The U.S. Departments of Treasury, Labor, and Health and Human Services have released guidance on how employer-sponsored self-funded group health plans can satisfy the new external claims review requirements arising from the federal health care reform legislation.
The new guidance, which supplements initial claims review guidance issued by the Departments on July 22, 2010, is primarily set forth in the Department of Labor’s Technical Release 2010-1. (Click here to read our legal alert on the initial guidance.)
All self-funded group health plans (other than grandfathered health plans) that are subject to ERISA must comply with the new external claims review guidance as of the first day of the first plan year beginning on or after September 23, 2010 (January 1, 2011, for calendar-year plans). Plan sponsors will have to modify plan documents and enter into contracts with independent review organizations (IROs) before the start of that plan year.
According to the Technical Release, and until the Departments publish further guidance, a self-funded group health plan can satisfy the external claims review requirement by either (1) participating in an external review process established by a state, to the extent that the state makes such a process available, or (2) establishing its own external claims review process that meets certain requirements set forth in the Technical Release. If a plan establishes its own external claims review process, the process must do the following:
- Contemplate contracts with at least three IROs accredited by URAC or a comparable nationally recognized organization to conduct external claims reviews and provide an unbiased method for selecting the IRO (e.g., rotation of assignments).
- Permit a claimant to file a request for either a “standard” or “expedited” external review. An expedited external review must be available if there is (1) an adverse benefit determination concerning a medical condition that would seriously jeopardize the claimant’s life, health, or ability to regain maximum function; or (2) a final adverse benefit determination relating to a claimant receiving emergency services from a facility that has not discharged the claimant where the determination relates to an admission, availability of care, continued stay, or any item or service.
- Require a preliminary assessment of a request for external claims review within five days of receipt, or immediately in the case of an expedited external review request, as well as procedures for forwarding the request for external review to the IRO.
- Require the inclusion in each IRO contract of provisions relating to the IRO’s obligation to (1) notify a claimant about the right to submit additional information to the IRO, (2) not defer to determinations made during the group health plan’s internal claims review process, and (3) reach a decision within 45 days after receiving a request for standard external review or, in the case of a request for expedited external review, as expeditiously as necessary given the medical circumstances and in no event more than 72 hours after receiving the request.
- Provide for the payment of any claim that is decided favorably by the IRO, even if the plan disagrees with the IRO decision.
- Allow a claimant to request an external claims review within four months after an adverse benefit determination.
The Departments also have published model notices that group health plans can use to notify a claimant of an adverse benefit determination, a final internal adverse benefit determination, and a final external review decision.