On September 20, 2010, the US Department of Labor (“DOL”) issued Technical Release 2010-02 (“Technical Release”) which provides an enforcement grace period until July 1, 2011 for some of the new internal claims and appeal provisions that were mandated by the interim final regulations. The enforcement grace period is being provided in order to give plans and issuers more time to implement procedures and to update their computer systems for compliance.
On July 23, 2010, the Departments of Labor, Treasury and Health and Human Services issued interim final regulations implementing Section 2719 of The Patient Protection and Affordable Care Act (the “Affordable Care Act”), which established standards for plans and issuers regarding internal health claim reviews and the requirement for an external independent claim review process. These interim final regulations, which apply to non-grandfathered plans, impose additional standards for internal claims and appeals processes, including:
- expanding the scope of an adverse benefit determination to include rescissions,
- reducing the amount of time that a plan or issuer has to notify a claimant of a benefit determination (whether adverse or not) related to an urgent care claim from 72 hours to no later than 24 hours after receipt of the claim,
- clarifying that a “full and fair review” requires the plan or issuer to provide the claimant (free of charge) with copies of any new or additional evidence relied upon, a rationale for any denial and an opportunity for the claimant to respond,
- indicating that claims adjudicators and medical experts cannot be selected, retained, paid, promoted, etc. based on the likelihood they will support a denial,
- requiring “culturally and linguistically” appropriate notices to be prepared in the appropriate non-English language,
- requiring additional content in the notices, including denial codes and appeal information, and
- confirming that a failure to strictly adhere to all requirements will allow the claimant to initiate an external review or remedies under ERISA. Substantial compliance with the internal and external review process is not enough.
Because some plans and issuers have indicated that they need more time to comply, the Technical Release indicates that the DOL and the IRS will not take any enforcement actions during the grace period against a group health plan that is working in good faith to comply with respect to: urgent claim decisions in 24 hours, notices in a culturally and linguistically appropriate manner, additional notice content requirements and substantial compliance.