Self-funded Plans Have Easier Time Complying with Claims Appeal and Review Obligations Under New DOL Rules
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MyHealthGuide Source: Todd Leeuwenburgh, Editor, Employer Health Benefits, Thompson Publishing Group, 6/24/2011, www.Thompson.com
Self-funded plans, insurers and other payers will have an easier time complying with health reform’s internal appeals and external review rules, under rules the U.S. Departments of Labor, Treasury and Health and Human Services issued June 24. The changes, such as dropping the requirement for plans to display diagnosis and treatment codes on initial and final notifications of adverse determinations, should ease burdens for employer-sponsored plans. Another change lengthened the time allowed to review urgent care claims from “no more than 24 hours” to “as soon as possible but no more than 72 hours.”
According to the agencies, patients can still appeal if their coverage is cancelled by an insurer, and decisions by external review panels are still binding. The amendments take effect as an interim final rule on July 23. Comments from the public are being accepted until Aug. 23. The amendments are on line at http://www.gpo.gov/fdsys/pkg/FR-2011-06-24/pdf/2011-15890.pdf.
More flexible stance on codes
The agencies dropped their demand that plans automatically provide diagnosis and treatment codes as part of a notice of adverse benefit determination (initial or final) and instead merely required that plans tell participants they are able to get them on request. Not surprisingly, plans are still required to identify the claim, date of the service, health care provider and amount.
Plans objected that diagnosis and treatment codes were protected health information (PHI), and since policyholders who get explanations of benefits are often not the patient, an automatic policy of providing them would violate the HIPAA privacy rule. Plans and insurers also cited the cost and administration burden of more than 20,000 treatment and diagnosis codes. .
24-hour limit on urgent care claims eased
The July 2010 regulations provided that a plan or insurer must notify a claimant of a benefit determination (whether adverse or not) for urgent care claims no later than 24 hours after getting the claim. That represented a toughening of previous DOL rules, which required 72 hours for urgent care claims.
The agencies now say instead that plans can take 72 hours as per the DOL rules, but only as an outer limit, and only if the plan or insurer accepts the attending provider’s decision as to whether a claim constituted “urgent care.”
The reason cited was it would be more expensive for the business community to convert to a 24-hour rule than to a 72-hour rule. (particularly plans that will have to comply for the first time with such turnaround rules), the agencies stated
Providers — particularly hospitals — wanted faster turnaround, because they are bound under EMTALA to care for patients who need to be stabilized without asking about insurance.
Minor errors will not invalidate internal review
Under the July 2010 rule, if a plan failed to give a fair or timely internal review of a claim, the participant would be considered to have exhausted the plan’s internal process and could immediately move on to seeking independent review or court remedies.
The newer rule creates an exception to this for compliance errors that are minor and meet certain other conditions.
Under the amended approach, any violation of the procedures outlined in the rule would permit a claimant to seek immediate external review or court action unless the violation was:
- 1) de minimis;
- 2) non-prejudicial;
- 3) attributable to good cause or matters beyond the plan’s or insurer’s control;
- 4) in the context of an ongoing good-faith exchange of information; and
- 5) not reflective of a pattern or practice of non-compliance.
More businesses to furnish foreign language notices
The agency increased the burden on plans to furnish notices in foreign languages by lowering the thresholds set in July 2010. Now all plans must print notices in the dominant foreign language if 10% of the population of a county speaks that language (and not English). Under the previous rules, companies with fewer than 100 employees would have to furnish foreign-language notices in counties where 25% of the population spoke the second language.
Group health plans and insurers offering group or individual coverage in 255 counties will have to print the foreign language notices. Most of the counties will be printing those notices in Spanish, but two Alaska counties have to print them in Tagalog, and a few Arizona and California counties must print them in Navajo and Chinese, respectively. The counties to which the requirement applies include 77 counties in Texas and 78 in Puerto Rico.
Stringent state rules will be followed earlier
On Jan. 1, 2012, all plans will have to begin complying with either the federal rule based on the NAIC’s Uniform Model Act, or state laws that meet or go beyond the minimum consumer protections of the NAIC. That changes the previous rule, which said plans with years starting July 2011 would have a year to comply.
In order to start compliance in states that implemented more stringent state external review processes earlier, the feds will apply state external processes in lieu of the federal external review process, starting Jan. 1, 2012.
External review temporarily narrowed
Comments indicated that the scope of external review claims was too broad. The amendment temporarily narrows the scope of claims eligible for federally mandated external review. External review decisions are binding under the rules.
Now eligible claims will only be those that involve
- (1) medical judgment (excluding those that involve only contractual or legal interpretation without any use of medical judgment; see box), as determined by the external reviewer; or
- (2) a rescission of coverage.
| Examples of Medical Judgment |
Medical judgments that will make a claim eligible for federally mandated external review under the amended claims appeal and external review rules include:
|
Some plans and insurers said there is an insufficient number of independent review organizations, and they are going to raise prices in response to increased demand for their services, at the expense of plans. Independent review organizations (IROs) denied this.
Some plans and insurers stated that handing plan document interpretation and legal interpretation issues over to an IRO may raise:
- 1) issues of consistency of interpretations within a plan;
- 2) unwarranted consistency across plans that have unique standards;
- 3) ERISA fiduciary responsibility concerns; and
- 4) possible conflicts.
Binding IRO decisions must be paid immediately
The agencies provide another clarification that once a binding external review decision is made, the plan or insurer must provide benefits (including by making payment on the claim), in accord with the IRO’s opinion, without delay — regardless of whether the plan or insurer intends to seek judicial review.
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