I am writing as a consumer representative to underscore the critical importance of the new appeals provisions, especially as they apply to self-funded plans.
Advocacy for Patients with Chronic Illness, Inc. provides free information, advice and advocacy services to patients with chronic illnesses nationwide in areas including health insurance. In particular, we file hundreds of insurance appeals each year all over the United States, with both fully-funded and self-funded plans. Thus, we have both expertise and experience that underscores the importance to consumers of the new appeals procedures.
I personally have been filing insurance appeals for fifteen years. During that time, by far, the most important consumer advance to have occurred is the advent of the external appeal. The cases we take are extraordinarily challenging, cases that no consumer possibly could pursue on his or her own. Most of them involve off-label uses of drugs or devices, or other tests or treatments that insurers claim are experimental or investigational. These appeals require research in the medical literature as well as collection and summarization of the patient’s medical history to show that all traditional treatments have been tried and failed. More often than not, we lose at each level of internal appeal; however, about eighty-five percent of the time, we win at external appeal based on an independent review. Thus, the importance of these independent reviews cannot be over-stated.
Many self-insured plans have adopted independent reviews as the final step in the appeal process, and these independent reviews have generated similar results. We have won appeals on independent review initiated by the plans for Chrysler and General Motors, as well as several smaller self-funded plans.
Indeed, this week, we won an independent review of the decision of a self-funded plan after a particularly protracted battle. About a year ago, a woman with occipital neuralgia who had tried all traditional therapies sought prior authorization for implantation of an occipital nerve stimulator – the only treatment she had not previously tried. She pursued all levels of appeal and lost at each one. During the final internal appeal, she had an opportunity to address the appeal committee, which urged her to seek a second opinion at a teaching institution. Thus, rather than pursue independent review at that time, she agreed to seek further medical advice. Upon so doing, the same treatment was recommended, and a physician at a teaching institution submitted a new request for prior authorization, which again was denied. At that time, the consumer contacted us and we agreed to represent her in her appeals. We did an extraordinary amount of research and submitted an appeal consisting of over 500 pages of medical records and medical journal articles. Our internal appeal was denied yet again. However, this time, we pursued the independent review. While that review was pending, the consumer became so ill that she reluctantly decided to take a disability leave from work. Later that same week, we got word that the independent reviewer had decided in the consumer’s favor. She now feels hope that she had all but given up on.
This is not an unusual occurrence. Indeed, on occasion, we have even waived internal appeals to go immediately to independent review, and have prevailed.
Without independent review, though, consumers enrolled in self-funded plans are left without recourse. We recently handled a case for a consumer with gastroparesis, paralysis of the stomach. Several years ago, she had undergone surgical implantation of a gastric electrical stimulator which had completely alleviated her symptoms. However, the battery died and she needed to have the battery replaced. Unfortunately, her husband’s employer switched to a different third-party administrator (TPA) in the interim, and the new TPA denied the claims related to battery replacement on the ground that the device was experimental/investigational because it was approved by the FDA under a humanitarian device exemption rather than full pre-market approval. Although there now is published medical literature spanning ten years demonstrating the efficacy of this device, and although we knew with certainty that the device worked in this case, the TPA denied the claim. We then appealed to the plan administrator, who said he would not even consider overturning the TPA. There was no independent review. This matter now is pending in federal court.
This is a particularly salient example because we have filed more than fifty appeals for the gastric electrical stimulator over a six-year period and we have lost only one appeal on independent review; in every other case, where an independent review was available (and even in most internal appeals), we have won. Had we had the opportunity for independent review in this case, we firmly believe that this consumer would not have had to seek recourse in federal court.
Due to the Patient Protection and Affordable Care Act (ACA) and the implementing regulations, the next time that consumer’s device needs a battery replacement, the entire scenario will be different. Not only will she have a right of independent review, but we contend that the TPA and plan administrator will take a more careful, reasoned approach knowing that an independent reviewer will be looking over their proverbial shoulders.
If, as we have heard, self-funded plans are complaining to you and Secretary Sebelius about the external appeal and interim procedures, it is for just this reason: They are afraid that, if their decisions are subjected to independent review, their noncoverage decisions will be reversed. If they were not afraid of that – if they were confident in the propriety of their coverage denials – they would have nothing to fear from external appeals. The fact that self-funded plans are complaining about these new requirements is evidence in and of itself that the new requirements are necessary.
We understand that you and Secretary Sebelius have found it appropriate to waive certain requirements of the ACA in special cases, such as limited benefits plans. However, this is not such a special case. Indeed, of all of the provisions of the ACA that are taking effect now, we would argue that this one will have the most immediate meaning for consumers. Thus, we urge you to stand strong with consumers on this point and move forward with full implementation of the new appeal rules and, in particular, independent reviews of decisions made by self-funded plans.
Jennifer C. Jaff