- If a carrier denies services, can the denial be appealed, and if so, who has the right to present the appeal?
A carrier’s utilization management (UM) determination that is adverse to the interests of the covered person may be appealed. The covered person has the right to appeal the adverse UM determination. However, a covered person also has the right to allow a health care provider to make UM appeals on behalf of the covered person, and pursuant to federal law, a physician may make an appeal on behalf of a covered person without consent, if necessary, in emergency and urgent care situations (but note that carriers are not permitted to require prior authorization for emergency services under New Jersey law). If an appeal is to be made to the Independent Health Care Appeals Program, the covered person’s consent must be in writing, and accompanied by an authorization for release of the covered person’s relevant medical information.
- What is the UM appeal process?
New Jersey law sets forth a three-stage UM appeal process to address situations in which a carrier denies payment for covered services on the basis that the services are not medically necessary. A covered person, or a health care provider appealing on behalf of a covered person with the covered person’s consent, first makes an appeal to the carrier. At Stage 1, typically the carrier will have the case reviewed by another health care provider who was not involved in the prior decision. Stage 1 appeal determinations should be issued within 5 business days. If the covered person or health care provider acting on the covered person’s behalf is not satisfied with the Stage 1 UM appeal determination, then the appeal may be taken to Stage 2. At Stage 2, the carrier will have the case reviewed by a panel, which includes one or more health care providers of the type who would normally provide the services in question. Stage 2 appeal determinations should be issued within 20 business days. If the covered person or health care provider acting on the covered person’s behalf is not satisfied with the Stage 2 UM appeal determination, then the appeal may be taken to Stage 3. Stage 3 is the Independent Health Care Appeals Program, which is a program of the Department of Banking and Insurance. At Stage 3, the case will be reviewed by a medical expert under contract with an Independent Utilization Review Organization. The decision at Stage 3 is binding upon the carrier. For more detailed information, see How to File a Utilization Management Appeal and Independent Health Care Appeals Program.
- Must a UM appeal be initiated in writing?
A UM appeal does not have to be initiated in writing at Stage 1 or Stage 2 in order to be valid. However, a carrier may ask that the request be followed up in writing for the record. In addition, it is probably in the best interest of the appealing party to put the request in writing whenever feasible. At Stage 3, the appeal request MUST be in writing.
- What’s the difference between the Independent Health Care Appeals Program (IHCAP) and the Program for Independent Claims Payment Arbitration (PICPA)?
The IHCAP is a program that provides an independent external review about disputes regarding utilization management (UM) determinations. The IHCAP primarily reviews questions of whether a particular set of health care services are (or were) medically necessary for an individual’s care, including whether a service is medically necessary or cosmetic. The IHCAP will also review questions of whether a service is medical rather than dental, experimental or investigational, whether a condition was preexisting, and certain other questions where independent medical expertise is warranted. The PICPA is a program that provides an independent external review of claims payment questions that do not involve disputes regarding UM determinations. The PICPA will review questions of whether a claim was appropriately denied for administrative reasons, in a timely manner. The PICPA will also review questions of whether amounts paid on a claim were appropriate under the contract terms and applicable fee schedules, if any, under the circumstances, and whether interest was paid appropriately, if due. The decisions obtained through the IHCAP are binding on the carrier and the covered person, except to the extent that other remedies are available under State or Federal law. The decisions obtained through the PICPA are binding on both parties. The IHCAP costs a health care provider $25 to file the UM appeal, with the carrier paying the review cost of $788 (and up) after a decision is rendered. The exact cost to the carrier depends upon which Independent Utilization Review Organization (IURO) reviews the case. The cost of the PICPA’s review and arbitration fees is split between the health care provider and the carrier. Payment of half of the review fee and arbitration fee must accompany the arbitration request, and the remaining one half will be collected by the Arbitration Organization from the other party before arbitration begins. The exact cost for use of the PICPA services is not known at this time.
- Is the UM appeal process free?
It does not cost anything for a covered person, or a health care provider making an appeal on a covered person’s behalf, to file a UM appeal at Stage 1 or Stage 2. However, there is a modest filing fee for filing a Stage 3 (IHCAP) appeal.
- What is the cost for making UM appeals through the IHCAP?
There is a filing fee of $25.00 (which may be waived if the appeal is filed by a covered person who can prove financial hardship). The review fee, which varies depending upon which Independent Utilization Review Organization reviews the case, is paid by the carrier.
- Must a health care provider obtain consent from a patient in order to file a UM appeal with the IHCAP?
Yes. A health care provider does not have an independent right to appeal an adverse UM determination.
- When may a health care provider get consent from a patient to make a UM appeal on the patient’s behalf?
As of July 11, 2006, a health care provider may obtain consent from a patient to appeal an adverse UM determination on the patient’s behalf before or after services are rendered, or before or after an adverse UM determination is made. Of course, consent must be obtained prior to the expiration of the timeframe for filing the appeal.
- May a health care provider require a patient to complete a consent form as a condition of rendering services?
- Are there standards for who can be a personal representative signing the consent form on behalf of a patient?
