The US Court of Appeals for the Second Circuit’s recent ruling addresses various issues that could arise during a plan administrator’s review of a participant’s benefit claim and appeal and any ensuing litigation, including the deference to be granted upon review in a federal court, civil penalties and the possibility of introducing additional evidence outside the administrative record. This decision demonstrates the need for employers to review their benefit plans’ claims procedures to ensure they comply with applicable law and best practices.
The U.S. Department of Labor has released new guidance further delaying enforcement of certain Health Care Reform claims, appeals and external review requirements. Although the guidance was issued by the Department of Labor, the enforcement grace period applies to the U.S. Departments of Health and Human Services, Labor, and Treasury. The Department of Health and Human Services is also encouraging states to provide similar grace periods with respect to insurance issuers. The enforcement delay is intended to give the Departments time to publish new regulations to implement the claims, appeals and external review requirements under Health Care Reform.
Highlights of the technical release are:
Enforcement Grace Period Extended to Plan Years Starting On or After July 1, 2011 (January 1, 2012 for calendar year plans)
Requirement to include specific information to identify the claim involved in adverse benefit determination communications, such as the date of the service, the health care provider and the claim amount (if applicable).
Requirement to include a description of the standard that was used in denying the claim in adverse benefit claim determination communications (e.g., a claim denied because treatment is experimental).
For communications about a final internal adverse benefit determination, the requirement to include a discussion of the reasons for the decision.
Requirement to provide a description of available internal appeals and external review processes, including information regarding how to initiate an appeal.
For plans and issuers in states in which an office of health consumer assistance program or ombudsman is operational, the disclosure of the availability of, and contact information for, such program. The guidance includes a list of consumer assistance programs and ombudsmen for each state (Minnesota may have been inadvertently left off of the list), American Samoa, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands.
Enforcement Grace Period Extended to Plan Years Starting On or After January 1, 2012 (formerly on or after July 1, 2011)
24-hour review of an initial urgent care claim (shortened from the current 72-hour review period).
Requirement to provide claims and appeals notices in a culturally and linguistically appropriate manner.
Deemed exhaustion of internal claims and appeals processes if there is not strict compliance with the new Health Care Reform rules.
Requirement to include diagnosis and treatment codes and their corresponding meanings in claim denial notices.
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