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Independent Review Organizations Take Pressure Off Healthcare Payers as Recession Deepens

IROs Help Ease Staff Burden, Maintain Compliance and Make Patient Safety a Priority

PORTLAND, Ore., Feb. 26 /PRNewswire/ -- The deepening U.S. economic recession has healthcare payers caught between member demands for better coverage and the need to reduce costs, while they also wrestle with business restructuring, declining budgets and staff cuts. Amid this, the expense and complexity of new technologies, treatments and drugs continues to rise.

"During this recession, payer organizations are servicing claims with fewer personnel, while new treatments and drugs continue to add complexity to them," said Andrew Rowe, CEO at AllMed Healthcare Management (, a leading independent review organization (IRO). "Even with fewer in-house staff, payers can still offer high quality care, by outsourcing their more complex and critical claims and appeals decisions to an IRO," he explained.

Payer appeals departments often use IROs for evaluating the medical necessity of denied claims. These reviews meet ERISA and Department of Labor federal regulations, as well as most state requirements calling for an independent evaluation by a specialist who was not involved in the original coverage determination. "Although compliance is important to payers, forward-thinking health plans also use IROs to improve transparency and objectivity, which boosts their members' and groups' confidence," Rowe said.

Because they staff medical peer review specialists who objectively review healthcare claims for medical necessity, IROs help payers make determinations on their most complex and critical claims. "This ensures patients get the coverage they deserve, while eliminating unneeded treatments and costs," Rowe said. Organ transplants, oncology treatments, growth hormone therapy and bariatric surgery are a few examples of the types of cases IROs evaluate every day for leading payers.

Over-utilization and increasing pressure for reimbursements from providers compel health insurers to look closely at provider billing practices. "An IRO can help payers arbitrate provider appeals uniformly by determining the medical necessity of complex treatments and their associated coding," Rowe said. This especially helps health plans that are party to the Thomas Love Settlement, as well as others interested in identifying and questioning costly or suspicious reimbursements. Many times, the only way to deliver a fair, evidence-based determination is through a medical specialty review.

With today's constantly evolving medical policy and health plan language, payers need access to the specialized medical expertise that IROs offer to review and update their existing health plan language. This protects the health plan from over-utilization while ensuring that members receive the treatment they deserve.

Many health plans use peer review panels for conducting hearings and reviewing member and provider grievances and appeals. IROs with medical directors and peer specialty reviewers regularly engage in these review proceedings to provide objectivity and fairness for all parties.

IROs offer an effective outsourcing solution that helps payers manage costs, without compromising the need to make evidence-based coverage determinations. This is especially important as healthcare insurers and medical management organizations trim staff and expenses. "More than ever, payers need to take a hard look at what their core strengths are and focus on those," Rowe said. "Payers should consider outsourcing their complex member and provider appeals to gain evidence-based determinations conducted by like specialists that raise their members' confidence and contain their costs."

Find more information about the medical necessity review services offered by IROs on AllMed's web site at

SOURCE AllMed Healthcare Management
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