Under the Patient Protection and Affordable Care Act, a non-grandfathered group health plan must adopt an improved internal claims and appeal process and follow minimum requirements for external review. On July 23, 2010, interim final regulations were issued implementing these requirements (the Interim Final Rule). The appeals process rules are effective for plan years beginning on or after September 23, 2010. Comments on the Interim Final Rule are being accepted until September 21, 2010.
Key provisions of the Interim Final Rule include information on:
This Legislative Brief summarizes the new Interim Final Rule. Please read below for more detailed information. For a copy of the regulations, see www.federalregister.gov/a/2010-18043.
SUMMARY OF THE INTERIM FINAL RULE
Internal Claims and Appeals Process for Group Health Plans
Health care reform requires group health plans to implement an effective internal claims and appeals process. These plans, as well as health insurance issuers providing their health insurance coverage, must follow the Department of Labor’s claims procedure rules for group health plans.
In addition to the existing DOL claims procedure regulations, group health plans must follow a number of new requirements:
The Interim Final Rule adds rescissions of coverage to the definition of the term adverse benefit determination. A rescission is a cancellation or discontinuation of coverage that has a retroactive effect. A cancellation because of a failure to timely pay premiums for coverage is not considered a rescission.
External Review Standards
Group health plans must comply with either a state external review process or the federal external review process. The Interim Final Rule provides guidance on which process must be followed.
State Standards for External Review
If a state external review process that applies to and is binding on an insurance issuer includes the consumer protections in the NAIC Uniform Model Act in place on July 23, 2010, then the issuer must comply with that state external review process. In that case, where benefits under a group health plan are provided through health insurance coverage, the issuer must provide the external review process and the group health plan itself is not obligated to do so. Some self-insured group health plans may be subject to the state external review process if they are not subject to ERISA preemption.
Any plan or issuer that is not subject to a state external review process must comply with the federal external review process. A plan or issuer will be subject to the federal process if there is not state external review process or if the state external review process does not meet the minimum requirements of the NAIC Uniform Model Act.
The Department of Health and Human Services will determine whether a state external review process meets the minimum requirements. HHS will also provide a transition period for plan years beginning before July 1, 2011, where existing state external review processes will be treated as meeting the minimum requirements. This transition period will give states the opportunity to review and amend their processes. For plan years beginning on or after July 1, 2011, the federal external review process will apply unless HHS determines that the state process meets the minimum standards.
Federal External Review Process
The health care reform law requires a federal external review process to be established. The Interim Final Rule does not establish that process, but it does describe the standards that will be included. Plans or issuers that are not subject to a state external review process will have to follow the federal process. For an insured group health plan, if either the issuer or the plan complies with the federal process, then the obligation is satisfied for both the plan and the issuer.
The federal external review process will apply to most adverse benefit determinations or final internal adverse benefit determinations, including rescissions. However, it will not apply to denials based on a participant or beneficiary’s ineligibility for the plan.
The standards to be issued for the federal external review process will include procedures for initiating and conducting the review, an expedited external review process for certain claims, additional consumer protections for claims involving experimental or investigational treatment, and additional notices and disclosures to claimants.
Notices of available internal claims and appeals and external review processes must be provided in a culturally and linguistically appropriate manner. This means providing notices in a non-English language if certain thresholds are met for the number of people who are literate in the same non-English language.
For a group health plan that covers fewer than 100 participants at the beginning of the plan year, the threshold is 25 percent of all plan participants being literate in only the same non-English language. For a plan that covers 100 or more participants, it is the lesser of (a) 500 participants, or (b) 10 percent of all plan participants.
If an applicable threshold is met, the notice must be provided in the non-English language upon request. In addition, the plan or issuer must include a statement in the English version of all notices offering the notice in the non-English language. The statement must be prominently displayed in the non-English language. Once a request has been made by a claimant, all future notices to that claimant must be provided in the non-English language. Also, if the plan or issuer has a customer assistance process that answers questions or gives assistance with filing claims and appeals (such as a telephone hotline), the assistance must be provided in the non-English language.