Additional Clarification on New Appeals Process Requirements

WASHINGTON—Interim final rules describing the appeals process and external claims review that non-grandfathered self-insured group health plans must follow under the health care reform law have been issued by the Departments of Labor, Health and Human Services and the Internal Revenue Service.

The rules clarify certain issues that were not addressed in previous regulations.

The Patient Protection and Affordable Care Act mandates that employees in self-funded health plans be able to request a “federal external review” of coverage if a claim or benefit is denied through internal reviews conducted by employers and plan administrators.

Under the interim final rules, which were issued Monday and apply to plan years beginning on or after Sept. 23, 2010, a group health plan must give claimants up to four months to request an external review after an adverse claim or benefit decision. A preliminary review of that request must be conducted within five business days of the receipt of that request, and the plan must issue a written notification to the claimant within one business day after the preliminary review has been completed.

If the preliminary review finds the need for an external review, the request must be referred to an independent review organization accredited by URAC or a similar nationally recognized accrediting organization. To ensure there is no bias in the external review process, benefit plans are required to contract with at least three of these independent review organizations and rotate claims assignments among them. In addition, the review organizations cannot be eligible for any financial incentives based on the likelihood that they would support denial of benefits.

An expedited external review process is prescribed for situations requiring immediate medical care, including urgent care and for those in which denial of payment for treatment would jeopardize the claimant's ability to regain maximum function.

The interim final rules also outline specific requirements that group benefit plans must include in their contracts with independent review organizations, as well as the type of information and documents that the review organizations must consider in making decisions.

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Guidance Provided Regarding Health Care Reform's New Appeal Requirements

Regulations issued by the Departments of Health and Human Services, Labor, and the Treasury will standardize both an internal process and an external process that patients can use to appeal decisions made by their health plan. The rules issued on July 23, 2010 will provide uniformity to the existing patchwork of protections that apply to only some plans in some States, and simplify the system for consumers.



It appears that the bulk of responsibility for implementation for these processes' will fall on the shoulders of the insurance companies and the states. Employers will need to ensure that their employees are aware of these avenues of appeals.



Below is an excerpt from the fact sheet released by the Department of Health & Human Services:


The new rules issued by the Departments of Health and Human Services, Labor, and the Treasury will standardize both an internal process and an external process that patients can use to appeal decisions made by their health plan.


Today, if your health plan tells you it won’t cover a treatment your doctor recommends, or it refuses to pay the bill for your child’s last trip to the emergency room, you may not know where to turn. Most health plans have a process that lets you appeal the decision within the plan through an "internal appeal" – but depending on your State’s laws and your type of coverage, there’s no guarantee that the process will be swift and objective. Moreover, if you lose your internal appeal, you may not be able to ask for an "external appeal" to an independent reviewer.


The rules issued today will end the patchwork of protections that apply to only some plans in some States, and simplify the system for consumers. And they will ensure that all consumers in new health plans have access to internal and external appeals processes that are clearly defined, impartial, and designed to ensure that, when health care is needed and covered, consumers get it.


Internal Appeals:


The internal appeals process will guarantee a venue where consumers may present information their health plan might not have been aware of, giving families a straightforward way to clear up misunderstandings. Under the new rules, new health plans beginning on or after September 23, 2010 must have an internal appeals process that:
 Allows consumers to appeal when a health plan denies a claim for a covered service or
rescinds coverage;

 Gives consumers detailed information about the grounds for the denial of claims or coverage;  Requires plans to notify consumers about their right to appeal and instructs them on how to
begin the appeals process;

 Ensures a full and fair review of the denial; and

 Provides consumers with an expedited appeals process in urgent cases.


External Appeals:


If a patient’s internal appeal is denied, patients in new plans will have the right to appeal all denied claims to an independent reviewer not employed by their health plan. External appeals have helped consumers get the care they deserve: one study found that – in States that had external appeals – consumers won their external appeal against the insurance company 45% of the time.
While 44 States provide for some form of external appeal, the laws governing these processes vary greatly and fail to cover millions of Americans. The new rules will ensure that consumers with new health coverage in all States have access to a standard external appeals process that meets high standards for full and fair review.

