Sixteen of the 35 people who speak for consumers at the National Association of Insurance Commissioners (NAIC) want the NAIC to ask health insurers for more details about claim denials.
The working group is updating the Market Conduct Annual Statement (MCAS) for health, a form health insurers use to show regulators how they are behaving.
The consumer reps want the working group to add questions about how health insurers are handling requests for prior authorization of medical procedures.
The reps also want the health MCAS to get more information about health insurers’ formularies, or covered drug lists, and to find out what happens when enrollees ask for coverage for drugs that aren’t listed.
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The reps say state insurance regulators need to get more data from health insurers because the U.S. Department of Health and Human Services (HHS) has been slow to implement an insurer compliance oversight provision in the Patient Protection and Affordable Care Act (PPACA).
“Nearly six years after [PPACA] was enacted, the federal government has yet to put this provision into effect,” the reps say.
The reps note that the Employee Retirement Income Security Act (ERISA) definition of “claim” includes prior authorizations as well as claims that come in after services have been provided, but that the health MCAS has been using the Medicare definition of claim, which includes only post-service claims.
Medicare managers themselves have estimated that about 20 percent of claim denials are for prior authorization requests, the reps say.
“The denial of a prior approval request has, if anything, a greater effect on an enrollee than a post-service denial, as the enrollee in fact is denied the service,” the reps say.
The revised health MCAS should ask an insurer for the number of prior authorizations requested, the number approved and the number denied.
Similarly, to gauge the quality of formularies, the reps want the health MCAS to get the number of covered drugs as a percentage of all approved drugs; the percentage of on-formulary drugs in each coverage tier; the number of covered drugs affected by special utilization rules, such as special quantity limits; the number of requests enrollees make for coverage for off-formulary drugs; and the number of formulary exception requests that are denied.
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