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Health insurers that deny policyholders' claims will have six additional months, until January 2012, to meet new appeals and review procedures under an amended rule issued June 22 by the three federal agencies responsible for implementing the health care reform law.
The departments of Health and Human Services, Labor, and Treasury issued the 95-page amendment to the interim final rule for internal claims and appeals and external review processes for group health plans and individual health insurance plans. The interim rule was published in July 2010 ( 140 HCDR, 7/23/10).
The amended interim final rule, which applies only to “non-grandfathered” plans begun after the Patient Protection and Affordable Care Act was enacted March 23, 2010, will be published in the June 24 Federal Register with a 30-day comment period.
“The right to external appeal is considered one of the most important consumer protections that you can have,” Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, said in a telephone press conference. “Consumers do not want insurance companies making medical decisions for them or for their families,” said Larsen, whose office in the Department of Health and Human Services' Centers for Medicare & Medicaid Services is responsible for implementing federal health insurance reforms under PPACA.
PPACA establishes for the first time a right to internal and independent external appeals for health care consumers, Larsen said. The appeals provision is “one of the key protections” in PPACA, he said.
Larsen said many states need a longer time to enact legislation or regulations to meet standards established in 2010 to give health care policyholders access to appeals and review procedures. Insurance companies in states that have not passed laws that comply with the federal standards will have to provide customers with either an external review process operated by HHS and the Office of Personnel Management or they can contract with accredited, independent external review organizations under a process established by the Department of Labor for self-insured plans. Technical guidance was also issued with instructions for participating in a federally administered external review process.
HHS is operating appeals and external review procedures in Alabama, Nebraska, and Mississippi, the only three states that have no appeal procedures, according to HHS.
The amendment issued by the three agencies modifies a list of 16 standards for appeals and review procedures issued in 2010, Larsen said. The modified standards are interim standards that will be in effect until 2014, when major provisions of PPACA take effect expanding coverage to nearly all Americans.
Among the changes made in the standards that must be met for appeals and external reviews were a relaxation of the time limit for completing reviews to 60 days instead of 45 days, Larsen said.
In addition, in the original rule, claimants would have had four months to file complaints. In the amended interim rule they have only two months, Larsen added.
Many of the standards in the first interim final rule still apply, Larsen said. He cited the requirement that filing fees for appeals and reviews cannot exceed $25. “It was important in developing this interim list that we still maintain the core consumer protections, and whatever we tweaked we felt very comfortable did not … back off the protections that consumers would receive,” he said.
However, Larsen said the scope of the review process was narrowed. The scope of the 2010 interim final rule went beyond disputes over medical necessity to include contract disputes. “We did modify the scope for the federal process” to include only medical judgment decisions to align the rule more with a model rule developed by the National Association of Insurance Commissioners.
If an individual believed he or she were subject to rescissions, retroactive denials of health care coverage prohibited by PPACA, that would be subject to the appeals and external review procedures, Larsen said.
By Sara Hansard
The amendment to the 2010 interim final rule on Internal Claims and Appeals and External Review Processes is at http://op.bna.com/hl.nsf/r?Open=jcon-8j3sdl .
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