N.Y. Insurance Law § 4914: Procedures for external appeals of adverse determinations

§ 4914. Procedures for external appeals of adverse determinations. (a)

The superintendent shall establish procedures by regulation to randomly

assign an external appeal agent to conduct an external appeal, provided

that the superintendent may establish a maximum fee which may be charged

for any such external appeal, or the superintendent may exclude from

such random assignment any external appeal agent which charges a fee

which he deems to be unreasonable.

(b) (1) The insured shall have four months to initiate an external

appeal after the insured receives notice from the health care plan, or

such plan's utilization review agent if applicable, of a final adverse

determination or denial, or after both the plan and the insured have

jointly agreed to waive any internal appeal, or after the insured is

deemed to have exhausted or is not required to complete any internal

appeal pursuant to section 2719 of the Public Health Service Act, 42

U.S.C. § 300gg-19. Where applicable, the insured's health care provider

shall have sixty days to initiate an external appeal after the insured

or the insured's health care provider, as applicable, receives notice

from the health care plan, or such plan's utilization review agent if

applicable, of a final adverse determination or denial or after both the

plan and the insured have jointly agreed to waive any internal appeal.

Such request shall be in writing in accordance with the instructions and

in such form prescribed by subsection (e) of this section. The insured,

and the insured's health care provider where applicable, shall have the

opportunity to submit additional documentation with respect to such

appeal to the external appeal agent within the applicable time period

above; provided however that when such documentation represents a

material change from the documentation upon which the utilization review

agent based its adverse determination or upon which the health plan

based its denial, the health plan shall have three business days to

consider such documentation and amend or confirm such adverse

determination.

(2) The external appeal agent shall make a determination with regard

to the appeal within thirty days of the receipt of the request therefor,

submitted in accordance with the superintendent's instructions. The

external appeal agent shall have the opportunity to request additional

information from the insured, the insured's health care provider and the

insured's health care plan within such thirty-day period, in which case

the agent shall have up to five additional business days if necessary to

make such determination. The external appeal agent shall notify the

insured, the insured's health care provider where appropriate, and the

health care plan, in writing, of the appeal determination within two

business days of the rendering of such determination.

(3) Notwithstanding the provisions of paragraphs one and two of this

subsection, if the insured's attending physician states that a delay in

providing the health care service would pose an imminent or serious

threat to the health of the insured, or if the insured is entitled to an

expedited external appeal pursuant to section 2719 of the Public Health

Service Act, 42 U.S.C. § 300gg-19, the external appeal shall be

completed within no more than seventy-two hours of the request therefor

and the external appeal agent shall make every reasonable attempt to

immediately notify the insured, the insured's health care provider where

appropriate, and the health plan of its determination by telephone or

facsimile, followed immediately by written notification of such

determination.

(4) (A) For external appeals requested pursuant to paragraph one of

subsection (b) of section four thousand nine hundred ten of this title,

the external appeal agent shall review the utilization review agent's

final adverse determination and, in accordance with the provisions of

this title, shall make a determination as to whether the health care

plan acted reasonably and with sound medical judgment and in the best

interest of the patient. When the external appeal agent makes its

determination, it shall consider the clinical standards of the plan, the

information provided concerning the patient, the attending physician's

recommendation, applicable and generally accepted practice guidelines

developed by the federal government, national or professional medical

societies, boards and associations. Provided that such determination

shall:

(i) be conducted only by one or a greater odd number of clinical peer

reviewers,

(ii) be accompanied by a notice of appeal determination which shall

include the reasons for the determination; provided, however, that where

the final adverse determination is upheld on appeal, the notice shall

include the clinical rationale, if any, for such determination,

(iii) be subject to the terms and conditions generally applicable to

benefits under the evidence of coverage under the health care plan,

(iv) be binding on the plan and the insured, and

(v) be admissible in any court proceeding.

