Contributed by Jo-Anne Mineweaser
jmineweaser@tuckerlaw.com, 412.594.3920
The Patient Protection and Affordable Care Act and subsequent regulations set forth new rules for group health plans regarding the processing of claims and appeals. These rules are effective for plan years beginning on or after September 23, 2010 (January 1, 2011 for calendar year plans) and apply only to plans that are not grandfathered under the Act.
Under the new rules, both insured and self-funded plans will be required to comply with the internal claims and appeals procedures currently set out in Department of Labor regulations. In addition, the plans must meet the following new requirements for internal claims and appeals:
- Rescissions of coverage will now be considered “adverse benefit determinations” subject to the claims and appeals procedures, whether or not there is an adverse effect on any particular benefit at the time;
- Benefit determinations on “urgent care” must be given within 24 hours (as opposed to 72 hours under prior regulations);
- The plan must provide the claimant with any new or additional evidence or rationale that is considered, relied upon, or generated by the plan in connection with the claim;
- The plan must avoid conflicts of interest in adjudicating the claim;
- Claims notices must contain additional information (model notices have been issued); and
- Failure to strictly follow the claims rules will allow the claimant to seek external or judicial review of the claim.
New External Review Requirements
The biggest change for plans under these new rules is the requirement to have an external review process available. For fully-insured plans, the insurance company is on the hook. However, for self-insured plans (including Health Reimbursement Arrangements), the plan will need to be amended to comply with the new provisions.
Recently, the Department of Labor issued Technical Release 2010-01 which provides an interim safe harbor for non-grandfathered self-insured plans. The safe harbor applies for plan years beginning on or after September 23, 2010 and continues until future guidance is issued on the new Federal external review process. The safe harbor allows a plan to meet the external review requirements either by complying with the procedures outlined in the Technical Release (see below) or by voluntarily complying with the State external review process, if available.
In the Technical Release, there are procedures for standard external review and expedited external review. In both cases, the plan must assign an accredited independent review organization (IRO) to conduct the review. To ensure independence and eliminate bias, the plan is required to contract with at least three IROs for assignments under the plan and rotate claims assignments among them.
A standard external review is an external review that is not considered “expedited” (as described below). With this type of review, the claimant has up to four months after receipt of an adverse benefit determination to request an external review. Within five days of receipt of that request, the plan must complete a preliminary review to confirm that the claimant was covered by the plan, the claim does not relate to eligibility, the internal appeal process was exhausted, and all relevant information was provided. The plan must notify the claimant in writing within one business day after completing the preliminary review of the results of the review. The claimant will have 48 hours (or the remainder of the four-month filing period, if longer) to submit any missing information. If the claim is complete and meets the requirements, the plan must submit the claim to the IRO, and the IRO must provide written notice of the final external review decision within 45 days after the IRO receives the request for the external review. If the IRO reverses the denial of the claim, the plan must immediately provide coverage or payment for the claim.
An expedited external review is available to the claimant when an adverse benefit determination involves a medical condition for which the standard external review timeframe would seriously jeopardize the life or health of the claimant, or would jeopardize the claimant’s ability to regain maximum function. The plan must immediately do its preliminary review of the request and notify the claimant of its eligibility determination. If the request meets the requirements, the plan must submit the claim to the IRO, and the IRO must provide notice of the final review decision within 72 hours of receiving the request.
If you have any questions regarding this information, need plan amendments or IRO contracts to be drafted, or would like a copy of the model notices, please contact Jon Grossman at 412.594.5574 or Jo-Anne Mineweaser at 412.594.3920, or jgrossman@tuckerlaw.com or jmineweaser@tuckerlaw.com.
