The Departments of Health and Human Services, Labor and Treasury July 23 issued interim final rules that implement requirements relating to internal claims and appeals and external review processes for group health plans and health insurance coverage in the group and individual markets under the Patient Protection and Affordable Care Act.
The rules go into effect on Sept. 21, 2010 and generally apply to group health plans, group health insurance issuers, and individual health insurance issuers for plan and policy years beginning on or after Sept. 23, 2010. Grandfathered health plans are not subject to these rules.
The interim final regulations require group health plans and health insurance issuers to implement an effective internal claims and appeals process. These rules also apply to group health plans that are not currently covered by the Employee Retirement Income Security Act (ERISA).
Group health plans and health insurance issuers offering group coverage must comply with requirements under the Department of Labor claims procedure and six new requirements set forth by the regulations.
The six new requirements change the claims procedure by:
- Broadening the definition of adverse benefit determination to include a rescission of coverage.
- Requiring a plan or issuer to notify a claimant regarding an urgent care claim as soon as possible, but not later than 24 hours after receipt of the claim. Currently, a determination is required within 72 hours.
- Providing additional criteria to ensure that a claimant receives a full and fair review.
- Providing new criteria with respect to avoiding conflicts of interest.
- Providing new standards regarding notice to enrollees, which includes providing notice in a culturally and linguistically appropriate manner. Links to the model notices are available at the end of the article.
- Allowing the claimant to initiate an external review and pursue any available remedies under applicable law if a plan or issuer fails to strictly adhere to all the requirements of the internal claims and appeals process, at which point the claimant is deemed to have exhausted the internal claims and appeal process.
These regulations also require a plan and issuer to provide continued coverage pending the outcome of an internal appeal.
In addition to complying with all of the requirements for the internal claims and appeals process that apply to group health coverage, issuers offering individual health coverage must also comply with three more requirements set forth by the rules.
The three additional requirements make changes that:
- Expand the scope of the group health coverage internal claims and appeals process to cover initial eligibility determinations for individual health insurance coverage.
- Require only one level of internal appeals, thus allowing the claimant to initiate external review or judicial review immediately following an adverse benefit determination.
- Require issuers to maintain records of claims and notices for at least six years.
The regulations also provide that plans and issuers must comply with either a state external review process or the federal external review process. On Aug. 26, further guidance was issued relating to interim procedures for the federal external review process. In addition, on Sept. 20 a technical release was issued that sets forth an enforcement grace period until July 1, 2011 for compliance with certain new provisions with respect to internal claims and appeals.
The interim final rule is open for public comment until September 21, 2010.
To view the Interim Final Rules, click here.
To view the Fact Sheet, click here.
To view the Aug. 26 further guidance, click here.
To view the Technical Release - Guidance on the Interim Federal External Review Process, click here.
To view the Technical Release - Sets forth an Enforcement Grace Period, click here.
To view the Model Notice of Adverse Benefit Determination, click here.
To view the Model Notice of Final Internal Adverse Benefit Determination, click here.
To view the Model Notice of Final External Review Decision, click here.
To view additional resources, click here:
This article only contains a summary of federal regulatory action and should not be considered a definitive source for the purpose of compliance. In order to ensure a complete understanding of the requirements outlined on this page, ABC recommends members review official agency guidance and consult with legal counsel whenever necessary.