(B) For external appeals requested pursuant to paragraph two of

subsection (b) of section four thousand nine hundred ten of this title,

the external appeal agent shall review the proposed health service or

procedure for which coverage has been denied and, in accordance with the

provisions of this title and the external agent's investigational

treatment review plan, make a determination as to whether the patient

costs of such health service or procedure shall be covered by the health

care plan; provided that such determination shall:

(i) be conducted by a panel of three or a greater odd number of

clinical peer reviewers,

(ii) be accompanied by a written statement:

(a) that the patient costs of the proposed health service or procedure

shall be covered by the health care plan either: when a majority of the

panel of reviewers determines, based upon review of the applicable

medical and scientific evidence and, in connection with rare diseases,

the physician's certification required by subsection (g-7) of section

four thousand nine hundred of this article and such other evidence as

the insured, the insured's designee or the insured's attending physician

may present (or upon confirmation that the recommended treatment is a

clinical trial), the insured's medical record, and any other pertinent

information, that the proposed health service or treatment (including a

pharmaceutical product within the meaning of subparagraph (B) of

paragraph two of subsection (e) of section four thousand nine hundred of

this article) is likely to be more beneficial than any standard

treatment or treatments for the insured's condition or disease or, for

rare diseases, that the requested health service or procedure is likely

to benefit the insured in the treatment of the insured's rare disease

and that such benefit to the insured outweighs the risks of such health

service or procedure (or, in the case of a clinical trial, is likely to

benefit the insured in the treatment of the insured's condition or

disease); or when a reviewing panel is evenly divided as to a

determination concerning coverage of the health service or procedure, or

(b) upholding the health plan's denial of coverage;

(iii) be subject to the terms and conditions generally applicable to

benefits under the evidence of coverage under the health care plan,

(iv) be binding on the plan and the insured, and

(v) be admissable in any court proceeding.

As used in this subparagraph (B) with respect to a clinical trial,

patient costs shall include all costs of health services required to

provide treatment to the insured according to the design of the trial.

Such costs shall not include the costs of any investigational drugs or

devices themselves, the cost of any nonhealth services that might be

required for the insured to receive the treatment, the costs of managing

the research, or costs which would not be covered under the policy for

noninvestigational treatments.

(C) For external appeals requested pursuant to paragraph three of

subsection b of section four thousand nine hundred ten of this title

relating to an out-of-network denial, the external appeal agent shall

review the utilization review agent's final adverse determination and,

in accordance with the provisions of this title, shall make a

determination as to whether the out-of-network health service shall be

covered by the health plan.

(i) The external appeal agent shall assign one clinical peer reviewer

to make a determination as to whether the out-of-network health service

is materially different from the alternate recommended in-network health

service.

(ii) If a determination is made that the out-of-network health service

is not materially different from the alternate recommended in-network

health service, the out-of-network health service shall not be covered

by the health plan.

(iii) If a determination is made that the out-of-network health

service is materially different from the alternate recommended

in-network health service, the external appeal agent shall assign a

panel with an additional two or a greater odd number of clinical peer

reviewers, which shall make a determination as to whether the

out-of-network health service shall be covered by the health plan;

provided that such determination shall:

(I) be accompanied by a written statement:

(1) that the out-of-network health service shall be covered by the

health care plan either: when a majority of the panel of reviewers

determines, upon review of the treatment requested by the insured, the

alternate recommended health service proposed by the plan, the clinical

standards of the plan, the information provided concerning the insured,

the attending physician's recommendation, the applicable medical and

scientific evidence, the insured's medical record, and any other

pertinent information that the out-of-network health service is likely

to be more clinically beneficial than the alternate recommended

in-network health service and the adverse risk of the requested health

service would likely not be substantially increased over the in-network

health service; or

(2) uphold the health plan's denial of coverage;

(II) be subject to the terms and conditions generally applicable to

benefits under the evidence of coverage under the health care plan;

(III) be binding on the plan and the insured; and

(IV) be admissible in any court proceeding.

