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Appeal rights for Health Insurers under the Affordable Care Act

The Affordable Care Act (ACA) provides that insurance companies who offer Qualified Health Plans (QHPs) through the federal Health Benefit Exchange must meet a wide range of regulatory requirements. Final regulations were published in the Federal Register on October 30, 2013 regarding the appeal rights of insurance companies after ACA sanctions related to the federal exchange. The appeal rights for state Exchanges may be similar, but must be assessed for each state before relying on the federal counterpart. Insurance companies offering QHPs through state exchanges must meet both applicable federal and state requirements, and can also be sanctioned for failures to adequately meet ACA requirements.

Appeals are first to be heard by Administrative Law Judges (Examiner's) of the Appeals Board of HHS, who are to have all authority granted by the federal Administrative Procedures Act (APA). A request for a hearing must be filed within 30 days of issuance of a notice of proposed assessment or decertification, to the address provided on the notice. This request must provide factual and legal detail regarding the basis for the appeal. The examiner will review all of the information and documents timely received. In reaching a decision, the examiner will review the claim de novo and not be bound by any decisions or conclusions reached during the health insurance issuer’s internal claims and appeals process applicable. The examiner is too forward all documents submitted directly to the examiner by the claimant. Upon receipt of any information submitted by the claimant, the examiner must within one business day forward the information to the health insurance issuer.

Upon receipt of any such information, the health insurance issuer may reconsider its adverse benefit determination or final internal adverse benefit determination that is the subject of the external review. Reconsideration by the health insurance issuer must not delay the external review. The external review may be terminated as a result of the reconsideration only if the health insurance issuer decides, upon completion of its reconsideration, to reverse its adverse benefit determination or final internal adverse benefit determination and provide coverage or payment. Within one business day after making a decision to reverse, the health insurance issuer must provide written notice of its decision to the claimant and the examiner. The examiner must terminate the external review upon receipt of the notice from the health insurance issuer.

The examiner must provide written notice of the final external review decision as expeditiously as possible and within 45 days after the examiner receives the request for the external review. The examiner must deliver the notice of final external review decision to the claimant and the health insurance issuer. The examiner’s final external review decision notice will contain:

(i) A general description of the reason for the request for external review, including information sufficient to identify the claim (including the date or dates of service, the health care provider, the claim amount (if applicable), the diagnosis code and its corresponding meaning, the treatment code and its corresponding meaning, and the reason for the previous denial, including denial codes);

(ii) The date the examiner received the assignment to conduct the external review and the date of the examiner’s decision;

(iii) References to the evidence or documentation, including the specific coverage provisions and evidence-based standards, considered in reaching its decision;

(iv) A discussion of the principal reason or reasons for its decision, including the rationale for its decision and any evidence-based standards that were relied on in making its decision;

(v) A statement that the determination is binding except to the extent that other remedies may be available under State or Federal law to either the health insurance issuer or to the claimant;

(vi) A statement that judicial review may be available to the claimant; and,

(vii) Current contact information, including phone number, for any applicable office of health insurance consumer assistance or ombudsman established under ACA Act.

After a final external review decision, the examiner must maintain records of all claims and notices associated with the external review process for six years. The examiner must make such records available for examination by the claimant or health insurance issuer upon request. Upon receipt of a notice of a final external review decision reversing the adverse benefit determination or final internal adverse benefit determination, the health insurance issuer immediately must provide coverage or payment (including immediately authorizing or immediately paying benefits) for the claim.

As noted in the regulations, all hearings before an examiner are on the record. The examiner may receive arguments or testimony in writing, in person, or by telephone.” However, testimony by telephone is to take place only if “in the interest of justice and economy” and if not unduly prejudicial. An attorney to appear in the matter must “promptly” file a notice of appearance. After receipt of the request for hearing, the examiner will provide instructions to the parties. The insurance company must file a brief within 60 days of the receipt of these instructions. HHS must then file a response brief within 30 days. Each party is entitled to file a posthearing brief. A final order by the examiner may be appealed to U.S. District Court, but such an appeal must be made within 30 days.

The attorneys at Dalton & Tomich plc look forward to representing the health insurance industry with respect to the appellate process under the Affordable Care Act.

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