The Office of General Counsel issued the following informal opinion on September 24, 2002, representing the position of the New York State Insurance Department.
Re: Accident & Health Insurance, Time Limits on Appeal
Issue
If a health insurer does not meet a self-imposed deadline to respond to an appeal of its denial of a service, is its failure deemed to be an approval of the service?
Conclusion
Under the facts of this situation, the Insurance Law would not compel such a result. However, if the insurer had committed to such a deemer, its failure to meet the deadline would result in the service being deemed approved. The insurer, however, disputes that it failed to meet its self-imposed deadline.
Facts
An insured is covered by a health insurer and requested authorization for the administration of an injection by a physician three times a week for the insureds lifetime. By letter of April 5, 2002, the insurer notified the insured and the insureds physician that authorization was denied because, in the insurers view, the "care being requested does not require the technical skill of a health professional" in that the physician could teach the insured to self-administer the injections and the insureds condition could be followed periodically by the physician. In addition to informing the insured of his/her right to an internal appeal and possibly to an external appeal, the letter from the insurer stated:
[The insurer] has an expedited appeal process for cases involving continued or extended healthcare services, procedures, or treatments, requests for additional services for a member undergoing a course of continued treatment, or cases where the healthcare provider believes an immediate appeal is warranted, due to imminent or serious threat to the health of the member. . . . [The insurer] will decide your expedited appeal within one (1) business day of your appeal and the information needed to conduct a full and fair review. [The insurer] will notify you in writing within one (1) business day of the appeal determination. If [the insurer] fails to decide your appeal within this time, the service will be deemed authorized.
On April 8, 2002, the insured faxed the insurer an appeal setting forth the reasons why the insured believed the insurer to have been in error in denying the insureds request. By letter dated April 10, 2002 and postmarked April 11, 2002, the insurer notified the insured that its consultant had, after a review of both the information previously furnished and that which the insured had submitted on April 8, 2002, determined to uphold the previous non-authorization. The April 10, 2002 letter informed the insured of his right to an external appeal. Both the April 5 and April 10, 2002 letters informed the insured of the availability of the clinical criteria used in the determinations.
Analysis
New York Insurance Law § 4900(h) (McKinney 2000) defines utilization review as:
Utilization review means the review to determine whether health care services that have been provided, are being provided or are proposed to be provided to a patient, whether undertaken prior to, concurrent with or subsequent to the delivery of such services are medically necessary. . . .
New York Insurance Law § 4900(i) (McKinney 2000) defines utilization review agent as:
Utilization review agent means any insurer subject to article thirty-two or forty-three of this chapter performing utilization review and any independent utilization review agent performing utilization review under contract with such insurer.
New York Insurance Law § 4900(a) (McKinney 2000) defines adverse determination as:
Adverse determination means a determination by a utilization review agent that an admission, extension of stay, or other health care service, upon review based on the information provided, is not medically necessary
The insurer is a Health Service Corporation licensed by this Department in accordance with New York Insurance Law Article 43 (McKinney 2000 & Supp. 2002). It is, thus, a utilization review agent. The April 5, 2002 determination by the insurer not to authorize the services was an adverse determination.
New York Insurance Law § 4904 (McKinney 2000) provides, in pertinent part:
(a) An insured, the insured's designee and, in connection with retrospective adverse determinations, an insured's health care provider, may appeal an adverse determination rendered by a utilization review agent.
(b) A utilization review agent shall establish an expedited appeal process for appeal of an adverse determination involving (1) continued or extended health care services, procedures or treatments or additional services for an insured undergoing a course of continued treatment prescribed by a health care provider or (2) an adverse determination in which the health care provider believes an immediate appeal is warranted except any retrospective determination. . . . Expedited appeals shall be determined within two business days of receipt of necessary information to conduct such appeal. Expedited appeals which do not result in a resolution satisfactory to the appealing party may be further appealed through the standard appeal process, or through the external appeal process pursuant to section four thousand nine hundred fourteen of this article as applicable.
. . .
(e) Failure by the utilization review agent to make a determination within the applicable time periods in this section shall be deemed to be a reversal of the utilization review agent's adverse determination.
It is presumed that the insurer received the appeal fax on April 8, 2002, which was a Monday. Pursuant to New York Insurance Law § 4904(b), the insurer had until April 10, 2002 to make a determination. The insurer, however, committed itself to making a determination by April 9, 2002 and notifying the insured by April 10, 2002. It is the insurers position that it met this timetable, in that it attempted to contact the insureds physician by telephone, and that, only after it could not do so, did it mail a letter on April 10, 2002. Since this Department is not in a position to adjudicate this issue, it cannot confirm the insureds assertion.
For further information, you may contact Principal Attorney Alan Rachlin at the New York City Office.