CMS Scales Back Appeal Rules
www.modernhealthcare.com June 27, 2011
By Rebecca Vesely
Consumer groups are dismayed over a decision by federal regulators to scale back rules on health insurance appeals and push back their implementation.
But health insurers say the changes will make the appeals process easier on customers.The CMS last week issued further guidance on a provision in the Patient Protection and Affordable Care Act that aims to strengthen and standardize consumer protections on health insurance denials, appeals and independent reviews. States will now have an extra six months to approve legislation that complies with the new federal consumer protections, with the deadline for state enactment pushed back from July 1 of this year to January 2012.
The delay is necessary to make sure states and health plans have adequate regulations in place to comply, Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the CMS, told reporters during a conference call. He noted that most statehouses have recessed without completing this work.
The CMS is still assessing how many states already have laws that meet the federal consumer protection standards. That process should be completed next month, Larsen said. Only three states—Alabama, Mississippi and Nebraska—have no laws on external reviews of claim and coverage denials, according to HHS.
If states don’t comply by January 2012, then health plans operating in those states will have to follow appeals processes provided by HHS or the Labor Department, Larsen said. In 2014, further standards on consumer protections are slated to go into effect.
Consumer groups said they don’t like the extended timeline or other changes to the interim rule, which was issued in July 2010. For instance, health plan members will have 60 days to request a health plan review of denied claims, down from the original timeline of 120 days. But health plans will have extended time—72 hours instead of the original 24 hours—to make decisions on internal appeals in urgent cases.
The CMS also narrowed the scope of decisions that can trigger an external review to coverage rescissions and claims denials based only on “medical judgment.” The previous interim rule allowed consumers to also get an external review of denials based on benefit coverage, pre-existing conditions and provider network exclusions.
Although Larsen described these changes as “tweaks,” Stephen Finan, senior policy director for the American Cancer Society Cancer Action Network, said they place more barriers and burdens on the consumer. Limiting reviews to denials based on medical judgment would “fail to address a significant portion of denied claims based on other factors such as coding errors and failure to receive pre-authorization,” Finan said.
Health insurers disagreed. Robert Zirkelbach, spokesman for America’s Health Insurance Plans, said in an e-mailed statement that the changes “streamline the appeals process so that patients can receive the most accurate and timely decision about their medical claims.”
Comments