Implementing Health Reform: External Review As An Example Of A Nuanced Regulatory Approach

Abstract

On Marcy 23, 2013, the United States will observe the third anniversary of the Affordable Care Act. On March 15, 2013, the Departments of Health and Human Services, Labor, and Treasury issued a joint technical release extending until January 1, 2106, the time states have to bring their external review procedures into compliance with the National Association of Insurance Commissioner’s External Review Model Act. While this release is not a major event in its own right, its history offers an excellent example of the course that the administration has taken over the past three years as it has implemented the ACA. Section 2719 of the Affordable Care Act requires non-grandfathered insured health plans to comply with state external review processes that at a minimum conform to the NAIC Uniform External Model Review Act. Insurers in states that have not adopted the NAIC Model Act and self-insured employee health plans must, under section 2719, offer their enrollees an external review process that meets minimum standards established by HHS through Guidance. The external review process is one of the ACA’s most important consumer protections. Group health plans deny the claims of almost two million plan members each year. Participants and beneficiaries of group health plans covered by the Employee Retirement Income Security Act (ERISA) can sue in federal court to challenge claim denials, while members of nongroup plans can sue in state court. But lawsuits are costly and time-consuming. External review by an independent review organization promises an inexpensive and expeditious alternatives means to obtaining an unbiased review of negative plan decisions.