Internal Reviews of Consumer Health Plan Appeals Tainted by Conflict of Interest, Says NAIRO

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Health insurance plans using their own doctors to review member appeals is a conflict of interest, because these doctors are subject to the plan's management directives, such as the need to cut or contain costs. By using internal doctors as reviewers, health plans can appear "denial driven" and more worried about finances than using the newest medical services and technologies to improve patient outcomes. The Patient Protection and Affordable Care Act HR 3590 Section 2719 covers internal and external reviews and must remove conflict of interest for health plans using doctors on their payroll to review appeals.

The intent of HR 3590 is well meaning

NAIRO, a trade organization of independent review organizations, says the Patient Protection and Affordable Care Act HR 3590 needs more regulatory control to protect consumers when health plans deny their coverage. A key part of the legislation, Section 2719, calls for health plans to impose effective internal and external appeal processes when they deny members coverage. Without further regulations that clarify these processes, the bill does not protect consumers against health plan conflict of interest.

Health Plan Appeals Conflicted

"Part of the intent of HR 3590 is to protect healthcare consumers by strengthening their appeals process," said Seana Ferris, President of NAIRO. "But many health plans are compromised by conflict of interest, because they often use their own doctors to perform first and second level appeals of denials."

Health Plan Doctors and Conflict of Interest

Health insurance plans using their own doctors to review member appeals is a conflict of interest, because these doctors are subject to the plan's management directives, such as the need to cut or contain costs. By using internal physicians as reviewers, health plans can appear "denial driven" and more worried about finances than using the newest medical services and technologies to improve patient outcomes.

"NAIRO is concerned about potential and apparent conflict of interest in appeals," said Ferris. "For the self-insured, ERISA and Department of Labor regulations specify an independent medical review of appeals to protect health plan members against unjustified denials of claims. These existing Federal and state regulations for self insured plans should also be enacted in the fully insured market."

Third Parties Offer Objectivity

While many health plans continue to use their own doctors, some have reduced conflict of interest concerns by using independent review organizations (IROs) to review patient claim denials as a best practice. Others use IROs to provide suitable specialists for reviewing appealed cases.

"The intent of HR 3590 is well meaning," Ferris said. "However, in its current form, it fails to state that internal appeals must avoid conflict of interest to assure health plan members get the treatment they paid for. We suggest doctors who practice the same or similar specialty and who are not on a health plan's payroll, review appealed cases to decide them based solely on medical evidence."

Consistent National Appeal Process

NAIRO proposes consistent national legislation requiring health plans to use independent doctors outside the health plan for internal reviews of appeals. The trade group believes IRO involvement would remove otherwise conflicted decision-making, promote evidence-based medical decision making and assure consumers receive the care they pay for.

"As federal regulators work to flesh out the details of Section 2719, we believe it's critical for them to consider how to reduce the effects of conflict of interest on appeals," Ferris said. "Requiring health plans to use independent third parties to review patient claims denials guarantees that all consumer appeals receive an objective, evidence-based review to preserve the integrity of the 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 for resolving coverage disputes between enrollees and their health plans. For more information, visit http://www.nairo.org.

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Martin Middlewood
NAIRO
360-882-1164
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