CHICAGO – August 26, 2011. Governor Pat Quinn today signed legislation to strengthen the state’s Health Carrier External Review Act, which allows a consumer to appeal certain health insurance claim denials to independent review organizations approved by the Illinois Department of Insurance (DOI). House Bill 224 ensures that Illinois law conforms to numerous minimum consumer protections required by federal law.
“Too many Illinois patients and their families have paid expensive premiums for health insurance only to see coverage dropped or denied, often when it is needed most,” Governor Quinn said. “This new law will help protect individuals – especially those with pre-existing conditions – by increasing fairness in the process.”
The Health Carrier External Review Act, which was passed by the Illinois General Assembly in 2009, requires health insurance companies to establish and maintain external review procedures that allow a consumer to appeal the denial of certain health insurance claims to independent review organizations. Independent review organizations are composed of medical experts and are approved by the DOI.
The federal Affordable Care Act mandates that all state external review laws must meet certain minimum consumer protections, including the timeframe in which a decision must be reached or who can assign an independent review organization to review an appeal. State external review laws that fail to meet these minimum consumer protections will be pre-empted by a federal external review process.
House Bill 224 amends Illinois’ external review law to meet the required consumer protections. The law also extends Illinois’ external review rights to consumers whose coverage has been rescinded or who have been denied a benefit due to a pre-existing health condition.
Rescission refers to the practice of canceling coverage for individuals. Rescission sometimes occurs after a consumer files a claim, putting their coverage into effect; the practice can leave a patient suddenly uncovered by insurance after an expensive procedure has already taken place. Illinois has far more rescissions than any state in the United States and, per capita, is second only to New Mexico.
Sponsored by Rep. Mary E. Flowers (D-Chicago) and Sen. Heather Steans (D-Chicago), House Bill 224 was an initiative of the Illinois Department of Insurance and is based on model law adopted by the National Association of Insurance Commissioners (NAIC) through a public process with stakeholders including consumers, health care providers, health insurers and insurance agents.
“This is a significant step in providing stronger recourse for individuals facing rescissions or denials due to pre-existing conditions,” Rep. Flowers said. “This new law protects consumers and brings Illinois law in line with federal requirements.”
House Bill 224 goes into effect immediately.