External review of health insurance carrier decisions advanced

Lawmakers gave first-round approval Feb. 4 to a bill 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.

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.

“Insurers would be responsible for reimbursing (IROs) for the cost of review,” Gloor said.

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.

Omaha Sen. Jeremy Nordquist spoke in support of the bill, saying access to an external review would help “level the playing field” for Nebraskans denied access to certain treatments by their health insurers.

“This is a big benefit to consumers going forward,” he said.

Sen. Steve Lathrop of Omaha questioned the standard of review that IROs would use and the exclusion of disability policies, but said he would take up those concerns on select file.

Senators voted 37-0 to advance the bill.