The Internal Revenue Service (IRS), Department of Labor (DOL), and Department of Health and Human Services (HHS) modified the review process for claims for benefits under non-grandfathered health plans once again.1 The changes offer plan sponsors relief from some of the more onerous provisions of previous guidance, but also further complicate the review process.

Here are the top ten things you need to know about the recent modifications.

  1. Timing. Except as noted below, the changes apply to calendar year plans beginning January 1, 2012.
  2. Urgent care claims. The time frame for notifying claimants of urgent care benefit determinations is, once again, not later than 72 hours (rather than 24 hours) – but only if the plan defers to the attending provider's determination that a claim is for urgent care.
  3. Diagnosis and treatment codes. Diagnosis and treatment codes and their meanings no longer have to be provided automatically in a notice of adverse benefit determination or final internal adverse benefit determination. Instead, these notices must include a statement that claimants can request this information – and plans must provide it upon request.
  4. Deemed exhaustion and strict compliance. Certain de minimis variations from required internal review procedures will no longer result in the internal review process being deemed exhausted. (Deemed exhaustion allows the claimant to proceed beyond the internal review process.) Upon request, the plan must provide a claimant with a written explanation of why it meets the de minimis exception. If a claimant’s request for immediate outside review is rejected because the plan met the de minimis exception, the plan must notify the claimant that he or she may resubmit the claim and complete the internal review process.
  5. Culturally and linguistically appropriate notices. If 10% or more of the population residing in a claimant’s county speaks only the same non-English language, all notices must include a statement, in the relevant non-English language, that customer assistance and written notices are available in the applicable non-English language upon request. Tracking which individual claimants require non-English notices or other accommodations is no longer necessary.
  6. Scope of claims subject to federal external review. Claims that are initiated after September 19, 2011, are eligible for external review by an independent review organization (IRO) only if the claims involve medical judgment or a rescission of coverage.
  7. Binding IRO determinations. Once a final decision has been rendered by an IRO, a plan must provide benefits to the claimant in accordance with the decision, regardless of whether the plan seeks judicial review of the decision, and the plan must continue to provide the benefits until a judicial decision overturns the IRO’s determination. This “clarification” appears to be retroactively effective to the fall of 2010.
  8. IRO changes applicable to ERISA plans. Plans are not immediately required to contract with at least three IROs to meet the external review safe harbor. Self-insured ERISA plans can meet the safe harbor by contracting with at least two IROs by January 1, 2012 and at least three IROs by July 1, 2012.
  9. State external process changes. There is a transition period until January 1, 2012, for implementation of state external review processes meeting the requirements of previous guidance. In addition, states may operate external review processes under standards similar to the process contained in the NAIC Uniform Model Act until January 1, 2014.
  10. Three new models. The model notices of adverse benefit determination, final internal adverse benefit determination, and final external review decision have been updated as of June 22, 2011, consistent with these newest changes.