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Few patients opt to appeal HMO denials

States await a U.S. Supreme Court decision that could affect their external review laws for managed care; a national law is still an option.

By Tanya Albert, amednews staff. April 8, 2002.

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Nearly every state allows patients to seek external review when their physicians and HMOs disagree on treatment. But a new study shows patients aren't flocking to use the laws, even though those who do often get coverage denials overturned.

Forty-one states and the District of Columbia have external review laws, but only about 4,000 appeals are documented annually, according to a recent Kaiser Family Foundation report.

While the number of patients appealing managed care decisions is low -- for example New York's 8.4 million covered patients filed 902 cases in a one-year period -- the results have been relatively positive for those who pursue external review, the report found.

On average, 45% of coverage denials were reversed nationwide. That ranged from a low of 21% overturned in Arizona and Minnesota to a high of 72% in Connecticut, the report showed. About half of the states allow reviewers to partially overturn decisions. On average, that happened 6% of the time in those states.

The results indicate that the external appeals system needs work, Kaiser officials said. "It illuminates that it's not enough to just pass a law," said Larry Levitt, the foundation's vice president. "I don't think anybody would want to see these systems flooded with appeals, but you do want people to know about it."

Independent external review laws, which vary greatly in their specifics, have been around for decades. Michigan was the first to adopt such a law in 1978. Most other states passed their own versions only in the past few years. Twenty-seven laws became effective in the past three years, according to the Kaiser study. [...]