Benefits Industry News

The Obama Administration released interim final regulations aimed at creating a system of checks and balances for the internal and external appeals processes of health claims.

Governed by the Patient Protection and Affordable Care Act, the interim final rule requires group health plans and insurers to establish a comprehensive appeals process for patients who appeal decisions on coverage, services and claim payments. The interim final regulations apply to self-funded health plans, but not to grandfathered plans under the PPACA.

The Departments of Health and Human Services, Labor and the Treasury issued the interim final rule, which will take effect on Sept. 21, 2010.

Health plans and insurers that are subjected to the regulations are required to establish an internal appeals process that:

• Allows consumers to appeal when a health plan denies a claim for a covered service or rescinds coverage;

• Gives consumers detailed information about the grounds for the denial of claims or coverage;

• Requires plans to notify consumers about their right to appeal and instructs them on how to begin the appeals process;

• Ensures a full and fair review of the denial; and

• Provides consumers with an expedited appeals process in urgent cases.

If a health plan or insurer denies the appeals case, the patient, under the regulations, can present his or her case to an independent reviewer not affiliated with the health plan or insurer.

Most states provide an external appeals process in which a second set of eyes reviews the case. However, state laws on external appeals of health claims can vary greatly depending on the state. As a result, the interim final rule calls for a federal standard for external reviews of claim appeals cases.

For external appeals, federal regulators are encouraging states to adopt the guidelines created by the National Association of Insurance Commissioners. The interim final rule calls for states to implement the NAIC standards before July 1, 2011. The NAIC rules require:

• External review of plan decisions to deny coverage for care based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit.

• Clear information for consumers about their right to both internal and external appeals – both in the standard plan materials and at the time the company denies a claim.

• Expedited access to external review in some cases – including emergency situations or cases where their health plan did not follow the rules in the internal appeal.

• Health plans must pay the cost of the external appeal under State law, and States may not require consumers to pay more than a nominal fee.

• Review by an independent body assigned by the State. The State must also ensure that the reviewers meet certain standards, keep written records, and are not affected by conflicts of interest.

• Emergency processes for urgent claims, and a process for experimental or investigational treatment.

• Final decisions must be binding so, if the consumer wins, the health plan is expected to pay for the benefit that was previously denied.

Source: Employee Benefits News article used by permission

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Specifics to Self-Insurance

The Patient Protection and Affordable Care Act (PPACA) of 2010

An Overview of the Health Care Reform Bill as it relates to the Self Insurance Industry.

The Patient Protection and Affordable Care Act of 2010 will bring about direct impacts on the self-insurance industry. The below bullet points summarize some of the implementations specific to self-funded health care plans.

The following changes are effective for all plans as they renew on September 23, 2010 and thereafter:

A.)Coverage of Emergency Services: All non-grandfathered self insured health plans (SIHP) must cover emergency services without the need for prior authorization; if services are out-of-network, cost sharing is the same as in-network.

B.)Restricted annual limits for essential benefits.

C.)Prohibition of Lifetime Limits: SIHP are prohibited from establishing lifetime limits on the dollar value of benefits. Exclusion: SIHP may place restrictions on non-essential health benefits.

D.)Prohibition of Pre-existing conditions: SIHP may not impose any pre-existing condition exclusions on enrollees under age 19. Effective January 1, 2014, all SIHP are prohibited from imposing pre-existing exclusions on any enrollee.

E.)Prohibition of rescinding coverage from any employee beneficiary except in instance of fraud or misrepresentation.

F.)Requires hospitals to publicize a list of standard charges for the items and services they provide.

G.)States provided with grants to establish Medical Reimbursement Data Centers to collect reimbursement information and to make information available to all.

H)Employers are required to disclose costs of employer-sponsored health coverage on W-2.

I)Requires that non-taxable reimbursements from Health Savings Accounts (HSA’s) and Health Reimbursement Accounts (HRA’s) are limited to prescribed medicine or insulin.

J)Extension of Dependent Coverage: All SIHP that cover dependent children must extend coverage to their 26th birthday. Prior to 2014, grandfathered SIHP are only required to offer coverage to dependent children without access to a plan through their own employer. Marriage or student status is not a factor in dependent eligibility. Plans are not required to cover a child of a child dependent.

Additional changes for SIHP, beginning in 2014:

· Prohibited from establishing rules for eligibility based upon the health status, claims experience, medical history, genetic info, disability or evidence of insurability.

· Permits employers to vary insurance premiums by as much as 30% for employee participation in certain health promotion and disease promotion programs. Certain requirements apply.

· Prohibited from maintaining waiting periods longer than 90 days

· Health Information Technology Standards: All SIHP will have to adopt procedures that comply with Federal procedures.

· Cost-sharing: All SIHP will require cost sharing to be limited to the maximum out of pocket expenses allowable for High Deductible Health Plans.

For additional information, click here to read a Summary of the PPACA.