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IROs Help Cut Health Payers' Costs and Improve Image
Date:2/26/2009

LANSDALE, Pa., Feb. 26 /PRNewswire/ -- In this recession, healthcare payers are challenged to do more with less, while delivering the same value to their members. For help reviewing complex or controversial appeal denials, they can find an independent review organization (IRO) through NAIRO (www.nairo.org), a national trade organization of IROs.

NAIRO members embrace an independent, evidence-based approach to medical review for resolving coverage disputes between enrollees and their health plans. The organization works to promote the value and integrity of the independent medical review process.

"Many states and the federal government require a timely independent review of denied appeals," said Joyce Muller, president of NAIRO (www.nairo.org). "During a recession payers are forced to cut costs, and outsourcing their medical claims and appeals decisions to IROs is even more compelling."

Specialty-matched reviews at lower costs

The number of medical specialties is growing and it would cost a payer millions of dollars to build and maintain an in-house panel of medical specialists that could provide the same clinical expertise found in an IRO. IROs recruit, train, credential and manage hundreds of specialists and subspecialists who are up-to-date on current treatments, procedures and technologies in their fields. Because they provide the clinical depth a payer cannot afford to maintain on staff, IROs can meet most regulatory, payer and member needs by providing unbiased, evidence-based decisions at lower costs. This reduces payer administrative costs, the number of subscriber appeals and potential litigation.

According to Muller, accredited IROs, like the 16 members of NAIRO, provide matched specialist clinicians with credentials similar to the provider recommending a treatment under appeal.

Because payers cannot employ every "same-kind" specialist needed to review subscribers' appeals as federal and state laws require, they can incorrectly approve or deny the appeal based on inadequate knowledge. This undercuts their profitability and consistency of coverage determinations.

Improving coverage policy accuracy

Although ERISA, Department of Labor and most state regulations call for independent review of appeals, many payers are handling appeals internally to save costs. But, this practice may increase their costs and raise the potential for litigation based on member-perceived conflict of interest. Evidence-based evaluations by IROs support these laws and can reduce the chance of paying questionable or unnecessary claims, while providing a more defensible, evidence-based determination that decreases re-examining cases that have been appealed.

Using an IRO, payers can avoid setting unwanted precedents for controversial coverage of complex and critical claims. An IRO review using up-to-date coverage policies allows payers to quickly and accurately approve or deny medical treatments. By supporting their coverage policies with current medical evidence and standards of care, they reduce unnecessary appeals and lawsuits.

Increasing subscriber good will

During a recession, payers should carefully consider the hidden costs incurred by reviewing appeals internally with the cost of using an IRO. Independent medical reviews by IROs ensure subscribers receive their coverage benefits without administrative delay, while providing objective support for payers.

"Research by some of our members shows a return on investment of $15 to $20 for each dollar spent on appeals reviewed by the IRO," Muller said. "Unbiased medical reviews also improve good will between payers and subscribers, increase enrollments and reduce litigation opportunities."


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SOURCE NAIRO
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