Odds of Winning in Independent Health Plan Review 50-50

March 19, 2002 (PLANSPONSOR.com) - In the 42 states with external review programs in place for the resolution of health plan disputes, decisions are made in favor of the consumers about half the time.

That’s the conclusion of a new study prepared for the Kaiser Family Foundation by researchers at Georgetown University’s Institute for Health Care Research and Policy. The research found that 45% of consumer appeals got fully overturned while 49% are fully upheld.

The review panels partly overturn plan coverage rulings an average 6% of the time, the study said.

The research also showed that despite external review programs being present in most states, they have generally been little used with only about 4,000 documented annual appeals.

Producing the largest number of claims was New York, which had 902 cases between July 1999 and June 2000, out of the 8.4 million residents estimated to be covered by the state law.

Researchers pointed out that some state programs might have effectively limited the number of consumer appeals through complex administrative procedures.

They said some of the programs might require:

  • that internal appeals to a health plan be exhausted before turning to the state,
  • filing fees, and
  • rules that set a minimum dollar amount that must be in dispute before an appeal can be filed

Pending Federal Legislation

The report also discusses pending federal legislation that may impact states’ external review programs.

Researchers said both the US House and Senate have passed bills that would establish a federal right to independent external review of health plan decisions for all privately insured individuals, including those in self-insured employer plans, who are now excluded from state programs.

However, the bills take different approaches to state laws.

The Senate bill would establish a federal floor for external review protections, leaving in place features of state programs that are more protective of consumers, but overriding those that are less protective, according to the study

The House bill, by contrast, would preempt all state external review programs, as well as state requirements for internal appeals, replacing them with a single federal standard. 
In addition to the pending federal legislation, a case currently under consideration by the US Supreme Court, Rush Prudential HMO, Inc. v  Debra C Moran, et al (see Supremes To Weigh In On HMO Review ) could also affect the future of state-run external review programs if the court rules that their decisions cannot
be binding on health plans that offer coverage purchased by employers.

Copies of study are available at the Kaiser Family Foundation Web site.