Getting the most from your benefits: the ACA gives consumers new right to appeal a health plan denial
By JoAnn Volk, Georgetown University Health Policy Institute
You may have heard about the troubled and uncertain fate of consumer appeals of Health Insurance Marketplace mistakes. While it’s clear that many people are submitting appeals of Marketplace denials, it’s not clear whether and how they’re processed. But another appeals system is working, and consumers enrolled in new coverage thanks to the Affordable Care Act need to know when and how to access it, especially as navigators and assisters shift from a focus on enrolling individuals in coverage to making sure individuals get the full benefit of their coverage. The ACA established new appeal rights for consumers facing a denial of a benefit or service from their health plan. As consumers start to use their new coverage, it’s worth taking a look at the health plan appeals process required of all new (non-grandfathered) plans and what these new rights mean for patients.
Prior to the ACA, consumers in all plans had a right to an “internal review,” in which consumers had a right to ask their health plan to reconsider an unfavorable decision. Most states also required health plans that sell coverage to individuals to provide for an “external review,” in which an outside, independent organization reviews the plan’s decision. But consumers in employer-based plans, which are governed by ERISA, didn’t always have access to an external review. The only way for those consumers to contest a health plan’s decision after an internal review was to pursue a lawsuit against the plan. The ACA extends the right to an external review to consumers across all new plans.
Studies that pre-date the ACA’s guaranteed appeal rights have shown that appealing a health plan’s decision frequently pays off for consumers who take the time to file an appeal. A study by the Government Accountability Office found at least 39 percent of coverage denials submitted for an internal review were reversed. And a Georgetown study by our former colleague Karen Pollitz found that consumers requested an external review infrequently, but where an external review was sought, health plan decisions were overturned about half the time.
What appeal rights does the ACA provide?
Under the ACA, individuals enrolled in a non-grandfathered plan can appeal the following adverse decisions:
- Refusal to cover out-of-network care;
- Determination that a procedure is not medically necessary
- Determination that a treatment is experimental
- Determination that a procedure or service is not covered under the plan.
The ACA also sets out specified time frames for plans to provide individuals with notice of a denial and, if appealed, a decision on the appeal. For example, plans must give notice of a denial within 15 days for prior authorization, 30 days for a service already received, and 72 hours for urgent care cases. Similarly, plans must give notice of a decision on an appeal within 30 days for prior authorization, 60 days for service already received, and for urgent cases, as quickly as the medical condition requires but within no more than 4 business days. Consumers, also have timelines to meet under the ACA rules. Individuals must request an internal appeal within 6 months of receiving a health plan denial, and must request an external review within 60 days of receiving a plan’s notice of a decision on an appeal.
Under federal rules, HHS determines whether states have an external review process that meets or exceeds minimum standards. Those that do meet minimum standards process external reviews for their residents, while HHS administers the external review process for states that don’t and for some in employer-sponsored plans. The ACA also requires plans to include information on how to appeal a health plan decision – including who to contact for an external review – on the Explanation of Benefits given to patients. You can learn more about health plan appeals, step-by-step, by visiting healthcare.gov.
These new rights give patients another opportunity to ensure their plan delivers on the promise of coverage for needed care. And that’s worth keeping in mind as millions of Americans gain coverage and tens of millions more enjoy new protections under their existing coverage.
