On September 30, the Maryland Insurance Administration (MIA) issued its 2014 report on the Appeals and Grievance Law enacted in 1998.  Under the law, nonprofit health service plans, insurers, health maintenance organizations and dental plans must report their adverse decisions and grievance decisions quarterly to the MIA. These quarterly data are coupled with MIA complaint data in the report. The Appeals and Grievance process begins when a carrier makes an “adverse decision,” a determination that a proposed or delivered health care service is not medically necessary. The member (patient), the member’s representative, or the treating provider on behalf of the member has the right to protest this decision through the carrier’s internal review process (a “grievance”).  If the carrier again concludes the service is not medically necessary, the member can ask the MIA to review the carrier’s grievance decision by filing a “complaint.”

Carriers rendered 31,391 adverse decisions in 2014 and 43,537 in 2011, a decrease of 28%. Adverse decisions for physician services decreased by 68% (15,313 in 2011 to 4,841 in 2014).  Concerns have been expressed about denials of emergency room services and mental health services; however, the MIA data indicate that there are relatively few adverse decisions for these services (0.5% and 2.4% in 2014, respectively).  The number of adverse decisions for these services decreased from 2011 to 2014 (ER decreased 56% – 354 in 2011 and 155 in 2014; MH decreased by 7% – 814 in 2011 and 758 in 2014).  It is not clear whether psychiatrists’ services are grouped as physician or as mental health services.  Grievances increased as a percentage of adverse decisions from 2011 to 2014 (11% to 16%), and carriers were less likely to reverse themselves during the internal grievance process. Carriers upheld adverse decisions 53% of the time in 2014 compared with 42% in 2011.

If the outcome of a grievance filed with the carrier is unsatisfactory, a complaint can be filed with the MIA.  The number of such medical necessity complaints increased 9% between 2011 and 2014 from 825 to 898. The percentage of reversals of grievance decisions by the MIA, or by the carrier during the investigation process, decreased to 58% in 2014 from 67% percent in 2011.  In 2014, the MIA issued 3 orders based on medical necessity complaints, imposed $2,500 in penalties, and recovered $410,589 for complainants under the Appeals and Grievance law. In comparison, in 2011 it issued 8 orders, imposed $14,500 in penalties and recovered $509,089 for complainants.  These recoveries demonstrate that this law remains an important protection for Maryland consumers, in spite of the smaller percentage of Marylanders to whom it applies.  When the Appeals and Grievance Law was enacted, the percentage of the population under the age of 65 with insured health benefits (43%) slightly exceeded the percentage of the population under the age of 65 with other employment based health benefits (38%).  By 2014, the percentage of the population under the age of 65 with insured health benefits had declined to 21%.

To view the complete report, including adverse decision, grievance and complaint data by carrier, click here.