AMA: Insurer appeals rule must protect medical role

Washington -- An interim final rule creating a federal process to appeal health insurers' coverage denials doesn't sufficiently protect clinical decision-making, according to the American Medical Association.

In contrast, health insurance industry groups said the interim final rule, which spells out requirements in the national health system reform law, imposes unreasonable conditions on health plans, including a requirement that insurers include diagnoses and procedure codes in their benefit decisions.

The rule provides another recourse for people who unsuccessfully appealed their health plan's coverage denials or rescissions. It also creates a standardized external federal appeals process, under which health plans must, among other things:

• Explain coverage decisions in detail.
• Notify subscribers about their rights to appeal.
• Expedite appeals of urgent care decisions.

At least 44 states offer external appeals of health plan decisions, but state laws vary widely, according to the Dept. of Health and Human Services. The interim final rule directs states to adopt the federal standards by July 1, 2011. If not, the federal standards apply.

The rule applies to regular and self-insured health plans, but only plans created or significantly amended after Sept. 22, 2010. HHS estimated that this would include plans covering 41 million people initially, reaching 78 million by 2013. An independent third party appointed by the state -- paid for by health plans -- will make appeal determinations.

Comments on the interim final rule, which was released July 22, were due Sept. 22. The agencies said they intended to revise the rule in response to the comments.

Praise, criticism for interim rule

Generally, the AMA is encouraged and pleased by the rule's external review standards, but some provisions should be strengthened further, wrote AMA Executive Vice President and CEO Michael D. Maves, MD, MBA, in a Sept. 21 comment letter to HHS, the Internal Revenue Service, and the Dept. of Labor -- the agencies that wrote the regulation.

For example, Dr. Maves wrote, the rule relies on health plans' definitions of "medically necessary." Instead, the standard should be based on the AMA Health Insurer Code of Conduct, which specifies that medical care is necessary when a prudent physician would provide it to a patient based on generally accepted, clinically appropriate standards of medical practice. Other AMA comments recommended a similar strengthening of other rule language dealing with the medical necessity and evidence-based standards of health plan decisions.

Health insurers, however, objected to several requirements in the rule, according to Sept. 21 comment letters by America's Health Insurance Plans and the BlueCross BlueShield Assn.

For example, the rule requires insurers to include diagnoses and procedure codes in their explanation of benefits statements. Adding these codes and descriptions will lengthen these statements beyond their typical one page and actually could delay providing claims denial notices, wrote Jeffrey Gabardi, AHIP senior vice president for state affairs. Also, patients' medical privacy would be compromised if, for example, a spouse or relative accidentally opened a letter intended for the subscriber.

The rule's requirement to expedite urgent care benefit decisions also is too stringent, the insurance associations said. Health plans usually have 72 hours to notify subscribers about such coverage decisions, but the rule would shorten this to 24 hours. Health plans might not be able to get the necessary information from a medical facility on holidays and weekends, Gabardi wrote. Also, he noted, urgent care is not the same as emergency care. Health plans make urgent care decisions after a patient has been stabilized; emergency care is not subject to prior authorizations.

AHIP and the BlueCross BlueShield Assn. also objected to the rule's requirement that health plans send notices in languages other than English.

Instead, health plans should be allowed to offer translation services or make consumer assistance available in the subscribers' primary language, Gabardi's letter said.