Agencies Release Interim Final Regulations and Additional Guidance on Health Plan Claims and Appeals Requirements under Health Reform


The Departments of Treasury, Labor (the "DOL"), and Health and Human Services ("HHS") published amendments to the final regulations that were issued in July 2010 implementing the internal claims and appeals and external review processes required under health reform for non-grandfathered group health plans. In connection with amended regulations, the DOL issued Technical Release No. 2011-02, providing additional guidance and transition relief with respect to various requirements. This new guidance makes several significant changes to the prior interim final regulations issued last July.

With respect to the internal claims and appeal process: 

  • Group health plans no longer have to respond to an urgent care claim within 24 hours. Instead, plans must respond as soon as possible consistent with the medical exigencies involved but in no event later than 72 hours, provided that the plan defers to the attending provider with respect to the decision as to whether a claim constitutes “urgent care.” 
  • The new regulations no longer require the adverse benefit determination to include the diagnosis and treatment code, but instead require the plan to state that it will provide the diagnosis and treatment code and its meaning upon request. 
  • The new regulations still permit claimants to immediately seek review if a plan failed to strictly adhere to all of the requirements for internal claims and appeals process. However, the new regulations provide an exception to the strict compliance standard for errors that are minor and meet certain other specified conditions. For this exception to apply, the error must be non-prejudicial, attributable to good cause or matters beyond the plan’s control, in the context of an ongoing good-faith exchange of information, and not reflective of a pattern or practice of non-compliance. 
  • The new regulations also amended the requirements relating to provision of notices in a “culturally and linguistically appropriate manner.” If a plan is sending a notice to an address in a county in which 10 percent or more of the population are only literate in the same non-English language (available on the DOL website), the notice must include a prominent statement in the applicable non-English language describing how to access the language services provided by the plan. The plan must also provide a customer assistance process (such as a telephone hotline) with oral language services in the non-English language and provide written notices in the non-English language upon request.

With respect to the external review process: 

  • The new regulations have extended the transition period through December 31, 2011 for States to implement external review processes that meet the minimum consumer protections of the NAIC Uniform Model Act (a NAIC-parallel process). Until then, any State external review process satisfies the requirements of health reform. In addition, the new regulations provide that issuers may continue to participate in a State external review process under standards similar to the process under the NAIC Uniform Model Act (a NAIC-similar process) through December 31, 2013. The DOL will determine whether a State external review process is a NAIC-parallel process or a NAIC-similar process by October 1, 2011. 
  • The new regulations limit the scope of claims eligible for external review to claims that involve medical judgment or a rescission of coverage. 
  • The new regulations clarify that a decision by an independent review organization (IRO) is binding and the plan must provide benefits pursuant to the decision without delay, regardless of whether the plan intends to seek judicial review of the external review decision.
  • The Technical Release modifies the 16 consumer protections that apply to a NAIC-parallel process. 
  • The Technical Release revises the enforcement safe harbor that self-insured plans may comply with in order to satisfy the federal external review process. To be eligible for a safe harbor from enforcement, self-insured plans must contract with at least two IROs by January 1, 2012 and with at least three IROs by July 1, 2012.

In connection with this guidance, the DOL has also provided revised model notices for adverse benefit determinations, final internal adverse benefit determinations, and final external adverse benefit determinations.

A copy of Technical Release No. 2011-02 (and links to the updated model notices) is available here.  A copy of the amended regulations is available here. You may also view this article in the PDF linked below.

PDF - Health_Reform.pdf

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