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CCH® BENEFITS — 12/23/10

Current State Of External Claim Review Process Is Examined

from Spencer’s Benefits Reports: Twenty-six individuals and organizations responded to a request for comments on operational issues associated with implementation of a federal external claims review process in states that do not have their own external review process.

Public Health Service Act Sec. 2719(b)(1), added by the Patient Protection and Affordable Care Act, and related regulations provide that the Department of Health and Human Services’ Office of Consumer Information and Insurance Oversight (OCIIO) and the Department of Labor’s Employee Benefits Security Administration (EBSA) are authorized to establish an external review process that is similar to a state external review process for group health plans and health insurance coverage if a state has not established such a process.

Many of the commenters cited URAC as the recognized accreditation agency that currently conducts independent reviews for insured plans, and URAC itself provided detailed comments on how its review and accreditation process works.

For example, URAC noted that the organization’s “Independent Review Organization Standards currently apply to IROs [Independent Review Organizations]. URAC’s HealthStandards Committee reviews and updates the standards pursuant to market changes and emerging quality assurance issues on a regular basis.”

In response to the question, “What considerations must be taken into account to smoothly transition from the current federal interim external review process to a possible new permanent federal external review process?” URAC provided the following recommendation:

“To ensure a smooth transition from the interim process to a permanent process, URAC recommends that OCIIO and EBSA maintain the accreditation requirement for IROs. In doing so, OCIIO and EBSA can ensure that IROs contracting with the federal government to conduct external reviews meet current industry benchmarks and have policies and procedures in place to protect the interests of the patient through the external review process.

“In addition, OCIIO and EBSA should recognize URAC’s Health Utilization Management (HUM) accreditation programs. While IRO accreditation focuses on the processes and credentials of independent organizations conducting benefits and clinical reviews, HUM accreditation ensures the health plan or third party administrator internal medical necessity reviews are in compliance with industry standards and federal regulations.”

Self-Funded Plans

In its comments, the Business Roundtable provided the following information about external review of medical claims for large, self-funded plans:

“Although there is no requirement to do so, many self-insured plans already voluntarily provide for an external review of denied medical claims….Though we know of no broad statistical data on this subject, it is our belief that as many as 30% to 40% of large employers with self-insured group health plans provide some form of external review for certain medical claims. Just as one finds variation among states in their requirements for independent external review for insured health plans, similarly there is considerable variation among self-insured plans in the procedures they use for external review.”

Among self-insured group health plans that provide external review, the Business Roundtable identified the following procedures as typical:

According to the Business Roundtable, “In current practice, many of the self-insured plans currently using independent reviews contract with an outside reviewer that the plan has selected. Increasingly, however, there appears to be a greater movement toward using independent review organizations with which the self-insured plan’s Third Party Administrator contracts.”

For more information, visit http://www.dol.gov/ebsa/regs/cmt-1210-28876.html.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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