The Department of Health and Human Services (HHS) recently published preliminary determinations regarding the external review procedures for resolving disputes between claimants and their plans and health insurers in each state. The determinations set out which states meet the standards for external review procedures required under the Affordable Care Act (ACA).

These determinations follow an interim final rule (IFR) initially issued by the HHS, DOL and IRS in July 2010 and amended in July 2011. The IFR sets out standards for internal claims and appeals, and external review procedures for group health plans and health insurers offering coverage in the group and individual markets. During a transition period that ends January 1, 2014, states may comply with the external review requirements by either:

If a state does not meet either of these standards, insurers offering non-grandfathered plans and policies in the state must choose an HHS-administered process or contract with accredited independent review organizations to review external appeals on their behalf.

The HHS has determined that the following 23 states meet the strict standards for compliance with the external review requirements: Arkansas, California, Colorado, Connecticut, Hawaii, Idaho, Illinois, Iowa, Kentucky, Maine, Maryland, Nevada, New Jersey, New York, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Utah, Vermont, Virginia and Washington.

The following ten states do not satisfy the strict standards and must operate an external review procedure under standards similar to those outlined in the IFR: Arizona, Delaware, Indiana, Kansas, Michigan, Minnesota, New Mexico, North Carolina, Tennessee and Wyoming.

The remaining 18 states and the following US territories do not meet the strict or similar requirements for external review procedures: Alabama, Alaska, District of Columbia, Florida, Georgia, Louisiana, Massachusetts, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Pennsylvania, Texas, West Virginia, Wisconsin, American Samoa, Guam, Northern Marianas Islands, Puerto Rico and Virgin Islands. Insurers in these states must choose an HHS-administered process or contract with accredited independent review organizations that can review external appeals on the states' behalf.

The HHS determinations are preliminary and states can request reconsideration of the determinations. However, the determinations will be final for states that do not request reconsideration. For states that do request reconsideration, final determinations will be made by October 1, 2011. A state that changes its external review procedure can request a new determination at any time.