Health Plan Policy Rescission Won’t Go Away, Says NAIRO

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Unfortunately over the years, lawsuits and related investigations suggest some health plans have used rescission to invalidate insurance policies for pre-existing conditions, unintentional mistakes, omissions or simply missing checkboxes on complex insurance forms. However, consumers seeking to appeal their insurer’s decision to rescind their healthcare insurance have the right to an external appeal.

“What is needed to address this issue is an unbiased independent rescission review process that meets both the needs of consumers and health plans,” said Seana Ferris, President of NAIRO.

Regardless of the outcome of the national health care reform debate, consumers, health plans and state insurance commissioners will struggle over insurance policy rescission, says NAIRO, a national association of IROs.

Guarding Against Fraud

Health plans use insurance policy rescission— declaring an individual’s health plan contract invalid — to combat insurance fraud and intentional consumer misrepresentation. Usually these issues are not discovered by the health plan until an individual files a medical claim.

Unfortunately over the years, lawsuits and related investigations suggest some health plans have used rescission to invalidate insurance policies for pre-existing conditions, unintentional mistakes, omissions or simply missing checkboxes on complex insurance forms. Using a process termed “post-claims underwriting,” the health plan invokes a rescission clause in the contract. The clause claims policyholders have intentionally misrepresented their health status or the health issues “pre-existed” their enrollment allowing the insurer to cancel the policy.

“What is needed to address this issue is an unbiased independent rescission review process that meets both the needs of consumers and health plans,” said Seana Ferris, President of NAIRO.

AHIP Guidelines Support Third-party Reviews

America’s Health Insurance Plans (AHIP) and NAIRO support an unbiased approach to rescission review. Recently AHIP published rescission review guidelines calling for health plans to conduct an “objective and thorough investigation prior to initiating the rescission process” for any claim denied based on a pre-existing medical condition. The AHIP guidelines encourage regulators to screen rescissions to determine their eligibility for external review. They also advocate a third-party reviewer must be independent from both the health plan and the consumer to ensure fairness. The guidelines further suggest health plans create standards to ensure rescission review is consistently applied, and includes specific timeframes for completion and expediting reviews.

Consumer Options for Review

Many health plans are adopting the use of IROs to provide an objective review of a member’s appeal of a rescission determination. However, part of the burden of a rescission review remains on the policyholder. According to most health plans and the AHIP guidelines, consumers should first exhaust their plan’s internal appeal process before requesting a third-party review through their state’s insurance commissioner or office of consumer protection.

Consumers seeking to appeal their insurer’s decision to rescind their healthcare insurance have the right to an external appeal. Some of the steps they must take to request an external review include:

  • Ask the health plan the specific reason for the policy rescission.
  • Carefully read the insurance policy and make a list of questions about the rescission.
  • Review the providers’ policy handbook to find the process time allotted for a rescission appeal request and confirm this with the health plan.
  • Contact the state insurance commissioner to answer any questions needed to start an external review.
  • Meet all external review related deadlines and ask questions along the way.
  • Keep copies of correspondence, phone calls, documentation and medical records regarding the rescission review request.

Delivering Unbiased Determinations

As a best practice, many health plans are now enlisting IROs to review rescissions on a case-by-case basis using standardized guidelines and expert review of the medical facts.
“IRO objectivity is the reason state legislators in 45 states and the District of Columbia have mandated the independent review of healthcare appeals,” Ferris said. “Using an independent and unbiased third-party to review rescission is a best practice that preserves the quality and integrity of our healthcare system and the rescission process.”

About NAIRO

NAIRO works to promote the value and integrity of the independent medical review process. Its members embrace an independent, evidence-based approach to medical review to resolve coverage disputes between enrollees and their health plans. For more information, visit http://www.nairo.org.

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Martin Middlewood

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