Federal External Review Processes Guidance
Non-grandfathered self-insured group health plans now have guidance regarding the new requirements for federal external reviews of adverse benefit determinations. On August 26, 2010, the Departments of the Treasury, Labor, and Health and Human Services published a notice announcing the issuance of the Employee Benefits Security Administration's Technical Release 2010-01 (the "Technical Release"). The Technical Release announces interim procedures that self-insured group health plans must implement for plan years beginning on or after September 23, 2010. The interim procedures will remain in effect until superseded by to-be-issued finalized guidance.
The Technical Release creates a safe harbor for non-grandfathered self-insured group health plans for the period that its interim procedures for external reviews are in effect. The safe harbor provides plans with two options. Plans either: (1) may comply with the terms of the Technical Release, or (2) may voluntarily comply with the State external review process that would not otherwise be applicable to a self-insured plan. The Internal Revenue Service and the Department of Labor will not seek enforcement action or excise tax liabilities against plans that take advantage of this safe harbor.
The Technical Release outlines the new compliance requirements for both standard federal external review processes and expedited federal external review processes. Among the primary requirements are the following:
For standard external review requests:
- Claimants must be given four months from the date of an adverse benefit determination or a final internal adverse benefit determination to request an external review;
- Plans must complete a preliminary review within five business days of receiving a request for an external review to determine whether the claim is eligible for external review;
- Plans must notify the claimant within one business day after the preliminary review is completed regarding whether the claim is eligible for external review or whether more information is required to make such a determination;
- If the claim is eligible for external review, plans must forward the claim to an independent review organization (an "IRO") and the IRO has 45 days to complete the review and notify the claimant and the plan of its decision;
- If the IRO receives additional information from the claimant, the IRO must forward the information within one business day to the plan. The plan may reconsider its adverse benefit determination or final internal adverse benefit determination based upon such information; however, the plan's reconsideration must not delay the IRO's external review. If the plan reverses its prior determination and provides coverage or payment for the claim, the plan must notify the IRO, and the IRO then will end its external review; and
- Plans must comply with the decisions of an IRO and provide coverage or payment in the event an IRO reverses the adverse benefit determination or internal adverse benefit determination.
For expedited external review requests, an expedited external review must be allowed if:
- In the case of an adverse benefit determination, the determination involves a medical condition of the claimant for which the timeframe for completing an expedited internal appeal under the interim final regulations would seriously jeopardize the life or health of the claimant or would jeopardize the claimant's ability to regain maximum function; or
- In the case of a final internal adverse benefit determination, the claimant has a medical condition where the timeframe for completing a standard external review would seriously jeopardize the life or health of the claimant, or would jeopardize the claimant's ability to regain maximum function, or the determination concerns an admission, availability of care, continued stay, or health care item or service for which the claimant received emergency services, but has not been discharged from the facility.
In addition, expedited external review requests must comply with the following:
- Plans must complete the preliminary review immediately upon receipt of the request and, if the claim is eligible for external review, must immediately forward the claim and all associated documentation to an IRO; and
- The IRO must complete its review and send notice of its decision as soon as possible, but in no event more than 72 hours after the IRO had received the request for the review.
In addition to the above outlined requirements, the Technical Release requires non-grandfathered self-insured plans that are relying upon the safe harbor to contract with at least three different IROs for purposes of processing of external review requests. Such plans also must rotate (or randomly select, or assign by some other unbiased means) their external review requests among the IROs. The Technical Release also outlines provisions that must be included in the contracts between plans and IROs, including, but not limited to, the contents of notifications sent from IROs to plans and claimants.
Non-grandfathered self-insured group health plans will have to decide whether to take advantage of the safe harbor presented in the Technical Release. Plans that proceed with the safe harbor must choose whether to comply with the requirements of the Technical Release or comply with an applicable State external review process. Whatever path is chosen, plans will need to act quickly to identify, document, and implement these new processes in time for plan years beginning on or after September 23, 2010.
The following internal and external appeal process model notices were also issued by the Departments of the Treasury, Labor, and Health and Human Services:
- Model Notice of Adverse Benefit Determination
- Model Notice of Final Internal Adverse Benefit Determination
- Model Notice of Final External Review Decision
These model notices will assist plans and issuers in meeting the notice requirements set forth in the 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 published on July 23, 2010.