Following up on an earlier post, the new claims appeals and review rules present some opportunities to claimants and concomitant risks to plans. PHS incorporate the existing claims regulation DOL Reg. Sec. 2560.503-1 into an augmented claims procedure for internal appeals. PHS Act § 2719 provides that plans and issuers must initially incorporate the internal claims and appeals processes set forth in 29 CFR 2560.503-1 and update these processes as required by the DOL.
The interim final regulations (Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Internal Claims and Appeals and External Review Processes Under the Patient Protection and Affordable Care Act) released on July 23, 2010 appear in the Federal Register at Volume 75, Number 141, Pages 43329-43364.
Grandfathered plans are exempt. The value of this exemption will become vividly apparent as the new rules are reviewed.
The regulations require “strict adherence” to the new claims procedure. Substantial compliance or de minimus violations are not, the regulations state, sufficient to avoid the determination of non-compliance. (The consequences of non-compliance will be reviewed later — but note for now that the regulations purport to change the standard of review to de novo in this event. Thus, plan fiduciaries would be well advised to put maximum effort toward compliance.
At the outset, careful observance of what constitutes an adverse benefit determination is necessary. The definition is broader than the definition in the DOL claims procedure regulation.
For example,
Failure to make a payment in whole or in part includes any instance where a plan pays less than the total amount of expenses submitted with regard to a claim, including a denial of part of the claim due to the terms of a plan or health insurance coverage regarding copayments, deductibles, or other cost- sharing requirement.
In the next post I will summarize the new requirements for the claims regulations as augmented.
These strict rules are definitely needed. If you read our story (submitted as a public comment), you’ll see these rules finally provide a way to rein insurance companies in from their haphazard practices of delaying and delaying and delaying, sending denial letters listing wrong diseases, spelled wrong, and relying on clinical policies that word for word copy references that are 25 years old, contradict the very words they copy, spell author names wrong, do not even apply to the condition, and administered by general practitioners unqualified and inexperienced in this area. Our story is similar to some court cases: (mostly) Boldon vs Humana, Whitley vs Carolina, Durgin vs Blue Cross, and others.