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If an insurer closes a door, the state may open a window

There are few things more frustrating about health care insurance than having a prescription denied. In some cases, it's a hassle. In others, though, it could be life-altering. That is one reason the appeal process needs to be more than just thorough and fair. Policyholders need an answer fast.

Health insurance companies maintain formularies, lists of prescription medications that that the plan covers. Generally, these formulary drugs have been approved by the Food & Drug Administration as effective treatments. They have also been approved by the insurance company as offering the best value. When a generic version of a drug comes out, the "name brand" will often fall off the list, not because it is any less effective, but because it costs more.

Policyholders, of course, may have no idea that the medication isn't covered until their prescription is denied. Oftentimes, there is a generic available that the prescribing physician did not know about. The doctor can prescribe the generic, or the insurance company, with a little nudging, can approve the name brand -- if the cost differential is not alarming.

A policyholder may also come up against a drug that has been approved by the FDA but is still making its way through the insurance company's vetting process. Again, a little nudging may be able to resolve the issue. If not, there is the formal appeal process.

The appeal process is likely the first step when the drug in question is experimental and has not received FDA approval -- or, unfortunately, when a name brand is simply too expensive for the insurance company to cover and no generic is available.

Appeals are usually handled by insurance company personnel. Not quite the same people that denied the claim in the first place but close enough. Blue Cross Blue Shield of Minnesota, for example, has also established a corporate appeals committee to take a second look at a claim dispute. After that, the state gets involved.

Lawmakers long ago realized that there should be an added layer of protection for consumers, so the Minnesota Department of Commerce, the state agency that regulates insurance companies, established the external review process. An external review company will evaluate the claim and render a decision. All of this -- the entire appeal process to this point -- can take months.

And, it turns out, the insurance company may still deny the claim, as one Minnesota policyholder discovered. We'll get into the details in our next post.


Star Tribune, "Blue Cross penalized for denying Minnesota patient's claim," Christopher Snowbeck, Jan. 7, 2016

Blue Cross and Blue Shield of Minnesota, "Complaints and Appeals," accessed at www.BlueCrossMN.com on Jan. 13, 2016

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