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Monday, August 2, 2010

Appealing insurance company denials just got easier

Erin Kelly

Staff Writer

A single mother goes to see her doctor in search of a treatment for the pain caused by her multiple sclerosis, which has persisted through many different treatments. Her doctor tells her about a new drug that has just come out that might finally do the trick and writes her a prescription. Excited, the mother goes to the pharmacy. But to her dismay, the pharmacist says that he can’t give her the drug unless she pays $150 on the spot. Her insurance company has denied her claim, saying it won’t cover the drug because it considers it “experimental.” The mother doesn’t understand why, after paying premiums for her insurance every single month and always following her doctor’s orders, she’s being denied coverage for the one drug that might help her.

Is there something she can do? The short answer is both yes and no.

Before health reform passed, consumers had the right to appeal denials by insurers through an external reviewer—an objective, third party with no financial interest in the outcome of the case—but only if they lived in certain states or had a certain type of plan. For example, residents of Maryland had the right to appeal through an external reviewer, but the residents of Alabama? They were out of luck. The insurer would have the final word on whether or not it will pay your claim. And if your employer purchased insurance for you, you could appeal externally; but if your employer was “self-insured” (they pay the medical bills) you wouldn’t have the same legal rights.

This patchwork system helped some, but left many at the mercy of insurance companies’ decisions. When someone’s claim was denied, they’d have few options to appeal the denial. But thanks to the new law, things are about to change.

The new health reform law and recently released regulations require that every state has a process for external appeals. Self-insured plans must also have a process for external appeals, which is beneficial to the more than half of American workers.

According to the White House,

by next year, an estimated 31 million people in employer-sponsored plans and another 10 million people in individual plans will benefit from the new appeals rights.

And to ensure that consumer assistance programs are better able to help people file appeals under their new rights, the health reform law allocates $30 million this year to help establish or strengthen these programs.

This is a huge step forward in leveling the playing field between consumers and insurers.