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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session


Posted: February 1, 2017 04:16 PM
From: Senator Stewart J. Greenleaf
To: All Senate members
Subject: Pennsylvania Health Insurer External Review Process
I am introducing the National Association of Insurance Commissioners (NAIC) model legislation that would enable the Pennsylvania Insurance Department (PID) to review and monitor external reviews of insurance coverage denials.

In recently reviewing a concern regarding coverage denial (age-based health discrimination) by insurers, I discovered that while the PID has significant authority to enforce the law regarding any improper denial of commercial insurance claims of which it is aware, the department does not have the ability to track claim denials that go through the external review process. Since Pennsylvania has not adopted an Affordable Care Act (ACA)-compliant process (i.e., NAIC model), when a policyholder receives a claim denial from an insurer (internal review), the appeal for an outside (external) review must currently go through a federal process sanctioned by the U.S. Department of Health & Human Services.

Under the NAIC model law, commercial health insurers must notify policyholders that they have the right to have the insurer’s decision reviewed by health care professionals who have no association to the insurer by submitting a request for external review to the Pennsylvania Insurance Commissioner. If eligible, the commissioner shall assign the policyholder’s appeal to an independent review organization for external review. The independent review organization shall be selected from a list of approved groups compiled and maintained by the commissioner.

In addition, the law requires the independent review organization as well as each health insurer to maintain written records (at least 3 years) on all requests for external review and, upon request, submit a report to the Insurance Commissioner. The report shall include information such as the total number of requests for external review; the number of requests resolved; a summary of the types of cases; and any other information the commissioner may request or require.

By adopting an ACA-compliant process, Pennsylvania will have the ability, like the majority of other states, to monitor current coverage denials by insurers through the external review process and take timely action against them regarding any issue that appears with frequency. Such a law would enable the PID to receive significantly more information about current denials/appeals which in turn would allow them to more quickly discover any issues (i.e., age-based discrimination) and respond to them. I view this as a consumer protection measure. This legislation was crafted with the assistance of the PID who is supportive of the measure.

Introduced as SB661