As explained in our August 2010 article, “interim final regulations” issued under the Affordable Care Act (“ACA”) will require group health plans (other than those that are “grandfathered”) to comply with a number of internal claims and appeals procedures that go beyond those previously required under ERISA. Although these new requirements are generally effective for plan years beginning on or after September 23, 2010, the Department of Labor (“DOL”) granted a limited extension of this compliance deadline in late 2010. Then in March of this year, the compliance deadline was further extended for certain of these requirements.
The ACA-made the following changes to ERISA’s claims and appeals procedures:
- The types of “adverse benefit determinations” for which the internal claims and appeals procedures are available must include any “rescission” of coverage.
- Notice of any denial of an “urgent care claim” must be provided within 24 hours, rather than 72 hours.
- Plans must provide claimants with any new or additional evidence considered, relied upon, or generated in connection with the claim, as well as any new or additional rationale for a denial at the initial appeals stage, and a reasonable opportunity for the claimant to respond to the new evidence or rationale.
- Decisions regarding hiring, compensation, termination, promotion, or other similar matters with respect to an individual (such as a claims adjudicator or medical expert) must not be based on the likelihood that the individual will support the denial of benefits.
- Notices must be provided in a culturally and linguistically appropriate manner.
- Notices to claimants must include the following additional content:
a. Information sufficient to identify the claim involved, including the date of service, the health care provider, the claim amount, the diagnosis code and its corresponding meaning, and the treatment code and its corresponding meaning;
b. In the case of any claim denial, the denial code and its corresponding meaning, as well as a description of the plan’s standard (if any) that was used in denying the claim;
c. A description of available internal appeals and external review processes, including information on how to initiate an appeal; and
d. The availability of, and contact information for, an applicable state office of health insurance consumer assistance or ombudsman.
- If a plan fails to strictly adhere to all of these requirements, a claimant is deemed to have exhausted the plan’s internal claims and appeals procedures — regardless of whether the plan has “substantially complied” with the requirements. This will allow the claimant to initiate any available external review process or remedies available under ERISA or state law.
All of these new rules were originally set to take effect for plan years beginning on or after September 23, 2010. However, in Technical Release 2010-02, the DOL granted an enforcement grace period until July 1, 2011, for some of the above standards. As explained in our October 2010 article, that enforcement grace period applied to standard #2, above (the timeframe for making urgent care decisions), standard #5 (providing notices in a culturally and linguistically appropriate manner), standard #6 (additional content in benefit determination notices), and standard #7 (strict compliance). In that Technical Release, the DOL announced that it would not take any enforcement action against a group health plan that was working in good faith to implement these standards.
The enforcement grace period has now been even further extended, but with a few modifications.Technical Release 2011-01 extends the enforcement grace period in two different respects. First, it extends until plan years starting on or after Jan. 1, 2012, the enforcement grace period for standard #2 (24-hour urgent care claim decisions), standard #5 (culturally and linguistically appropriate notices), standard #6(a) (only with respect to diagnosis and treatment codes), and standard #7 (strict compliance). This Technical Release also eliminates the requirement that plans be working in good faith to implement these standards.
Second, it extends until plan years starting on or after July 1, 2011, the rest of the additional disclosure requirements set forth in standard #6 (i.e., other than the diagnosis and treatment codes). Note that for non-calendar year plans, this compliance date could be earlier than January 1, 2012.
It is important to remember that Technical Release 2011-01 does not extend the compliance deadline for standards # 1, 3 or 4. Likewise, the enforcement grace period does not change the effective date for complying with the new external review processes required under the ACA. That requirement continues to be effective as of the first plan year beginning on or after September 23, 2010. However, the DOL did indicate in a footnote to Technical Release 2011-01 that the scope of the federal external review process (i.e., for self-funded plans) is still under review and may be addressed in future guidance.