Few Patients Use External Review Programs to Resolve Disputes with Health Plans, New Report Finds
Although health plan members who file complaints with state external review programs have their treatment denials overturned almost half of the time on average, the external review process is used infrequently, according to a new report released by the Kaiser Family Foundation. Researchers at Georgetown University's Institute for Health Care Research and Policy examined external review programs, which are designed to resolve coverage disputes between health plans and members, for the 41 states that have them, as well as for Washington, D.C. (KFF release, 3/19). Researchers found that the rate at which external reviewers overturned benefit denials averaged 45% nationwide and ranged from a low of 21% in Arizona and Minnesota to a high of 72% in Connecticut. In addition, the report found that about 50% of states allow reviewers to partially overturn health plan denials, which they did about 6% of the time. But according to the report, health plan members infrequently challenge benefit denials through the external appeals process. In New York, the state with the highest number of appeals, only 10.7 cases per 100,000 were externally reviewed. External review caseloads in other states "were much smaller" (Pollitz et al., "Assessing State External Review Programs and the Effects of Pending Federal Patients' Rights Legislation," 3/02). Researchers proposed several reasons for the low number of appeals, including state requirements that health plans' internal appeals processes be used before external reviews are conducted, external appeal filing fees and minimum limits on the amounts that must be in dispute in order to file an external appeal (KFF release, 3/19).
Additional findings in the report include:
- Differing standards for external review: In 27 states, regulators choose the external reviewer, while in 14 states the health plan or member picks the reviewer. In 10 states, the health plan chooses cases eligible for external review, and in seven states, the external reviewer must follow the health plan's definition of medical necessity.
- Differing timelines for external review: Review times varied from five days to 60 business days, although all states provided an "expedited process" -- usually less than 72 hours -- for urgent and emergency review cases.
- External review as binding: External review is a "statutory right" in all 42 states, and in 39 states, external review decisions were binding for health plans ("Assessing State External Review Programs and the Effects of Pending Federal Patients' Rights Legislation," 3/02).
The report also examined proposed federal legislation to create a patients' bill of rights, which would allow all privately insured individuals to seek external review. Currently, 47% of workers who have employer-sponsored health insurance are barred from using state external review programs because they are in "self-insured" plans, which provide coverage directly from the employer rather than through an insurance company. Federal law does not allow subscribers in self-insured plans to seek external review (KFF release, 3/19). A proposed Senate bill would set a minimum standard for external review for all health plan subscribers that would preempt any weaker state programs but permit stronger programs to continue. A House proposal would set a single standard to preempt all state external review programs. The bills are "similar in most respects," according to the report, and it is unclear how they would preempt state programs in practice ("Assessing State External Review Programs and the Effects of Pending Federal Patients' Rights Legislation," 3/02). The full report is available online. Note: You will need Adobe Acrobat Reader to view the report.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.