(D) For external appeals requested pursuant to paragraph four of

subsection (b) of section four thousand nine hundred ten of this title

relating to an out-of-network referral denial, the external appeal agent

shall review the utilization review agent's final adverse determination

and, in accordance with the provisions of this title, shall make a

determination as to whether the out-of-network referral shall be covered

by the health plan; provided that such determination shall:

(i) be conducted only by one or a greater odd number of clinical peer

reviewers;

(ii) be accompanied by a written statement:

(I) that the out-of-network referral shall be covered by the health

care plan either when the reviewer or a majority of the panel of

reviewers determines, upon review of the training and experience of the

in-network health care provider or providers proposed by the plan, the

training and experience of the requested out-of-network provider, the

clinical standards of the plan, the information provided concerning the

insured, the attending physician's recommendation, the insured's medical

record, and any other pertinent information, that the health plan does

not have a provider with the appropriate training and experience to meet

the particular health care needs of an insured who is able to provide

the requested health service, and that the out-of-network provider has

the appropriate training and experience to meet the particular health

care needs of an insured, is able to provide the requested health

service, and is likely to produce a more clinically beneficial outcome;

or

(II) upholding the health plan's denial of coverage;

(iii) be subject to the terms and conditions generally applicable to

benefits under the evidence of coverage under the health care plan;

(iv) be binding on the plan and the insured; and

(v) be admissible in any court proceeding.

(c) No external appeal agent or clinical peer reviewer conducting an

external appeal shall be liable in damages to any person for any

opinions rendered by such external appeal agent or clinical peer

reviewer upon completion of an external appeal conducted pursuant to

this section, unless such opinion was rendered in bad faith or involved

gross negligence.

(d) (1) Except as provided in paragraphs two and three of this

subsection, payment for an external appeal shall be the responsibility

of the health care plan. The health care plan shall make payment to the

external appeal agent within forty-five days, from the date the appeal

determination is received by the health care plan, and the health care

plan shall be obligated to pay such amount together with interest

thereon calculated at a rate which is the greater of the rate set by the

commissioner of taxation and finance for corporate taxes pursuant to

paragraph one of subsection (e) of section one thousand ninety-six of

the tax law or twelve percent per annum, to be computed from the date

the bill was required to be paid, in the event that payment is not made

within such forty-five days.

(2) If an insured's health care provider requests an external appeal

of a concurrent adverse determination and the external appeal agent

upholds the health care plan's determination in whole, payment for the

external appeal shall be made by the health care provider in the manner

and subject to the timeframes and requirements set forth in paragraph

one of this subsection.

(3) If an insured's health care provider requests an external appeal

of a concurrent adverse determination and the external appeal agent

upholds the health care plan's determination in part, payment for the

external appeal shall be evenly divided between the health care plan and

the insured's health care provider who requested the external appeal and

shall be made by the health care plan and the insured's health care

provider in the manner and subject to the timeframes and requirements

set forth in paragraph one of this subsection; provided, however, that

the superintendent may, upon a determination that health care plans or

health care providers are experiencing a substantial hardship as a

result of payment for the external appeal when the external appeal agent

upholds the health care plan's determination in part, in consultation

with the commissioner of health, promulgate regulations to limit such

hardship.

(4) If an insured's health care provider was acting as the insured's

designee, payment for the external appeal shall be made by the health

care plan. The external appeal and any designation shall be submitted on

a standard form developed by the superintendent in consultation with the

commissioner of health pursuant to subsection (e) of this section. The

superintendent shall have the authority upon receipt of an external

appeal to confirm the designation or request other information as

necessary, in which case the superintendent shall make at least two

written requests to the insured to confirm the designation. The insured

shall have two weeks to respond to each such request. If the insured

fails to respond to the superintendent within the specified timeframe,

the superintendent shall make two written requests to the health care

provider to file an external appeal on his or her own behalf. The health

care provider shall have two weeks to respond to each such request. If

the health care provider does not respond to the superintendent's

requests within the specified timeframe, the superintendent shall reject

the appeal. If the health care provider responds to the superintendent's

requests, payment for the external appeal shall be made in accordance

with paragraphs two and three of this subsection.

(e) The superintendent, in consultation with the commissioner of

health, shall promulgate by regulation a standard description of the

external appeal process established under this section, which shall

provide a standard form and instructions for the initiation of an

external appeal by an insured.