Insurance carrier decision review, rate approval sought

The Banking, Commerce and Insurance Committee heard testimony Jan. 29 on two bills meant to bring Nebraska into compliance with federal health care reform efforts.

LB147, introduced by Grand Island Sen. Mike Gloor at the request of the Nebraska Department of Insurance, would fulfill a mandate required under the federal Patient Protection and Affordable Care Act (ACA) that states adopt a process for external review of internal decision-making by health insurance carriers.

LB147 would require health insurance carriers to notify covered individuals of their right to request an external review and of the availability of expedited review in certain cases.

Except in cases of expedited review, a covered individual would be required to exhaust the carrier’s internal grievance process unless the carrier fails to issue a written decision within 30 days or waives the exhaustion requirement. The cost of independent reviews would be paid by health insurance carriers.

An independent review organization (IRO) would be required to make a determination within 45 days, or within 72 hours in the case of an expedited review. The bill outlines a separate process for external review of decisions denying coverage on the grounds that the health care service is investigational or experimental.

Among other provisions, the bill would require IROs to be:

• nationally accredited;
• approved by the director of the Department of Insurance;
• free of material or other conflict of interest in a dispute under review; and
• shielded from liability for damages unless acting in bad faith or involved in gross negligence.

LB147 would apply to any claim submitted on or after Jan. 1, 2014.

Nebraska Department of Insurance director Bruce Ramge testified in support of the bill, saying states that do not adopt laws consistent with national standards will be subject to federal administration of external reviews.

Policyholders in Nebraska are accustomed to dealing with the Department of Insurance when they have complaints, Ramge said, so having the state in charge of the new external review process would reduce policyholder confusion.

Jan McKenzie of the Nebraska Insurance Federation also testified in support, saying a measure based on model national legislation would ensure a level playing field for Nebraska health insurance carriers who also operate in other states.

“We support the department’s efforts to create a business friendly environment for the industry,” she said.

Also introduced was LB336, sponsored by Holdrege Sen. Tom Carlson, which would require state regulation of all health insurance rates for policies issued in Nebraska subject to the federal Patient Protection and Affordable Care Act.

Ramge supported the bill, saying it would ensure Nebraska compliance with the ACA.

No opposition testimony was offered on either bill. The committee voted 8-0 to advance both bills to general file.