July 26, 2007

Insurance Federation of Pennsylvania, Inc. v. Pennsylvania Insurance Department

The judge in denied an appeal made by the Insurance Federation of Pennsylvania Inc.(IFP),  regarding a rule made by the Pennsylvania Insurance Department (PID) that directs insurance plans to offer alcohol and substance abuse treatment upon referral. The PID required that the plans must offer at least 30 days of annual inpatient care and outpatient counseling sessions for drug and alcohol treatment, with lifetime caps on each service. The IFP said that the services should be subject to utilization review and other tools that manage cost while ensuring that appropriate care is provided.

The IFP has filed a follow-up appeal to the Pennsylvania Supreme Court. The issue is related to two laws, Law 106 and Act 68, which permit managed care organizations to conduct pre-certification utilization review. The IFP said Act 106 does not limit the ability of managed care organizations to determine the medical necessity and appropriateness of drug and alcohol abuse dependency treatment. The plaintiffs said that Act 106 benefits are not exempt from utilization review by managed care providers operating under the authority of Act 68. They believe that the mandated Act 106 benefits are limited and must be managed to ensure against premature exhaustion.