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The New Rules for Insurance Appeals Under PPACA

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BY KATHERINE MATOS

On July 22, the Obama Administration released interim final rules that allow patient appeals of health insurance coverage decisions as required under the Patient Protection and Affordable Care Act (”PPACA”) and Health Care and Education Reconciliation Act (”Reconciliation Act”).  Published by the departments of Health and Human Services, Treasury, and Labor, these rules create standards for the internal and external processes by which patients can appeal adverse benefits decisions.

Prior to these rules, coverage appeals were governed by contract and State law.  Forty-four States have created some form of external appeal process for insurance coverage decisions; however, their coverage is limited and the processes vary greatly.  Effective January 1, 2003, changes to the Employee Retirement Income Security Act of 1976 (”ERISA”) regulations provided standards for internal appeals processes.  However, these standards only apply to employer-sponsored group health insurance.

As stated in the Obama Administration fact sheet entitled, “Appealing Health Plan Decisions,”

Today, if your health plan tells you it won’t cover a treatment your doctor recommends, or it refuses to pay the bill for your child’s last trip to the emergency room, you may not know where to turn. Most health plans have a process that lets you appeal the decision within the plan through an “internal appeal” — but depending on your State’s laws and your type of coverage, there’s no guarantee that the process will be swift and objective. Moreover, if you lose your internal appeal, you may not be able to ask for an “external appeal” to an independent reviewer.

Internal Appeals Process

Under the rules, new health plans beginning on or after Sept. 23, 2010, must have an internal appeals process for beneficiaries to challenge “adverse benefits decisions” — a “denial, reduction, or termination of, or a failure to provide or make a payment (in whole or in part) for a benefit.”  Such adverse benefits decisions may be based on individual eligibility, benefit coverage, limitations on otherwise covered benefits (such as preexisting condition exclusions, source-of-injury exclusions, and network exclusions), and a determination that a benefit is experimental or not medically necessary.

In addition, health plans must do the following:

  • Notify a claimant of a benefit determination as soon as possible;
  • Provide claimants, free of charge, with the evidence relied upon and the rationale for the decision;
  • Avoid conflicts of interest by making decisions regarding hiring, compensation, termination, and promotion independent of a claims adjustor or medical experts record of denial of benefits; and
  • Meet additional requirements for notice, including information on internal appeals and external review processes.

However, these requirements do not pertain to so-called “grandfathered health plans” — those health plans that were in existence before March 23, 2010 when PPACA was enacted.  In the individual market, health insurance providers must meet the foregoing requirements as well as the following three:

  • Applicants for individual insurance must be allowed to appeal initial eligibility determinations;
  • Internal review must be limited to a single level, allowing claimants to appeal to external or judicial review immediately; and
  • Insurers must maintain all claims and notices for a minimum of six years, which is already required of employer-sponsored health plans under ERISA.

External Appeals Process

If the internal appeal is denied, patients may choose to have the claim reviewed by an independent reviewer.   According to Appealing Health Plan Decisions, States are encouraged to adopt the National Association of Insurance Commissioners (NAIC) standards in “their external appeals laws to adopt these standards before July 1, 2011.”

The NAIC standards call for:

  • External review of plan decisions to deny coverage for care based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit.
  • Clear information for consumers about their right to both internal and external appeals — both in the standard plan materials, and at the time the company denies a claim.
  • Expedited access to external review in some cases — including emergency situations, or cases where their health plan did not follow the rules in the internal appeal.
  • Health plans must pay the cost of the external appeal under State law, and States may not require consumers to pay more than a nominal fee.
  • Review by an independent body assigned by the State. The State must also ensure that the reviewers meet certain standards, keep written records, and are not affected by conflicts of interest.
  • Emergency processes for urgent claims, and a process for experimental or investigational treatment.
  • Final decisions must be binding so, if the consumer wins, the health plan is expected to pay for the benefit that was previously denied.

If State laws don’t meet these standards, consumers in those States will be protected by comparable Federal external appeals standards.

As Kaiser Health News reported, “This is a regulation that benefits everyone — consumers get protections, business and providers get more certainty in the rules and the need for litigation to settle these issues should be dramatically minimized,” Phyllis Borzi, assistant secretary of the Department of Labor, said at a briefing for reporters Thursday.

Consumer Assistance Grants

However, procedural rights for consumers are not sufficient to ensure proper appeals.  “Not enough consumers know this is an option that they have,” said Angel Robinson, the consumer advocate in the Iowa Insurance Division, according to Kaiser Health News.

In addition to the new requirements for internal and external appeals processes under the interim final rules, the federal government is offering nearly $30 million in resources to States and Territories to strengthen and establish consumer assistance programs.  Specifically, these programs are charged with:

  • Helping consumers enroll in health coverage;
  • Helping consumers file complaints and appeals against health plans;
  • Educating consumers about their rights and empowering them to take action; and
  • Tracking consumer complaints to help identify problems and strengthen enforcement.

