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How it Works

Utilization review agents (URAs) decide the medical necessity or appropriateness of services for health plans. Some health plans do their own utilization review and others contract out these services.

Whether a consumer asks for approval for a certain treatment up front, or gets the treatment then files a claim later, the utilization review agent must determine that the requested treatment is "medically necessary." If the URA denies access to the care (finding that it is not medically necessary), then the consumer must first file an appeal to the health plan, and someone else in the health plan looks at the case. If again denied, the health plan must send a notice to the consumer with instructions about the independent review process.

When consumers tell the health plan they want an independent review, the URA must forward the request with the necessary background information to TDI. TDI assigns the cases to a certified independent review organization (IRO) after verifying that the IRO is financially independent from the health plan and URA making the original decisions. The IROs don't actually have a finite "panel" to review the cases, but rather they contract with various health care providers and physician specialists so the cases can be reviewed by persons with appropriate expertise. One health care provider typically reviews each case.
The law requires the health plan to pay for the review ($650 for a physician review and $460 for a review by other health care providers such as dentists or podiatrists). The IRO bills the plan.

The health plan must comply with the IRO decision. An IRO is not liable for damages arising from a review decision, unless it stems from an act or omission made in bad faith or gross negligence.

(Texas Insurance Code, 21.58C, Sec. 2 (g))