Departments Further Delay Enforcement of Certain

Internal Claims and Appeals Procedures Under PPACA

 

            On March 18, 2011, the Department of Labor (DOL) issued Technical Release 2011-01 (2011 Technical Release) to provide an extension of the non-enforcement period relating to certain interim procedures for internal claims and appeals under the Patient Protection and Affordable Care Act (PPACA).  The Technical Release serves to extend and modify the original non-enforcement period that was provided under Technical Release 2010-02 (2010 Technical Release), issued by the DOL on Sept. 20, 2010.  The 2011 Technical Release gives employers that sponsor non-grandfathered group health plans yet more time to comply with PPACA's requirement to have an effective internal claims and appeals process, which is generally effective for plan years beginning on or after Sept. 23, 2010.  

Claims and Appeals Requirement Under PPACA and Interim Final Regulations

            Under PPACA, group health plans and health insurance issuers that are not grandfathered health plans are required to have an effective internal claims and appeals process by the first plan year beginning on or after Sept. 23, 2010.  PPACA requires that the internal process generally follow the claims and appeals rules under the Employee Retirement Income Security Act of 1974 (ERISA), as modified by additional standards set forth in regulations issued by the DOL, the Department of Health and Human Services, and the Department of the Treasury (Departments).

            The Departments published interim final regulations implementing the PPACA claims and appeals mandate on July 23, 2010.  The interim final regulations provide guidance on the internal claims and appeals procedures and external review process.  For a detailed discussion of the interim final regulations, see our Ice Miller Health Reform Alert on the PPACA claims and appeals process. 

            The Departments intend to issue an amendment to the interim final regulations in the near future that takes into account comments and other feedback received from stakeholders on such regulations.  The Departments consider the relief provided under the 2011 Technical Release to act as a bridge until an amendment to the interim final regulations is issued.   

Grace Period Provided Under the 2010 Technical Release

The 2010 Technical Release provided an enforcement grace period for compliance with certain new standards required under the internal claims and appeals process.  In order to give plans and issuers more time to implement procedures and make changes to computer systems, an enforcement grace period was put into effect until July 1, 2011 with respect to the following standards:

1.      the expedited time frame for making urgent care claim determinations (shortened from 72 to 24 hours);

2.      the requirement to provide claims and appeals in a culturally and linguistically appropriate manner;

3.      the requirement to provide additional and more specific content in notices; and

4.      the strict adherence standard whereby a plan's failure to strictly adhere to all the requirements of the interim final regulations will result in the claimant's deemed exhaustion of the internal process, permitting the claimant to initiate external review or to seek other remedies available under ERISA or state law. 

The 2010 Technical Release stated that during the enforcement grace period, plans were nonetheless required to be working in good faith to implement these additional standards.

Extension and Modification of Grace Period Under the 2011 Technical Release

            The 2011 Technical Release extends the enforcement grace period until plan years beginning on or after Jan. 1, 2012, with respect to item 1 above (regarding the time frame for making urgent care claims decisions), item 2 above (regarding providing notices in a culturally and linguistically appropriate manner), and item 4 above (regarding substantial compliance).  With respect to item 3 above (regarding additional content in notices), the period of extension is based on the type of additional content required in the notices as follows:

Enforcement Date

Content

Plan years beginning on or after Jan. 1, 2012.

·        To include in notices of adverse benefit determinations and final internal adverse benefit determinations the diagnosis code, the treatment code, and their corresponding meanings.

Plan years beginning on or after July 1, 2011 (January 1, 2012 for calendar year plans).

·        To include in notices of adverse benefit determinations and final internal adverse benefit determinations the date of service, the health care provider, and the claim amount.

 

·        A description of available internal appeals and external review processes, including information on how to initiate an appeal.

 

·        The reasons for the adverse benefit determination, including the denial code and its corresponding meaning, as well as a description of the plan's or issuer's standard, if any, that was used in denying the claim.  A final internal adverse benefit determination must contain a discussion of the decision.

 

·        Disclosure of the availability of, and contact information for, an applicable office of health insurance consumer assistance or ombudsman established under Section 2793 of the Public Health Service Act.

In addition, the 2011 Technical Release relieves employers of the requirement under the 2010 Technical Release that they work in good faith to implement the additional standards.  No such requirement will apply for either the extended or the original enforcement grace period.

Other Assistance in the 2011 Technical Release

            The 2011 Technical Release provides information on additional steps taken by the Departments to assist group health plans and issuers in making the required disclosures.  First, the 2011 Technical Release contains an appendix that provides the current list of relevant consumer assistance programs and ombudsmen.  The DOL will continue to review and update this list on its Web site, and group health plans are instructed to check the current listing on the Web site within a reasonable time before the beginning of the plan year to ensure that their notices contain up-to-date information.  Group health plans are not required to update the information more than once per year.

            Second, the 2011 Technical Release reminds self-insured group health plans that the Departments have issued guidance with respect to implementing the external review process.  The guidance can be found in Technical Release 2010-01 and in the Departments' frequently asked questions.  Lastly, the 2011 Technical Release reminds group health plans that if they complete and use the model notices issued by the Departments, they will be considered to meet the relevant content requirements under PPACA with respect to this coverage mandate. 

Ice Miller LLP has been tracking the regulations and other guidance issued under PPACA, and you can read about the regulations that have been issued thus far, including the grandfather rule, the adult-child rule, the prohibition on annual and lifetime limits, mandated preventive services, and the claims and appeals process on Ice Miller's Health Care Reform Web site.

            For more information regarding the internal claims and appeals process under PPACA, or for any other questions regarding how health care reform impacts group health plans, please contact Mary Beth Braitman, Terry A. M. Mumford, Christopher Sears, Tara Sciscoe, Shalina Schaefer, or the Ice Miller LLP Employee Benefits attorney with whom you work.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.

 

March 30, 2011