The U.S. Departments of Treasury, Labor, and Health and Human Services have collectively released amended interim final regulations addressing internal claims and appeals and the external claims review requirements under health care reform.

The new regulations amend initial claims review guidance issued by the Departments on July 22, 2010. (Click here to read our legal alert on the initial guidance.) They also supersede the Department of Labor’s Technical Release 2010-02, which extended a non-enforcement reprieve for certain rules affecting health claims and appeals. (Click here to read our legal alert on the reprieve.)

Health care reform requires group health plans to maintain an internal claim and appeal process that meets certain standards and to provide for an external appeal process. The new guidance provides a measure of welcome relief for plans and plan sponsors who will implement the claim and appeal requirements when the non-enforcement period ends on January 1, 2012.

For internal claims and appeals, the changes include:

  • Restoring to 72 hours (from 24 hours) the period by which a plan must notify a claimant of a benefit determination with respect to an urgent care claim, provided that the plan defers to the attending provider as to whether the claim is for urgent care.
  • Eliminating the requirement to automatically provide diagnosis and treatment codes as part of a notice of adverse benefit determination, and instead requiring the notice to state that the codes (and their meanings) are available upon request.  
  • Limiting a claimant’s ability to seek immediate external or judicial review because of a plan’s failure to strictly adhere to the claims procedure rules when the failure is very minor and meets certain other requirements.  
  • Providing that a plan may meet its obligation to furnish culturally and linguistically appropriate notices by including a statement, in the relevant non-English language, about the availability of language services (and making those services available), and providing that this requirement applies when it has been determined that 10 percent of the residents in the applicable county speak a particular non-English language.  
  • For external reviews by Independent Review Organizations (IROs), some of the more notable changes include:
  • Temporarily narrowing the scope of claims eligible for the federal external review process to claims involving medical judgment or rescissions of coverage.
  • Clarifying that a plan must provide benefits (including payment of the claim) without delay upon a binding decision from the IRO, regardless of whether the plan pursues judicial review.  
  • Making certain adjustments in the rules governing state external review processes.  

In addition, the various agencies also released technical guidance on certain related issues:

  • Technical Release 2011-02, issued by the U.S. Departments of Labor and Health and Human Services, establishes a transition period until January 1, 2012, for state external review process implementation. It also modifies the enforcement policy with respect to IROs. To be eligible for a safe harbor from enforcement, self-insured plans will be required to contract with at least two IROs by January 1, 2012, and with at least three IROs by July 1, 2012. Finally, the release includes revised model notices for internal and external benefit determinations.  
  • A technical guidance document issued by the U.S. Department of Health and Human Services offers instructions for self-insured, non-federal government plans (and insured plans) on how to select a federal external review process when an adequate, applicable state process is not in place. It requires plans to submit information to the Department on the selected process by the earlier of January 1, 2012, or the date the external review process is used.  
  • The U.S. Department of Health and Human Services released a technical guidance document with additional information on implementing the culturally and linguistically appropriate standards for claim and appeal notices.