Appeal of Denial of Claims

Currently there is a patchwork of protections that apply to some plans in some states.  Some types of health plans are regulated at the state level and others at the federal level and they offer varying degree of protections to consumers.  For example, a person with cerebral palsy has few recourses when he is denied coverage for a specific type of therapy that has been recommended by his doctor.  Under the new law, he will have more opportunity to appeal the health insurance company’s denial of his claim.

What changes are made to strengthen appeal rights?

The new law requires greater consistency and puts standards in place to make the protections more uniform. The ACA makes changes to both the internal appeal process that an individual has with their insurance company and provides for an external appeal to an independent decision maker.

My plan already allows me to appeal a decision how is this different?

New health plans must now have an internal appeals process that meets these standards:

  • Allows consumers to appeal when a health plan denies a claim for a covered service;
  • Gives consumers detailed information about the grounds for the denial of claims;
  • Requires plans to notify consumers about their right to appeal and instructs them on how to begin the appeals process;
  • Ensures a full and fair review of the denial; and
  • Provides consumers with an expedited appeals process in urgent cases.

What is external review?

Being able to go outside the plan and have the conflict decided by an independent person.

What standards must they meet?

These standards were established by the National Association of Insurance Commissioners (NAIC). States are encouraged to make changes in their external appeals laws to adopt these standards before July 1, 2011. The NAIC standards call for:

  • External review of plan decisions
  • Clear information
  • Expedited access to external review in some cases
  • Health plans must pay the cost of the external appeal
  • Review by an independent body
  • Emergency processes for urgent claims
  • Final decisions must be binding

If state laws don’t meet these standards, consumers in those states will be protected by comparable federal external appeals standards.

Do these changes apply to grandfathered plans?

No, they only apply to new plans.

What is the federal government doing to help consumers understand these changes?

The new Consumer Assistance Grants program will provide nearly $30 million in new resources to help States and Territories educate consumers about their health coverage options, empower consumers, and ensure access to accurate information. Grants will be made available to support States’ efforts to establish or strengthen consumer assistance programs that provide direct services to consumers with questions or concerns regarding their health insurance.