Katherine Matos is a 3rd year student at Seton Hall Law and a regular blogger at Health Reform Watch.com. [http://www.healthreformwatch.com/] She is the principle inventor on a patent application in the field of medical imaging, resulting from her research as a student at Stevens Institute of Technology. After graduating with degrees in biomedical engineering and history in 2008, she volunteered with the Irish government in the Health Services Executive. At Seton Hall Law, Katherine has researched federal oversight of nanotechnology with Professor Jordan Paradise and non-profit governance with Professor Melanie DiPietro. She worked as a summer associate at Fitzpatrick, Cella, Harper & Scinto in 2009 and at Robinson & Cole in 2010.

The Yellow Stickie Ain’t Dead Yet

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By HERBERT MATHEWSON, MDHUB's LIST

I’m sure that many of us “old timers” can remember the early days of computer implementation in our hospitals. At that time you couldn’t help but notice the dozens (or more) Yellow Stickies plastering the nurses’ station computers, usually around the monitor’s edges, filled with keywords, short cuts, new jargon, and other information helpful to them as they strived to give up their dependence on paper. Well, thirty years later, the Yellow Stickie ain’t gone just yet.

I had to go into my hospital last week to get an intravenous infusion to help me with the effects of a neuropathy. The receiving desk at the IV Infusion Center had three computer monitors with two people sitting at them. My physician’s orders were already printed out and were attached to my computer printout encounter form. After receiving my computer generated ID bracelet with bar code, I was lead into a room with four chairs, each one next to a computerized infusion pump with blinking lights and various sounds to convey different messages to the nurses caring for me. Each pump had touch-screen data entry and a multiple color display combined, was capable of at least three distinct alert sounds, and was neatly packaged to fit on a standard IV pole. The combination of four such poles, two automatic blood pressure machines with their display screens and alert sounds, the usual wall of oxygen, suction, electrical outlets, and signal lights, a R2D2-size mobile air conditioning unit standing in the middle of the floor with its coiled, white PVC exhaust duct winding to the wall, and four brand new baby blue Barca Loungers made me think that this is what a passenger cabin on a space ship would look like.Continue reading…

In the Public Interest

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By JOHN MOORE

John Moore  The Health Information Exchange (HIE) market is the Wild West right now.  Vendors are telling us that theyre seeing an unprecedented level of activity both for private and public HIEs.  Private HIEs are being set-up by large and small healthcare organizations to more tightly align affiliated physicians to a hospital or IDN to drive referrals and longer term, better manage transitions in care in anticipation of payment reform.  Public HIEs are those state driven initiatives that have blossomed with the $560M+ of federal funding via the HITECH Act.

But this mad rush is creating some problems.

While the private HIEs seem to have their act together in putting together their Request for Proposals (RFPs), such is not the case for the state-driven initiatives.  Rather then formulating a long-term strategy for the HIE by performing a needs assessment for their state, setting priorities and laying out a phased, multi-year strategy to get there, far too many states are trying to “boil the ocean” with RFPs that list every imaginable capability that will all magically go live within a couple of years of contract reward.  Now it is hard to say who is at fault for these RFPs, is it the state or the consultants they have contracted with that formulated these lofty, unreachable goals, but this is a very real problem and unfortunately, the feds are providing extremely little guidance to the states on best practices.

Continue reading…

Facepalming Our Way into the Future

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By JOE FLOWER
Joe Flower

The reform isn’t perfect, but maybe it’ll help us avoid disaster.

The rapidly ramifying crisis in health care may (we can pray) end all delusions. It may at least begin to weaken them by exposing them to the light, to the sobering effects of reality.

The reform act has not brought us to the Promised Land. By bringing us access without capacity, fierce restrictions coupled with vague language and loopholes, mandates coupled with fines low enough to become the cheap way out, strong new ideas that are only pilots, and tough commissions and task forces that have no teeth, the reform act delivers us into a period of maximum melee, in which the needs and desires of hospitals, doctors, citizens, politicians, insurers, drug companies, device manufacturers and hundreds to thousands of niche industries within the sector, get pitted nakedly against one another.

Everyone in this melee will increasingly be driven by the ratcheting drumbeat of cost, cost, cost—which is another word for over-use of resources.

It can seem at times like a kind of existential madness. But in fact we are engaged in a struggle over the very meaning and substance of who we are, what we do and why we do it. We can hope that at last and increasingly, we will be shedding our delusions and engaging in that struggle on the basis of some kind of reality.

Stupidity Everywhere

You know the facepalm moment. It’s that moment when you smack your hand on your forehead, accompanying the concussive thwap with the expletive of your choice, when confronted by a bit of numbskullery so dense as to tear the space-time continuum.