Personal representatives include individuals with durable powers of attorney and guardians ad litum for a covered person/patient, in addition to parents and guardians of minors. Carriers may establish guidelines for who else may serve as the personal representative for purposes of providing consent to appeals. Please note, although health care providers may obtain consent prior to rendering services to a covered person, the health care provider does not have to do so, and may sometimes find it advantageous to wait for consent when it appears that the person’s competency is in question, but only temporarily.
- Will a single consent form suffice for multiple services provided on the same day, or for the same episode of care (at a hospital, for instance)?
The Department of Banking and Insurance believes a common sense approach should apply. In general, for in-patient care at a single facility, if there is one patient and one health event, only one consent form (MS Word) is necessary.
- May a single consent be used with respect to appeals with multiple carriers?
The consent is specific to the health care provider, not the carrier. So, if for some reason, an appeal needs to be made by the same health care provider to multiple carriers with regard to a single health event, one consent form would be adequate.
- What is the timeframe for filing a UM appeal?
It may depend on the stage of the UM appeal process, and how the patient is insured or covered. Federal law requires that people enrolled in group health plans have at least 180 days following receipt of an adverse UM determination to file for a Stage 1 UM appeal, but not everyone eligible to file a UM appeal is enrolled in a group health plan. The Department is encouraging carriers to comply with the 180-day standard across all of their lines of business, but some carriers may specify a shorter timeframe for filing Stage 1 or Stage 2 UM appeals when someone is covered under an individual policy or through Medicaid managed care plans. People enrolled in group health plans have 180 days following the receipt of an adverse UM determination to file a Stage 1 and Stage 2 UM appeal. For purposes of filing with the IHCAP, appeals must be filed within the four-month period after the covered person or health care provider receives a Stage 2 UM determination.
- Must a health care provider tell a patient about the health care provider’s intent to file a UM appeal on behalf of the patient, after getting the patient’s consent to such an appeal?
Yes. The Health Claims Authorization, Processing and Payment Act, “HCAPPA,” (P.L. 2005, c. 352) requires that a health care provider give notice to a patient of the intent to file a UM appeal prior to filing at each stage of the three-stage UM appeal process.
- Is there a specific period of time that a health care provider must wait after sending notice of an intent to file a UM appeal to the patient before actually filing the UM appeal?
- May a carrier require evidence that the health care provider gave notice to the patient of the health care provider’s intent to file a UM appeal before the carrier will process the appeal?
No. A carrier may request evidence that the health care provider gave appropriate notice of intent to file the UM appeal, but a carrier may not require such proof as a condition of accepting and processing the appeal.
- May the IHCAP require evidence that the health care provider gave notice to the patient of the health care provider’s intent to file a UM appeal before the IHCAP will process the appeal?
Yes, the IHCAP may and will require proof that appropriate notice was provided before accepting the UM appeal for further processing.
- What proof will the IHCAP accept that a health care provider sent a notice of the health care provider’s intent to file an appeal?
A completed copy of the notice for Stage 3, with a Delivery Confirmation notice from the United States Postal Service would be adequate. The IHCAP needs assurance that the health care provider made a valid attempt to deliver the notice to the address of the covered person (or the covered person’s representative) on file with health care provider.
- What information is the health care provider required to include when giving notice to a patient of an intent to file an appeal?
The Department of Banking and Insurance has developed notice forms for use by all health care providers, one each for Stage 1, Stage 2, and Stage 3 (MS Word). These forms are on the Department’s web site, and may be downloaded or saved electronically. These forms essentially: (1) remind the patient that he or she previously provided permission to the health care provider to file a UM appeal on the patient’s behalf; (2) tell the patient that the carrier rendered an adverse UM determination; (3) briefly explain the UM appeal process, and the health care provider’s intent to file an appeal; and, (4) provide minimum case-to-date data.
- May a health care provider use a generic consent form for the release of medical information (usually used to obtain payment from a third party) as evidence of the patient’s consent to have the health care provider make a UM appeal on the patient’s behalf?
No. The Department of Banking and Insurance has developed a form to be used for obtaining consent from a patient to representation by a health care provider in a UM appeal and the patient’s authorization to release medical records to the IHCAP. The form is entitled Consent to Representation in Appeals of Utilization Management Determinations and Authorization for Release of Medical Records in UM Appeals and Independent Arbitration of Claims (MS Word). This consent form also allows the health care provider to obtain authorization from the patient for release of medical records to the PICPA. In addition, the form provides a medium by which a patient may subsequently revoke his or her consent to representation and release of medical information.
- May a health care provider modify the Department’s consent form?
No. However, a health care provider may add its name to the form where indicated, and may make accurate translations of the form into additional languages as appropriate for the health care provider’s situation.
- Would a covered person’s signed consent be invalid if it failed to have the insurance identification number completed on the form (because patients often do not have insurance identification with them when they first arrive at a hospital)?
