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New York, April 13, 1999


In the first step toward implementing the state’s landmark External Appeals Law, Superintendent of Insurance Neil D. Levin and Acting Department of Health Commissioner Dennis Whalen today announced that applications for external appeal agents are now available. The certified appeal agents will conduct the external reviews for consumers denied coverage for medical treatments by health care insurers.

Starting July 1, 1999, consumers will have the right to an independent review of a health plan’s decision to deny coverage on the grounds that the service is not medically necessary or is experimental, ensuring that treatment decisions are made for medical, not financial, reasons. To be eligible for an external appeal, the consumer must have first received a final adverse determination from the plan’s internal appeal process, or both the plan and the consumer have agreed to waive their rights to the internal review and move directly to an independent external review. The new law further protects consumers by imposing a penalty for companies that fail to observe the existing time limits for evaluating internal appeals. This means that if a company fails to evaluate an appeal within the required time frame, then the appeal is automatically decided in the consumer’s favor.

"We are shifting the power for medical treatment decisions back to where it belongs – to consumers and away from health care administrators," said Levin. "Our priority as insurance regulators is to protect consumers in New York State and our new external appeal process means that treatment decisions for patients will be made because they are smart medical choices and not simply sound financial decisions."

"Having access to an external review process will give patients confidence that decisions about their medical care are being made by doctors based on clinical judgments," said Dennis Whalen, Acting Commissioner of the State Health Department.

Under the new law, external appeal agents will be certified by the state to perform independent reviews and will be jointly supervised by the Insurance and Health Departments. Once an external appeal agent has been assigned by the state to review an appeal, the agent will assign the appeal to one or more clinical peer reviewers – ensuring that the clinical peer reviewers do not have any obvious conflicts of interest.

The application for external appeal certification is available on the Insurance Department’s website at and the Health Department’s website at, or may be obtained by calling the Insurance Department at (518) 474-4098 or the Health Department at (518) 486-6074. Applications should be submitted to the Health Department and both departments will coordinate the review of external appeal agent applications and will issue joint certification.

Highlights of the new law include:

  • Establishing a prompt, consistent and fair external review process for all covered health care services denied on the grounds that the service is not medically necessary;
  • Establishing an external review process for patients with life-threatening or disabling conditions seeking clinical trials, off-label use of drugs and experimental or investigational procedures or treatments when such services are denied upon the basis that they are experimental;
  • Establishing guidelines and time limits for companies to evaluate internal appeals;
  • Permitting insurers to charge patients up to $50 for an external appeal but requires the appeal application fee to be returned when a denial is reversed by an external review agent. Medicaid, Child Health Plus and the indigent are exempt from the fee;
  • Requiring insurers to give written notice to patients of their right to an external appeal;
  • Requiring the external agent to make a determination on an appeal within 30-days or three days for emergency cases;
  • Directing that requests for external reviews can be made after the health care plan has rendered a final adverse coverage determination. The final adverse determination results when the plan has either disapproved the request for coverage made through the expedited appeal or through the standard internal appeal of the initial coverage denial;
  • Preventing potential conflicts of interest for external reviewers and provides for random selection of the agents for the cases they review; and
  • Requiring the Health Commissioner and Insurance Superintendent to annually report on the number and outcomes of external appeals.

Department of Financial Services


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