|
March 25, 2011
Departments
Further Delay Effective Date for Compliance With Certain Internal
Claims and Appeals Procedures Under the Affordable Care Act
By: Ellen Hoeppner
On March 18, 2011, the Department of Labor
("DOL") issued Technical Release 2011-01, further delaying
the date for non-grandfathered group health plans and health
insurance issuers to comply with certain internal claims and appeals
procedures mandated by the Patient Protection and Affordable Care Act
("PPACA").
Previously, the Departments of Labor, Health and Human
Services, and Treasury (the "Departments"), issued interim
final regulations implementing PPACA mandated internal and external
claims and appeals procedures. These procedures apply to all
non-grandfathered group health plans, including non-ERISA plans
(e.g., non-federal governmental plans, church plans, etc.). In
addition to the procedures currently required under ERISA (29 C.F.R.
§ 2560.503-1), the interim final regulations require all
non-grandfathered group health plans and health insurance issuers to
implement the following internal claims and appeals procedures:
- Adopt a broader
definition of "an adverse benefit determination" to
include a rescission of coverage (whether or not the rescission
has an adverse effect on any particular benefit at the
time);
- Provide notice to a
claimant of a benefit determination (whether adverse or not)
with respect to a claim involving urgent care as soon as
possible, but not later than 24 hours after the receipt of the
claim;
- Provide a claimant
(free of charge) with new or additional evidence that was
considered, relied upon, or generated by the plan or issuer in
connection with the claim, as well as any new or additional
rationale for a denial at the internal appeals stage, and a
reasonable opportunity for the claimant to respond to such new
evidence or rationale;
- Adopt certain
conflict of interest criteria;
- Provide notices in a
culturally and linguistically appropriate manner, as set forth
in the interim final regulations;
- Include additional
content in notices to claimants, specifically:
- Any notice of
adverse benefit determination or final internal adverse benefit
determination must include information sufficient to identify
the claim involved, including the date of the service, the
health care provider, the claim amount (if applicable), the
diagnosis code and its corresponding meaning, and the treatment
code and its corresponding meaning;
- The plan or issuer
must ensure that the reason or reasons for an adverse benefit
determination or final internal adverse benefit determination
includes the denial code and its corresponding meaning, as well
as a description of the plan's or issuer's standard, if any,
that was used in denying the claim. In the case of a
final internal adverse benefit determination, this description
must also include a discussion of the decision;
- The plan or issuer
must provide a description of available internal appeals and
external review processes, including information regarding how
to initiate an appeal, and;
- The plan or issuer
must disclose the availability of, and contact information for,
an applicable office of health insurance consumer assistance or
ombudsman.
- If a group health
plan or health insurance issuer fails to strictly adhere to the
requirements of the interim final regulations, the claimant is
deemed to have exhausted the plan or issuer's internal claims
and appeals process, and the claimant may initiate any available
external review process or remedies available under ERISA or
under applicable State law.
In an earlier Technical Release (2010-02), the DOL set
forth an enforcement grace period for certain of the above provisions
until July 1, 2011. Technical Release 2011-1, provides further
guidance and extensions, as follows:
- The previous
enforcement grace period for the above-listed procedures numbers
2, 5, and 7 is extended until plan years beginning on or after
January 1, 2012;
- During the grace
period, the Departments and the Internal Revenue Service
("IRS") will not take any enforcement action against a
group health plan or health insurance issue with respect to
these procedures;
- States are encourages
to provide similar grace periods;
- There is no longer a
requirement that group health plans and health insurance issuers
be working in good faith to implement the procedures required by
the interim final regulations during the enforcement grace
period;
- With respect to the
above-listed procedure number 6, the grace period is extended
until plan years beginning on or after January 1, 2012 only for
the requirement to disclose diagnosis and treatment codes and
their corresponding meanings. For all of the other
disclosure requirements, the enforcement grace period is
extended from July 1, 2011 until the first day of the first plan
year beginning on or after July 1, 2011 (which is January 1,
2012 for calendar year plans);
- A current list of
relevant consumer assistance programs and ombudsmen is provided
in the Appendix to the Technical Release, which plans and
issuers may rely upon in developing their notices. The
Appendix will be updated periodically by the Departments.
Importantly, Technical Release 2011-1 notes that, while
the Departments will not treat a group health plan or health
insurance issuer as being out of compliance during the grace period,
the Technical Release does not address the rights of private parties
in private litigation. Therefore, to the extent possible,
non-grandfathered group health plans and health insurance issuers are
encouraged to comply with the procedures set forth in the interim
final regulations.
External Review
In addition to the above-described internal claims and
appeals procedure requirements, the interim final regulations also
require non-grandfathered group health plans and health insurance
issuers to implement certain external review procedures.
According to previously issued DOL Technical Release 2010-01, plans
and issuers currently subject to and utilizing a State mandated
external review procedure are deemed to comply with this requirement
for plan years beginning before July 1, 2011. For plans and
issuers not subject to State mandated procedures, such as
self-insured group health plans, a federal external review process
will apply. Until further guidance is issued by the Departments
with respect to the federal external review process, Technical
Release 2010-01 sets forth an enforcement grace period for plans and
issuers that comply with the external review standards set forth in
the Technical Release.
Technical Release 2011-01 provides that the Department
of Health and Human Services ("HHS") is conducting ongoing
reviews of State mandated external review procedures to determine
whether they satisfy PPACA's requirements. The Technical
Release advises that plans and issuers currently subject to a State
mandated procedure should continue to comply with that procedure,
unless HHS determines that the federal external review process
applies. To date, the federal external review process is in
effect for three States and four Territories: Alabama, Mississippi,
Nebraska, the U.S. Virgin Islands, the Northern Mariana Islands,
Guam, and American Samoa. Plans and issuers that are not
subject to a State mandated external review procedure continue to be
subject to the federal external review process standards set forth in
Technical Release 2010-01.
Technical Release 2011-01 also advises that the
Departments intend to provide future guidance on the subject of
external review procedures, and that group health plans and health
insurance issuers will be given a reasonable amount of time to comply
after guidance is issued.
A copy of the Technical Release is available here.
If you have questions please contact:
Edward C.
Hammond at (248) 988-1821 ehammond@clarkhill.com,
John P. Schneider at (616) 608-1108 jschneider@clarkhill.com,
Kristi R. Gauthier at (248) 988-5854 kgauthier@clarkhill.com, or
Ellen Hoeppner at (313) 965-8262 ehoeppner@clarkhill.com.
|