The form is valid when the covered person/patient (or personal representative) signs the form allowing a specified health care provider to appeal on the covered person’s behalf. The insurance ID number is convenient data to have available, but not necessary for purposes of the form being valid. Also, remember, although hospitals may present a Consent to Representation in Appeals of Utilization Management Determinations and Authorization for Release of Medical Records in UM Appeals and Independent Arbitration of Claims (MS Word) form upon admission, the hospital is not required to do so. If obtaining a covered person’s consent at a later point in time would be more advantageous for a health care provider, the health care provider may choose to wait.
- May a health care provider modify the Department’s Notice of Intent to File an Appeal forms?
Not generally. However, there is space for the health care provider to insert its name, and the name and address of the patient/covered person at the beginning of the notice, as well as space for the health care provider at the end of the notice to add closing information. If a health care provider needs to add information identifying the patient, carrier or health care provider that is different from what is requested in the forms already, the health care provider may do so in these areas. The Department of Banking and Insurance requests at this time that health care providers not add logos to the forms.
- Will the Department of Banking and Insurance be translating any of its forms into additional languages?
No. These forms are for distribution by health care providers to their constituency. The health care providers may make accurate translations of the forms as appropriate for their circumstances. (Please note, the Department of Health and Senior Services has posted some translations of some of the forms on the Office of Minority and Multicultural Health web page.)
- What policies are subject to review through the IHCAP?
All health benefits plans delivered or issued for delivery in New Jersey by a carrier, as these terms are defined at N.J.S.A. 26:2S-2, are subject to the review through the IHCAP if the policies include UM provisions in the policies. Most policies providing coverage of hospital and medical expense benefits that are delivered or issued for delivery in New Jersey are reviewable through the IHCAP. This includes, for instance, contracts between HMOs and the New Jersey Department of Human Services for Medicaid managed care. However, other government-sponsored coverage, such as Medicare, coverage through the Federal Employee Health Benefits Program (FEHBP), and the New Jersey State Health Benefits Program (SHBP), is not subject to review through the IHCAP (these each have their own review systems). In addition, the IHCAP does not provide reviews of issues arising with respect to self-funded health plans. Policies for coverage of dental services issued by dental service corporations and dental plan organizations are not reviewable through the IHCAP.
- What is required to be submitted in order to initiate an appeal through the IHCAP?
Detailed instructions are provided in the Application (MS Word) for the Independent Health Care Appeals Program. In general, a covered person should complete the Application (MS Word), include the Stage 2 UM determination from the carrier (or explain why one is not available), and a $25 check or money order made payable to the Department of Banking and Insurance. When a covered person is requesting that the fee be waived, the covered person must present evidence of eligibility for one or more government assistance programs. If a health care provider is making the appeal on behalf of the covered person, the health care provider should complete the Application (MS Word), include a copy of the completed Consent to Representation in Appeals of Utilization Management Determinations and Authorization for Release of Medical Records in UM Appeals and Independent Arbitration of Claims (MS Word), the Stage 2 UM determination from the carrier (or an explanation why one is not available), and a $25 check or money order made payable to the Department of Banking and Insurance.
- May a covered person or health care provider appealing on behalf of a covered person proceed directly to Stage 3 (IHCAP)?
No. An appealing party must exhaust Stage 1 and Stage 2 first. However, a carrier may waive its rights to make a Stage 1 and/or Stage 2 review, in which case, the Department of Banking and Insurance will consider the appealing party to have exhausted the UM appeal stage that was waived. In addition, if a carrier fails to render UM appeal determinations timely, the appealing party may proceed to the next stage without waiting further for the carrier’s UM appeal determination. Also, a covered person and/or provider may apply for an expedited external review at the same time as applying for an expedited internal appeal.
- Who reviews the Stage 3 (IHCAP) appeals?
The Department of Banking and Insurance contracts with multiple Independent Utilization Review Organizations (IUROs) to render decisions on cases accepted for review through the IHCAP. The IUROs, in turn, have the cases reviewed by licensed physicians and other medical personnel who would typically provide care for the type of condition, or would provide the types of health care services in question. The Department of Banking and Insurance assigns the cases to the IUROs on a rotating basis.
- What standards do the IUROs use in reviewing cases?
The IUROs consider the clinical criteria and protocols used by the carrier, as well as other generally accepted practice guidelines developed by the federal government, national or professional medical societies, boards or associations, the specific medical records and facts of the case at issue, and other medical literature that may be available, depending on the specific question presented.
- Is the IHCAP currently operational?
Yes, the IHCAP has been in operation since 1997. When the IHCAP first became operational, its decisions were not binding, but that changed in 2001. General information about the IHCAP’s activities is set forth in semi-annual reports prepared by the Department for the Governor and Legislature.
- What happens if the decision rendered through the IHCAP is in favor of the covered person or health care provider appealing on behalf of the covered person with consent?
When the IHCAP finds in favor of the covered person (or health care provider), the carrier must promptly provide coverage for the health care services found by the IURO to be medically necessary covered services.
- What happens if the covered person (or health care provider) does not agree with the decision rendered through the IHCAP?
If a covered person does not agree with the decision, the covered person may elect to obtain the health care services in question, but will be responsible for the associated costs. The IURO decision is binding on the covered person and carrier, except to the extent that other remedies are available to either party under State or Federal law.