New Rules Thursday On Appealing Insurance Claims, States Take Lead In Health Reform Implementation

Kaiser Health News /The Washington Post obtained a summary of new rules to be released Thursday by the Obama administration that will make it easier for consumers to appeal the denials of their health insurance claims as the White House tries to "boost political support" for the new health law. "The regulations guarantee consumers the right to appeal denials — directly to their insurers and then, if necessary, to external review boards. The external-review requirement will apply, for the first time, to companies that are self-insured — ones that pay their employees' claims directly rather than buying insurance to cover their workers. … Most states already guarantee consumers the right to external appeals, though their rules vary widely..." The rules take effect on Sept. 23 but don't apply to "grandfathered" plans — those that existed on March 23, when the law was signed. That status can be lost, however, if changes are made to plan coverage or cost. Also,  the change doesn't happen until July for states with their own external review laws, giving them time to adjust to new standards (Galewitz and Andrews, 7/22).

The Associated Press/Los Angeles Times - reporting on Thursday afternoon, after the issuance of the new rules - adds that the process will be a "two-stage" one. "First, consumers will appeal directly to the insurer. If they get a second denial, they can appeal to an independent reviewer whose decision is binding. Consumers can also use the system if their coverage gets canceled… Starting next year, about 40 million consumers in employer and individual plans will benefit from the new protections. That number is expected to grow to as many as 88 million by 2013. About 160 million Americans are covered by workplace policies, and another 17 million buy their coverage directly from an insurer." (7/22).

In the meantime, Politico reports that while the administration makes rules for parts of the health reform law, Congress "has left some of the most difficult decisions" to state insurance commissioners. "The National Association of Insurance Commissioners, which is made up of the top insurance regulator from each state, must draft recommendations or consult on 10 of the reforms or programs enacted in the health care overhaul, such as restrictions on how much an insurance company can spend on overhead and the establishment of state insurance exchanges." The association is in Washington to discuss the issues (Haberkorn, 7/22).

Earlier, related KHN coverage: Insurance Regulators Wrestle With Definition Of 'Unreasonable' Rate Increases (Appleby, 5/17).

Meanwhile, U.S. News & World Report reports that hospital readmission rates "are getting intense are getting intense scrutiny now that health reformers have promised to slash spending and improve care by penalizing institutions [through Medicare] that overdo it. … While the new Medicare penalties won't take effect until October 2012, hospitals have some experience with such a system. Uncle Sam currently doesn't pay for a readmission on the same day as a discharge, unless it's for an unrelated reason. But the new law goes much further, directing Medicare to recover payments made for unnecessary readmissions within 30 days of discharge after a stay for three conditions: heart attack, pneumonia, and heart failure. In the first year, a hospital's total Medicare payments can be reduced by up to 1 percent. The cap rises to 2 percent the next year, and 3 percent the third year. CMS eventually will add more diseases to the list" (Carrns, 7/21).

U.S. News & World Report also has a table of the hospitals with the lowest and highest readmission rates (Carrns, 7/21).

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