Continue reading…

Interview with Aneesh Chopra

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By Matthew Holt

At the Health 2.0 Washington DC Conference on June 7, 2010 we captured this interview with Aneesh Chopra, Federal Chief Technology Officer of the United States.

Not All Ratings Are Equal

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By JOHN MORROWPicture 30

Earlier this month USNews and World Report released their annual list of America’s Best Hospitals. This list is terribly misleading and is a disservice to the readers of that magazine, in my opinion. The fine print is revealing:

“Central to understanding the rankings is that they were developed and the specialties chosen to help consumers determine which hospitals provide the best care for the most serious or complicated medical conditions and procedures—pancreatic cancer or replacement of a heart valve in an elderly patient with co- morbidities, for example. Medical centers that excel in relatively commonplace conditions and procedures, such as noninvasive breast cancer or uncomplicated knee replacement, are not the focus.”

Since when did breast cancer and knee replacements become so commonplace that they didn’t matter? On July 19, The New York Times published Doubt About Pathology Opinions for Early Breast Cancer, suggesting that diagnosing Stage 0 breast cancer was fairly difficult. And what is the bright-line test between “uncomplicated” and “complicated” knee surgery?Continue reading…

Use Emotion to Drive Adoption—Not Rejection—of Health IT

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By LYGEIA RICCIARDI

Last week I heard uber marketer Seth Godin speak about the power of fear. Fear is one of the strongest human emotions, based in the core of our brain–the “lizard brain” that evolved prior to our higher order thinking skills. Fear served us well throughout most of ancient history (stay away from the tiger!)–but it’s not always productive in modern day society.

Consumer fears about health information technology (health IT) privacy are a case in point. Surveys show that more than half of consumers voice fears which are, (in my opinion) appropriate, to an extent: risks such as discrimination are real, and public concerns should hold policymakers, vendors, and providers to the highest standard of privacy protection.

The real problem is fear mongering. Debroah Peel, founder of Patient Privacy Rights, has put herself and her organization on the map with sensationalism. As she said in a KTVU report earlier this month: “Anything that’s in there, any information that’s in there, can and will be used against you in the future. It’s very important to know that in the electronic health world…” and, “This is a nightmare. It’s nothing we’ve ever seen before in medicine.”

Extremist statements like this are usually misleading and often just plain wrong.. But a response that focuses on the logical and rational alone doesn’t cut it.  In March Peel wrote an opinion for the Wall Street Journal online called “Our Medical Records Aren’t Secure.”

It got 179 comments. A measured rebuttal by Mary Grealy, President of the Healthcare Leadership Council, got only 4.Continue reading…

The Reform Dartboard: Predicting Healthcare Costs

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By Roger Collier

Roger Collier

One thing about a democracy, everyone is entitled to publish their predictions about the future, and on the costs (or savings) of the Patient Protection and Affordable Care Act over the 2010-2019 decade, there are enough to cover the dartboard.

Whether any have hit the bull’s-eye is another question.

The two most authoritative darts so far are those of the CBO and CMS’ Office of the Actuary. Each assumes that reform will be implemented exactly as stated in the new law, with no successful legal challenges and with legislated cost reduction targets achieved. The CBO forecast is limited to federal spending, while the OA projections cover both federal and overall national expenditures.

The CBO’s well-publicized (by reform advocates, anyway) dart hit the board immediately prior to passage of PPACA with an estimate of federal savings of $86 billion (excluding advance premiums from the new CLASS long-term care insurance program), or slightly less than one percent of projected federal health care spending.

The OA dart, thrown a month later and applauded by reform opponents as contradicting the CBO forecast, landed on the $289 billion number for increased federal spending (prior to CLASS premium collections), and on $310 billion for increased national health care expenditures.

Continue reading…

Not So Meaningful EHR Certification

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By MARGALIT GUR-ARIE

Can you buy an ONC Certified EHR, or EHR module, and discover to your chagrin that no matter how hard you try, Meaningful Use is not within reach?

While the spotlights were shining brightly on CMS and ONC as the final definitions of Meaningful Use (MU) and EHR certification criteria were being released, NIST quietly posted its (almost) final definition of EHR testing procedures for certification. The procedures still need ONC’s stamp of final approval, but it seems that this is just a formality. In the past I expressed misgivings regarding the “lightness” of the draft version of the NIST testing procedures, so naturally I was curious to see the final documents. Although some problematic procedures were simply removed from the final version, others still remain.

Thus the answer to the opening question above is a resounding Yes.

In an attempt to part ways with the heavy handed CCHIT certification model, NIST adopted a simplistic, narrowly defined set of testing procedures. Vendors, particularly small ones who never underwent CCHIT certification, will likely be happy with the latitude afforded by NIST. However, the lack of specificity may very well place unsuspecting physician buyers in a bad situation, and here is how.

