Effective first of the plan year or after September 23, 2010 , health plans will have in effect internal claims appeal procedures. Each plan must allow the insured to review his or her plan to present evidence and testimony as part of the appeal process.
So what this means is if carrier declines a claim the insured now has the right to appeal the claim from an independent source. If the independent source declines the claim the insured can this go to the Department of Insurance and appeal the claim in person. So some could give their testimony in person to appeal the claim.
This would have a huge impact on experimental treatment. Almost all plans exclude experimental treatment but now the insured has a right to appeal the denied claim. For example if a family had a child that need a experimental heart transplant and received the treatment and the claim was denied. Now that family has multiple sources to appeal the claim. There is a very good possibility that if a family appeals that claim in person the chance of it being declined is a lot less. Who would decline a claims that saved a child’s life?
Now this does create some situations for groups that are self funded that use reinsurance. It is vital going forward that the contract states the re insurance will pay for that claim if its appealed and won. Other wise you could have a group that is self funded that is now responsible for paying for a very large claim. So any group that has re insurance contracts in place should be looking at the at this aspect very closely.
If a group is grandfathered in then they do not have to comply with this requirment of the health care reform.