Internal Claims and Appeals and External Review

HR Policy Association opposes PPACA’s provision creating new internal claims procedures and an unprecedented external review process for employer-sponsored self-insured health plans.  Under the health reform law, the benefit determinations of self-insured plans will not only continue to be subject to ERISA’s existing plan claims procedures (and any regulatory changes to those procedures), but they will also be subject to a new federal external review process.  This external review process requires employer plans to contract with three independent review organizations (IROs) to which claimants can appeal a plan’s benefit decision.  The decisions of IROs will be binding on both the claimant and the employer but may be appealed to federal courts under ERISA.  Thus, PPACA’s external IRO review is simply an unnecessary additional layer of administration that will increase costs and complexity.