Released August 30, 2010I Download as a PDF
August 30, 2010 -- The PPACA requires health plans to comply with new internal claims and appeals procedures, and external review procedures (see
Internal Claims and Appeals, and External Review Process). These provisions become applicable to both
non-grandfathered and plans that lose grandfathered status on the first day of the first plan year beginning on and after September 23, 2010. Interim guidance (
Technical Release 2010-01) has just been issued, specifically relating to the external review process that is to be used by self-funded plans subject to ERISA
1.
According to this guidance, a self-funded plan, subject to ERISA, can either follow the federal guidelines set forth in the Technical Release; or, the plan can follow the relevant State’s external review process.
Standard external review for self-insured group health plans
Following are the procedures for an external review:
- A request for external review must be submitted by the claimant within 4 months of receiving a notice of adverse benefit determination.
- Preliminary review. Within 5 business days following the date of receipt of the external review request, the group health plan must complete a preliminary review of the request to determine whether:
Within one business day following the completion of the preliminary review, the plan must issue a written notice to the claimant. If the request is complete, but not eligible for external review, such notice must include the reasons for its ineligibility and contact information for the DOL’s Employee Benefits Security Administration (toll-free number 866-444-EBSA). If the request is not complete, the notice must describe the information and materials necessary to make the request complete. The plan must allow the claimant to perfect the request for external review within the 4-month filing period, or within the 48-hour period following the receipt of the notification, whichever is later.
- Referral to Independent Review Organization. The group health plan must refer the claimant to an accredited independent review organization (IRO) to conduct the external review. Plans must contract with a minimum of three IROs and rotate claim assignments among them.
The guidance sets forth the criteria for contracts between plans and IROs. Of particular note, contracted IROs cannot receive any financial incentives from the plan “based on the likelihood that the IRO will support the denial of benefits.”
Upon receipt of information submitted by the claimant, the assigned IRO must forward the information to the plan within one business day. The plan may reconsider its adverse benefit determination; however, reconsideration by the plan cannot delay the external review. The plan must then notify the claimant and the IRO of its decision within one business day.
The IRO is required to review all relevant information and documents in a timely manner. The IRO must then provide written notice of the external review decision within 45 days following receipt of the request for external review.
IROs must maintain records of claims and notices associated with the external review process for six years; and must make these records available for examination by the claimant, the plan, and appropriate federal or state oversight agencies.
- Reversal of plan’s decision. Upon receipt of a notice of a final external decision reversing the adverse benefit determination, the plan must provide coverage or payment for the claim.
Expedited external review for self-insured group health plans
The procedures for requesting an expedited external review are:
- A group health plan must allow a claimant to request an expedited external review in the event that an adverse or final adverse benefit determination:
- Involves a medical condition for which the timeframe for completing an internal or external appeal would seriously jeopardize the life or health of the claimant, or his/her ability to regain maximum function; or
- Concerns an admission, availability of care, continued stay, or health care item or service relating to emergency care in which the individual has not been discharged from the facility.
- Immediately upon receipt of the request, the plan must make a preliminary review determination of whether the request meets the standard external review criteria, and then immediately notify the claimant as to eligibility for an expedited review.
- Upon a determination that a request is eligible for an expedited external review, the plan will refer the matter to a contracted IRO for standard review. The plan must provide or transmit all necessary documents and information considered in making the adverse or final internal adverse benefit determination to the IRO electronically, by phone, by fax, or other expeditious method.
- The IRO must provide notice of the final external review decision as expeditiously as the claimant’s medical condition or circumstances require, but in no event, more than 72 hours following receipt of an expedited external review request. If the IRO does not provide the notice in writing, it must follow-up with a written confirmation of its decision within 48 hours.
Model Notices
The agencies have issued model notices to assist in accomplishing the internal and external review process. These notices are:
Plans subject to ERISA must continue to comply with the ERISA claims and appeals procedure. At this time, plan sponsors should review their existing procedures, and incorporate any changes necessitated by these new rules.
1In the case of an insured plan, the insurer is responsible for managing the claims and appeals process. In states that have an existing external appeal process, this process must be followed between now and July 1, 2011. During this time, HHS will make a determination about whether the states’ external process is compliant and if not, make recommendations for changes. States without an external review process should seek additional guidance from HHS’s “Consumer Health Plan Appeals” website. Self-funded plans exempt from ERISA, are likewise subject the State’s internal claims and appeals process, including the external review process.
About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.
The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations.
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