When health care consumers experience an insurance denial and exhaust the internal appeal process as provided by their insurer, most people are unaware of or fail to act on an important consumer protection.
By law, consumers have the right to pursue an external review performed by an independent body or independent review organization (IRO), which may impact or possibly reverse the original denial.
Yet only a tiny percentage of health consumers – about one per 10,000 – request the external review of a denied insurance claim, according to a recent study from industry trade group AHIP.
That means that literally thousands of individuals are failing to take advantage of one of their most important rights as a health insurance consumer. And, by extension, some consumers may end up paying for a treatment or procedure that they might not have to.
It’s important for consumers to know about and understand how to access the IRO process, which serves both health care consumers and health plans in protecting the integrity of the independent external review process.
Consider the following example: Mr. Belvedere receives a prescription for an expensive drug from his oncologist to treat a serious case of thyroid cancer. While Mr. Belvedere assumes his insurance will cover the costs, he later finds out that the health plan has denied coverage. Under this scenario, it is within Mr. Belvedere’s rights to appeal the denied coverage. Typically, at the request of the consumer, a health plan will conduct two rounds of internal review before the claim is eligible for external review or can go to an IRO.
Ultimately, the IRO may determine that the medical necessity of the prescription drug has merit, and recommend that the insurance plan cover the costs. The final decision from the IRO is binding at the external review level.
“With greater awareness of the external review process, health consumers everywhere would realize that they have a valuable tool at their disposal – namely, the ability to dispute denied claims under an unbiased, independent external review process,” explains Gib Smith, Executive Director of the National Association of Independent Review Organizations (NAIRO), a group comprised of URAC-accredited IROs.
Consumers’ Rights for External Review
After internal appeals are exhausted, consumers should take note of the final adverse determination letter that they receive from their health insurer. It is the insurer’s duty to notify the consumer of their external review rights in the final adverse determination letter. (The insurer is also responsible for informing consumers of their right to internal appeal.)
While the scope and role of independent review has grown significantly over the past five years, few consumers utilize the process. In a recent white paper, NAIRO shed light on the underuse of external review, a big challenge that limits consumer protections.
“The key point in NAIRO’s paper is that the consumer has the ability to challenge their health insurance decisions. However, this remedy often goes unused,” notes Richard Lynch, Chair of NAIRO’s Membership and Marketing Committee.
IROs perform many types of review, from hospital claims to other more specialized medical services. In an effort to further secure the rights of patients and outline rules for all involved parties, legislation has expanded the scope and number of consumer protections. For instance, the consumer has a lengthy amount of time (four months) to request an external review, and the cost of external review is paid by the health plan.
Today’s URAC-accredited IROs are equipped to deliver several types of utilization review services, including retrospective reviews, conducted after services are provided to a patient; concurrent reviews, which take place during a hospital stay or course of treatment; and prospective reviews, also known as pre-certification reviews or prior authorizations, which occur before a patient is admitted or receives treatment.
Access the full white paper, Understanding the Vital Role of Independent Medical Review and Utilization Review Services, and learn more about consumer protections.