Imagine you’re a parent and your child has been diagnosed with cancer and is going through painful, debilitating treatment. You can imagine the sleepless nights, the worry, the exhaustion, the fear. Now imagine that your insurance company denies some of the claims for your child’s treatment – treatment that the doctors assure you are essential to saving your child’s life. If not paid by the insurer, the bills amount to tens of thousands of dollars – putting you at risk of bankruptcy. At a time when your sole focus should be – has to be – your child’s health, you are forced to spend hours on the phone, fighting with health plan bureaucrats.

For President Obama, it was exactly this type of situation that sparked his passion for health care reform. He watched his mother, dying of ovarian and uterine cancer, battle the insurance company from her hospital bed to get insurance coverage for which she’d faithfully been paying premiums. As he said in a 2009 speech to AARP: “That happens all across the country. We are going to put a stop to that.”

And he did. With passage of the Affordable Care Act, for the first time consumers across the country, no matter what plan they’re in, are empowered to appeal their health plans’ decisions to an independent, external review panel. This critical consumer protection is designed to stop the worst of insurance company abuses and was a great win for consumers. In fact, a recent study by the General Accounting Office found that when consumers appeal denied claims, the health plan has to reverse its decision as much as 50% of the time.

Yet, as with everything health reform related, the devil is in the details. And how the appeals provision is implemented matters just as much – if not more – than having the right in the first place. Unfortunately, in a regulation quietly released late yesterday, the Administration relaxed a number of requirements on health plans and insurers, making it more difficult for consumers to successfully pursue appeals. Here are a few specifics:

  • Scope of Review. The Administration has significantly narrowed the range of issues consumers can appeal. Originally the rules allowed consumers to seek external review of any adverse benefit decision (except eligibility for the plan). In the new version, consumers can only seek review for claims that involve “medical judgment” or a rescission of coverage. This means that any decision that’s considered “contractual” cannot be appealed to the external reviewer. For example, a plan’s determination that a particular service, drug, or supply is not covered would probably be considered contractual. Unfortunately, according to a recent AMA study, that’s one of the top reason patients’ claims are denied.
  • Urgent Care Claims. Originally insurers were required to make a decision on an emergency care claim within in 24 hours of receiving it. In this latest rule, in response to complaints from industry that the time frame was too “burdensome,” the Administration is giving plans up to 72 hours to make a decision. This, in spite of many comments from consumer groups and providers highlighting the need for fast turnaround in emergency situations.
  • Translations for Patients with Limited English. The law is clear: plans must provide enrollees with information about their appeal rights in a “culturally and linguistically appropriate manner.” Yet the Administration has significantly weakened this requirement. First, in only 6 counties in the country will plans be required to translate materials into any language other than Spanish. Second, plans only need to provide translations orally. If an enrollee wants translated materials in writing (kind of important if you’re going through the legalistic process of pursuing an appeal), they must proactively request them. Third, the Administration eliminated a requirement that plans keep a record of an enrollee’s language preference. That was, you guessed it, deemed too “burdensome” for the plans.
  • Allowing Plans to Forum Shop. Perhaps the craziest part of the new rules is that they allow plans to choose their own judge and jury. Thankfully, this won’t be true in all states. State laws that already have strong laws that ensure an independent, impartial review will not be preempted by the federal rules However, a significant number of states do not have adequate external review laws, and will be preempted by a federal process. The problem is, under the new rules, plans in states subject to the federal process will be allowed to choose their own external reviewer. This is at odds with the recommendations of the National Association of Insurance Commissioners (NAIC), whose model state law on external review requires that external reviewers be randomly assigned (not handpicked by plans) to ensure and independent, impartial process.
  • Giving Patients Less Time to File an Appeal. The earlier rule allowed consumers to have 120 days before filing the appeal. In response to complaints from insurance companies that this was too long, the new rule gives consumers only 60 days. Yet for someone struggling with pain, a recent surgery, rehabilitation, or other after-effects of an injury or illness, this time can pass in the blink of an eye. Many patients are likely to miss the deadline, and thereby miss their opportunity to correct an insurer’s bad decision.
  • Delaying Implementation. Finally, many of the new appeals protections were to have gone into effect next week.  But in March new rules gave plans until January 1, 2012 (some even later), to comply. For consumers, these delays effectively deny them access to an impartial, fair review of their claim.

Sadly, all of these changes add up to some unfortunate administrative hurdles that will prove challenging  for those parents fighting with their health plan to pay for the care essential to cure their child’s illness. Or for sons who must watch their mother battle cancer and her insurance company at the same time. On the other hand, the health reform law provides many of these same families with rights they didn’t have before. I hope that as we transition to 2014, and people gain more experience with their new appeal rights, we can convince policymakers to enact the necessary rules to make them real.

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