Internal and External Claims and Appeals Amendment Clarifies Guidance for Health Insurers and Self-Insured Group Health Plan

June 24, 2011

On June 22, 2011, the Departments of Health and Human Services (HHS), Labor, and the Treasury released amendments to the Interim Final Regulations for internal claims and appeals and external review processes under the Patient Protection and Affordable Care Act (PPACA). The amendments apply to non-grandfathered individual insurance policies as well as non-grandfathered insured and self-insured group health plans. At the same time, the Department of Labor published Technical Release 2011-02 providing further guidance on external review.

Below is a summary of the relevant changes:

• Diagnosis and procedure codes are no longer required on all denial notices. Instead, denial notices must identify the opportunity to request this information and it must be provided if requested by the claimant.
• Language thresholds will be determined based upon the claimant’s county of residence rather than by employer. If a county meets the established threshold for a given language, a statement in the relevant non-English language(s) about the availability of language services must be included in denial notices. The requirement to translate notices into languages other than English is met if language assistance services are provided to enrollees. Some notices must still be translated, but only if requested by the claimant.
• The timeframe for benefit determinations on an urgent care claim has been changed back to 72 hours instead of 24 hours.
• Claimants cannot proceed directly to external review for violation of any of the internal review process requirements if the violation is “de minimis,” (i.e., did not cause and is not likely to cause prejudice or harm to the claimant’s right to external review). This is provided that the plan or insurer demonstrates the violation was for good cause or due to matters beyond its control and occurred in the context of an ongoing and good faith exchange with the claimant.
• The model notices for initial and final internal adverse benefit determinations and external adverse benefit determinations have been revised.
• For external reviews initiated on and after September 20, 2011, the scope of claims eligible for the Federal External Review process is narrowed (at least temporarily) to those involving medical judgment and rescission of coverage. Those involving only contractual or legal interpretation are excluded.
• By July 31, 2011, HHS intends to issue determinations regarding each state's compliance with either (i) "NAIC-parallel" external review process standards (i.e., standards meeting all the consumer protections in the NAIC Uniform Model Act), or (ii) temporary "NAIC-similar" process standards established by the Departments. Existing state external review processes are deemed compliant until December 31, 2011. By January 1, 2012, non-federal government self-insured plans and insurers must have implemented for each state an external review process that complies with:
  1. the state's "NAIC-parallel" process standards;
  2. the state's temporary "NAIC-similar" process standards, or
  3. a federally administered external review process if HHS has determined that the state's process complies with neither the "NAIC-parallel" nor "NAIC-similar" standards.
  If a state's external review process does not meet "NAIC-parallel" standards by January 1, 2014, the federally administered external review process must be used for that state.

For Reference
The original Interim Final Regulations for internal and external claims and appeals process were released in July 2010. Read our original claims and appeals news alert.

For continued updates on claims and appeals process and all other PPACA news, please visit our health care reform website at www.informedonreform.com and save it as a favorite.