1. (1)(a) "Adverse benefit determination" means:

   1. (i) based on the carrier's requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit, the:

      1. (A) denial of a benefit;
      2. (B) reduction of a benefit;
      3. (C) termination of a benefit; or
      4. (D) failure to provide or make payment, in whole or part, for a benefit; or
      5. (ii) rescission of coverage.

   2. (b) "Adverse benefit determination" includes:

      1. (i) denial, reduction, termination, or failure to provide or make payment that is based on a determination of an insured's eligibility to participate in a health benefit plan;
      2. (ii) failure to provide or make payment, in whole or part, for a benefit resulting from the application of a utilization review; and

      3. (iii) failure to cover an item or service for which benefits are otherwise provided because it is determined to be:

         1. (A) experimental;
         2. (B) investigational; or
         3. (C) not medically necessary or appropriate.

2. (2) "Authorized representative" means:

   1. (a) a person to whom an insured has given express written consent for representation in an external review;
   2. (b) a person authorized by law to provide substituted consent for an insured; or

   3. (c) when the insured is unable to provide consent:

      1. (i) a family member of the insured; or
      2. (ii) the insured's treating health care provider.

3. (3) "Carrier" means a person that provides health insurance in this state including:

   1. (a) an insurance company;
   2. (b) a prepaid hospital or medical care plan;
   3. (c) a health maintenance organization;
   4. (d) a multiple employer welfare arrangement; and
   5. (e) any other person providing a health insurance plan under Title 31A, Insurance Code.
4. (4) "Claimant" means the insured or the insured's authorized representative.

5. (5) "Clinical reviewer" means a physician or other appropriate health care provider who:

   1. (a) is an expert in the treatment of the medical condition that is the subject of the review;
   2. (b) is knowledgeable about the recommended health care service or treatment through recent or current actual clinical experience treating patients with the same or similar medical condition;
   3. (c) holds an appropriate license or certification; and
   4. (d) has no history of disciplinary actions or sanctions.
6. (6) "Final adverse benefit determination" means an adverse benefit determination that has been upheld by a carrier at the completion of the carrier's internal review process.

7. (7) "Independent review" means a process that:

   1. (a) is a voluntary option for the resolution of a final adverse benefit determination;
   2. (b) is conducted at the discretion of the claimant;
   3. (c) is conducted by an independent review organization designated by the commissioner;
   4. (d) renders an independent and impartial decision on a final adverse benefit determination; and
   5. (e) may not require the claimant to pay a fee for requesting the independent review.
8. (8) "Non-formulary drug" means a prescription drug that is not included on a carrier's covered formulary drug list.
9. (9) "Non-formulary drug exception process" means a process for a claimant to request a review of a decision for a drug not covered by the health benefit plan.

10. (10)(a) "Rescission" means a cancellation or discontinuance of coverage under a health benefit plan that has a retroactive effect.

    1. (b) "Rescission" does not include a cancellation or discontinuance of coverage under a health benefit plan if the cancellation or discontinuance of coverage:

       1. (i) has only a prospective effect; or
       2. (ii) is effective retroactively to the extent it is attributable to a failure to timely pay required premiums or contributions toward the cost of coverage.

Terms used in this rule are defined in Section 31A-1-301 and 45 CFR 147.140. Additional terms are defined as follows:

KEY: health benefit plan insurance

Date of Last Change: August 27, 2025

Notice of Continuation: May 19, 2026

Authorizing, and Implemented or Interpreted Law: 31A-22-629; 31A-2-201; 31A-2-212