These standards were established by the National Association of Insurance Commissioners (NAIC). States are encouraged to make changes in their external appeals laws to adopt these standards before July 1, 2011. The NAIC standards call for:
 External review of plan decisions to deny coverage for care based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit.

 Clear information for consumers about their right to both internal and external appeals –
both in the standard plan materials, and at the time the company denies a claim.

 Expedited access to external review in some cases – including emergency situations, or cases where their health plan did not follow the rules in the internal appeal.

 Health plans must pay the cost of the external appeal under State law, and States may not require consumers to pay more than a nominal fee.
 Review by an independent body assigned by the State. The State must also ensure that the reviewers meet certain standards, keep written records, and are not affected by conflicts of interest.
 Emergency processes for urgent claims, and a process for experimental or investigational treatment.

 Final decisions must be binding so, if the consumer wins, the health plan is expected to pay for the benefit that was previously denied.


If State laws don’t meet these standards, consumers in those States will be protected by comparable Federal external appeals standards. In addition, people in health plans that are not subject to State law – including new self-insured employer plans – will be protected by the new Federal standards.

COBRA Subsidy Not Mentioned in Bill

Members of the Senate have voted 60-40 to let an unemployment benefits extension bill that says nothing about the COBRA health benefits subsidy extension come up for a vote.

The House already has approved a version of the bill, H.R. 4213, Promoting American Jobs, Closing Tax Loopholes and Preventing Outsourcing Act, in December 2009.

The Senate could vote on final passage of its version of the bill by 9 p.m. Wednesday, according to the Senate floor calendar.

Back in February, when Sen. Max Baucus, D-Mont., the chairman of the Senate Finance Committee, and Sen. Charles Grassley, R-Iowa, the highest ranking Republican on the committee, introduced a version of the bill that became H.R. 4213, the the bill included a provision that would have extended the 65% federal COBRA health benefits extension.

Health Reform Rules Clarify Preventative Cost-Sharing

Health care reform regulations issued on Wednesday clarify that employers and insurance companies will be able to continue to impose cost-sharing requirements on preventative services employees receive from out of network providers.

There were questions throughout the industry if reform would require 100% coverage of both in and out of network preventative services, removing any incentive for employees to go in network for their routine preventative care.

Grandfathered plans are exempt from the requirement to cover preventative services at 100% with no cost-sharing.

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DOL Issues Mental Health Parity Implementation Clarification

The Department of Labor (DOL) issued an important clarification to the mental health parity regulations strongly advocated for by many in the industry that will provide the critical flexibility needed to avoid making major changes in benefits or cost-sharing to comply with the interim final regulations.

The clarification, issued today in the form of a DOL "Frequently Asked Question" (FAQ), should permit plans to divide the outpatient classification established by the parity regulation into professional and non-professional services which will solve the most urgent “testing” issue identified by plans.Problems with the way the regulations were drafted would have required insurers to make changes that either would have increased premiums significantly or required major benefit restructuring. In addition, these changes could have caused a loss of grandfather status.
The welcome clarification impacts the scheduled compliance of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) Interim Final Regulations for new and renewing groups as of July 1, 2010.

Early Retiree Reinsurance Program Begins Receiving Applications Today

Today, employers can begin submitting applications for the Early Retiree Reinsurance Program. Created by the Affordable Care Act, this program provides $5 billion in financial assistance to employers, unions and state and local governments to help them maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare. The program will reimburse up to 80% of claims incurred between $15,000 and $90,000 for each eligible member. The reimbursement is on a first come / first serve basis and once the $5 billion is depleted the program will end. If funds are not depleted on January 1, 2014 the program will end at that time.

To view the press release click here: http://www.hhs.gov/news/press/2010pres/06/20100629a.html

To view the fact sheet click here: http://www.healthreform.gov/newsroom/early_retiree_reinsurance_program.html

To view FAQ's, download the application and for additional information click here: http://www.hhs.gov/ociio/regulations/index.html#early_retiree

COBRA Subsidy Extension Receives Another Setback

WASHINGTON—Senate Democratic leaders on Thursday failed once again to win enough support to stop debate and bring to a floor vote a tax extenders bill, delivering another blow to backers on extending federal COBRA premium subsidies.

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