DCBS Media Release
July 25, 2002
New law allows external appeals of health care decisions
Health insurance benefit denials now may be subject to review by an independent medical review organization.
On July 1, Oregon's external review law, passed by the 2001 Legislature, took effect. It allows enrollees in state-regulated insurance companies whose health insurer has denied their internal appeal to request the opinion of a medical review team that is independent from the insurance company. The independent review organization (IRO) will consider claims that involve questions of:
External review is an option for health insurance denials that first were appealed after July 1, 2002.
Health insurers must notify all of their enrollees about external review and whether the insurer voluntarily agrees to be bound by IRO decisions or whether it reserves the right to force consumers into litigation to obtain contested benefits. If a company chooses to be bound, it can face fines of up to $1 million for not following the IRO's decision. If the company chooses not to be bound, a dissatisfied patient can sue the insurance company whenever it does not comply with an IRO decision.
To receive an external review, patients must ask their health insurer or HMO for an external review within 180 days of exhausting the insurer's internal appeal processes. Health plan benefit booklets describe companies' appeal processes.
The Oregon Health Plan and employer self-insured plans are exempt from the new law. Medicare also is exempt, but Medicare HMOs offer external review as part of their appeal processes.
Standard external reviews may take no more than 30 days. If a patient's health and well-being are threatened, a three-day expedited review may be requested. In either case, the insurance company pays the costs of the review.