cost for external review is around $600 and claims requiring. Not adhering to these rules can subject a health plan sponsor or health insurance issuer to a $100 per day per violation excise tax imposed under the Internal Revenue Code, in addition to giving the claimant a green light to file suit.
It is true that only a fraction of the health plan claims undergo appeal, but requiring THREE IRO's is TWO TOO MANY. Incidentally, my firm will soon be releasing guidance and recommended IRO's with model contract language as a service to our clients.