One of the most significant consumer protections that the Affordable Care Act provides is the guaranteed right to appeal when your health insurer denies a medical claim or makes an adverse benefit determination. There are two levels for appeals – internal and external. With an internal appeal, the health plan reconsiders its determination. With an external appeal, the review goes to a third party reviewer, generally called independent review organizations (IROs), which are contracted to provide this service.
Prior to the ACA, most states had some form of external review, although the level of consumer protection they provided varied. And the states’ external review process didn’t apply to employer-based, self-funded plans (in which employers pay for medical claims directly). Under the federal law governing those plans, a covered worker who wanted an external review had to file a lawsuit in federal court. With approximately 55 percent of covered workers in a self-funded health plan, this meant that, as a practical matter, many consumers had no access to an external review process.
Now under the ACA, consumers with self-funded plans must have access to an external review from an independent third party. While the ACA guarantees consumers with private health insurance the right to appeal a denied claim to an outside, independent party, the administration recently codified rules still allowing barriers to exist when consumers try to exercise this right. For example, federal regulations permit about one-fifth of states (including states traditionally known for having strong consumer protections like Connecticut and New York) to charge a filing fee. Under federal regulations, the fee cannot exceed $25, must be capped at $75 annually, and refunded if a consumer is successful in the appeal.
Any fee, however, is a barrier to filing an external appeal, particularly because numerous other barriers already exist. Most consumers are not even aware the appeals process is an option for them. And even those who know are often battling illness, mounting bills from providers, and other life stress, making the effort to exercise their appeal rights challenging enough. One advocacy group points to its own experience with Medicare beneficiaries. The group finds that individuals don’t file an appeal for a variety of reasons and that any additional barrier would only further deter individuals from exercising their appeal rights. Medicare does not charge a fee for appealing.
The federal process for external appeals that is available to states without their own process does not require a fee. As implementation of this rule continues, states with filing fees associated with their external appeals process should reconsider. Exercising a right to externally appeal should not come at any cost to a consumer.