1. Internal and External Appeals of Health Care Coverage Denials: One States Experience Conference Call Health Assistance Partnership August 12, 2004 Presenters: Pat Jones and Bruce Darwin Spector Division of Health Care Administration Vermont Department of Banking, Insurance, Securities and Health Care Administration

2. Vermonts Regulatory Timeline 1995 – Rights to one level of internal appeal and independent external review established for consumers with benefits managed by mental health review agents. 1997 –Rights to two levels of internal grievance established for consumers with managed care plans. 1999 – Rights to two levels of appeal extended to consumers of all insurance plans; independent external review process established for physical health denials. 2002 – Federal Department of Labor Claims Rule takes effect; impacts state regulations. ________________________ INTERNAL APPEAL RIGHTS FOR VERMONT CONSUMERS

3. Terminology Grievance – A written complaint submitted by or on behalf of a member regarding the availability, delivery or quality of health care services; claims payment, handling or reimbursement for health care services; or matters relating to the contractual relationship between a member and a managed care plan or the health plan insurer offering the managed care plan. -- Vermont Rule 10 Appeal – Consumer request to review denial of coverage; a subcategory of grievance. Internal Appeal – Consumer asks insurer to review denial of coverage. Independent External Appeal - Consumer asks external body to review denial of coverage (Independent Panel of Mental Health Providers for mental health or substance abuse appeals, Independent Review Organization for physical health appeals). ___________________________________ INTERNAL APPEAL RIGHTS FOR VERMONT CONSUMERS

4. Types of Grievances Denials of Coverage Pre-service vs. post-service Expedited vs. non-expedited (Vermont has adopted broad interpretation of expedited) Physical health vs. behavioral health Quality of Care Access to care (geographic, physical, language, waiting times) Provider performance (competence, office staff, office environment, confidentiality) Plan administrative performance (overall coverage issues, claims process, member service, plan documents) ____________________________ INTERNAL APPEAL RIGHTS FOR VERMONT CONSUMERS

5. Plans Subject to Vermonts Grievance and Appeal Regulations - All fully insured commercial insurance plans (Managed Care, PPO, Indemnity) Plans Not Subject to Vermont Regulations - Medicaid and Medicare have their own processes. - Self-insured ERISA plans are generally governed by the Federal Department of Labor. _________________________________________________________________ INTERNAL APPEAL RIGHTS FOR VERMONT CONSUMERS

6. Disclosure of Appeal Rights: A Key to Consumer Participation Very specific requirements for disclosure for both physical and mental health denials Disclosure elements include: Who made the decision Reason for the denial Information used to make the decision Additional appeal rights Contact information for the Office of Health Care Ombudsman Contact information for the Department _________________________________ INTERNAL APPEAL RIGHTS FOR VERMONT CONSUMERS

7. Making the Case for Overturning a Denial Know the policy terms and conditions. Know why the coverage was denied -Medical necessity -Investigational/experimental -Off-label use of drug -Plan rules not followed - Not covered under policy Add additional information related to why coverage was denied Consumers and Providers: participate in person or by phone, if possible Obtain assistance from Office of Health Care Ombudsman or other health assistance program. ___________________________________ INTERNAL APPEAL RIGHTS FOR VERMONT CONSUMERS

8. Outcomes of Internal Appeals Vermont data on eight managed care plans and managed behavioral health organizations, July 1 – December 31, 2003: -Grievances per 1000 members ranged from 0.1 to 18.4. -31% to 100% of all grievances were related to coverage/denials. -Appeals of coverage denials resolved in members favor after first level of appeal ranged from 4% to 46%. -Appeals of coverage denials resolved in members favor after second level of review ranged from 0% to 60%. -Very few physical health expedited appeals. -About half of mental health/substance abuse appeals were expedited. _______________________________________ INTERNAL APPEAL RIGHTS FOR VERMONT CONSUMERS