A few days ago, HHS Secretary Kathleen Sebelius came forth with one more goodie from the new reform law: the right to appeal a coverage decision made by a health plan. It’s yet another in a series of positive talking points to soften up the electorate before they realize that the punitive parts of the law are yet to come—the tax penalty for not buying insurance, and potentially huge out-of-pocket costs for required coverage not subsidized by the government. Said the Secretary:
The Affordable Care Act puts patients in control of their healthcare. Today, if your health plan tells you it won’t cover a treatment your doctor recommends…you may not know where to turn. The Affordable Care Act provisions announced today will provide patients with new important new rights and resources that will help ensure they get the care they need.
The media did what presumably the administration had hoped: they wrote stories following the White House script (PDF), and passed along the notion that somehow letting people appeal adverse coverage decisions by their health plan would give them control of their health care, as if they have all the choice in the world. In reality, all but five states have had an external appeals process for years, an outgrowth of the managed care backlash of the 1990s.
Consumers must first appeal a denial of service to the HMO; then, if they are turned down, they can appeal to an independent external review panel. In most states, the panels have worked pretty well, although a study done in 2004 by Consumers Union and the Kaiser Family Foundation found that consumers too often made mistakes—like not appealing first to their health plan, failing to follow the time limits, and not providing enough documentation for reviewers to judge their case. Generally, they must prove why a treatment is medically necessary. About half the time consumers win; half the time insurers do.
As one state insurance department official told me: “The new regulations simply preserve the status quo and get someone else enforce them.” In other words, the feds—not the states—will make sure the appeals mechanisms run smoothly and conform to some national standards. They also force the missing states into the fold, and give appeal rights to workers in self-insured plans—the kind where employers bear the risk and hire an insurer to pay claims.
But unless you live in one of these states—according to Kaiser, North and South Dakota, Nebraska, Alabama, and Mississippi—or belong to a self-insured plan, the new regs probably won’t mean very much. And if you are in a “grandfathered plan,” that is, one that existed before the law passed in late March, you won’t be able to appeal any decision period. In fact, the administration says it expects consumers to file only 2600 appeals in 2011.
The press coverage was disappointing, given that a track record for external appeals exists. Most reporters didn’t offer context or make the calls necessary to give the full picture of what Madame Secretary was really offering.
Even a story by Kaiser Health News did not refer to the substantial and credible work done by its parent organization, the Kaiser Family Foundation. I know the news service says it’s independent, but here was a time to reach back into the files. Instead of digging into how consumers fared when they filed appeals, it relied on the White House and reported that “On average, about 40 percent of denials are reversed on external appeal, according to commentary that was issued along with the regulations today.”
So 60 percent are not? Why? Reasons why patients are successful or not would have been far more interesting and useful than the weak anecdote stuffed into the story about a man who found the appeals process “exhausting.” Duh! Any kind of legal proceeding usually is, and the new rules won’t change that.