As reported in Reinhart's August 25, 2010, Health Care Reform: Internal Claims and Appeals and External Review Process e-alert, PPACA adds section 2719 to the Public Health Service Act (PHSA), providing new internal claims and appeals and external review processes. This section applies to nongrandfathered health plans as of the first day of the first plan year beginning on or after September 23, 2010. On July 23, 2010, HHS, the Department of Labor (DOL), and the Department of the Treasury (the Departments) jointly issued regulations regarding the new internal claims and appeals and external review processes.
In general, group health plans (and health insurance issuers offering group health insurance coverage) must comply with all the existing requirements for internal claims and appeals, as described in the Employee Retirement Income Security Act claims procedure regulations. The e-alert cited above summarizes six new requirements added by the PPACA regulations.
On September 20, 2010, the Departments issued Technical Release No. 2010-02 which noted that since publication of the regulations regarding the new internal claims and appeals process, some plans and issuers have stated they did not anticipate some or all of the additional standards and need more time to change plan or policy procedures and to modify computer systems in order to be compliant.
Technical Release 2010-02 sets forth an enforcement grace period until July 1, 2011, with respect to some of the additional standards in the regulations in order to provide more time for plans and issuers to be fully compliant. Specifically, with respect to requirements number two (regarding the timeframe for making urgent care claims decisions), number five (regarding providing notices in a culturally and linguistically appropriate manner, and requiring broader content and specificity in notices), and number six (regarding substantial compliance), the DOL and the IRS will not take any enforcement action against a group health plan, and HHS will not take any enforcement action, during the grace period, against a self-funded nonfederal governmental health plan, that is working in good faith to implement the additional standards but does not yet have them in place. Similarly, HHS is encouraging States to provide similar grace periods with respect to issuers.