  • §170.302(h) – Incorporate laboratory test results: The final ONC certification rule does not require a particular standard to be used by the EHR for receiving structured lab results. All comments submitted to ONC requesting standard specification have been rejected in the interest of flexibility. Adhering to the ONC ruling, NIST allows the EHR vendor to select any format they desire for certification purposes. A comma or pipe delimited text file will do.National reference labs, like Quest and LabCorp, as well as smaller regional labs and hospital labs, are all standardized on some minor version of the HL7 2.X standard for transmission of lab results. An EHR, or EHR module, passing ONC certification with anything but the industry accepted HL7 standards will be unable to connect to any laboratories. The “older” EHRs, which have submitted to CCHIT certification in the past, all have working HL7 lab interfaces. The concern is with brand new products, certifying for the first time.

    Assuming the EHR, or EHR module, has HL7 capabilities for lab results, there is still a major hurdle to overcome. National reference labs have long implementation queues and stringent testing and certification processes of their own. It may take 6 months or so, for a new EHR vendor to establish the first live interface with a reference lab. Any subsequent interfaces must also undergo testing and could also take months to create, depending on both vendor and lab availability of resources.

    For a physician contemplating the purchase of a particular EHR this translates into a need to obtain documented proof from both the EHR vendor and the Lab(s) that operational interfaces exist for the Laboratories used by the practice. It also requires that you factor in the additional time it will take to create your particular interface(s).

  • §170.304(b) – Electronically exchange prescription information: NIST has decided that for certification purposes, only the ability to send out a new prescription will be tested. The entire test procedure consists of generating NEWRX messages according to the SCRIPT standard and sending them to a vendor identified external system. Successful testing is decided based on the correctness of the generated message. An EHR, or EHR module, conforming to this particular test is not guaranteed to be able to satisfy the MU criterion. Not by a long shot.EHRs need to connect to the Surescripts network in order to send prescriptions electronically to pharmacies. Surescripts requires the EHR vendor to go through an arduous testing process prior to being allowed to use the network. The ability to send out new scripts is only a small part of Surescripts testing. The vendor must have the ability to also receive error response messages from Surescripts and the pharmacy, receive and respond to refill requests from the pharmacy and send renewal messages to pharmacies. Surescripts must also be satisfied that the EHR’s user interface conforms to Surescripts standards. Surescripts certification is a lengthy process and it is not unusual for it to extend well beyond eight months.

    In a nutshell, a physician aiming to become a meaningful user and collect Government incentives must ensure that the ONC certified EHR about to be purchased is also Surescripts certified. ONC certification for this core MU requirement is meaningless.

  • §170.302(d) – Maintain active medication list: The minimalistic NIST test procedure for this criterion will not affect Meaningful Use or stimulus incentives. It may, however, adversely affect patient care. This test procedure actually presumes that each time a prescription is modified, such as changing dosage or frequency, any and all previous history of said prescription is erased. For example, if a few weeks ago you prescribed Celexa 20mg and today you and the patient decide to increase the dose to 40mg, the medical record will show that the patient was started on Celexa today, and the dose is 40mg. There will be no visible trace of the 20mg regimen in the EHR.Again, “older” EHRs, having gone through CCHIT certification at some point, will probably retain correct medication histories. New EHRs and EHR modules, written to the NIST testing specifications, may not. Unlike lab interfaces and electronic prescriptions, there is no obvious third party verification to look for when shopping for an EHR. This type of problem will not be discovered by a prospective buyer until the EHR has been purchased, installed and used for some time. At that point, with histories lost, the only recourse would be to request the vendor to provide an enhancement to certified functionality.

These are just the most obvious problems. Generally speaking, the test procedures are so narrowly defined that recording such things as who modifies allergies, vital signs, medications or problem lists, or when these were modified, or why, are not a requirement for passing the tests. Presumably, these are all recorded in the audit logs, but there is no specific inspection of the logs and anyway clinicians are not going to consult audit logs on a routine basis. Many other test procedures are of similarly superficial nature, suggesting that NIST is not attempting to certify a product as much as it is trying to certify a technology framework which could be ultimately used to build a meaningful product.

Bottom Line: Physicians need to understand, and ONC needs to clarify, that although required by CMS, ONC EHR certification does not guarantee availability of all EHR features and functionalities required to achieve Meaningful Use.

Margalit Gur-Arie blogs frequently at her website, On Healthcare Technology. She was COO at GenesysMD (Purkinje), an HIT company focusing on web based EHR/PMS and billing services for physicians. Prior to GenesysMD, Margalit was Director of Product Management at Essence/Purkinje and HIT Consultant for SSM Healthcare, a large non-profit hospital organization.