However, the Departments of Treasury, Labor, and Health and Human Services also have issued regulations on a new external review process. 75 Fed. Reg. 43,330 (July 23, 2010). These new requirements apply to both individual and group health plans (insured and self-funded), but do not apply to grandfathered plans.
What claims are subject to external review?
Generally, the same claims that are subject to the new claims and appeals rules will be subject to external review, including “claims for benefits” that currently are required to be decided under the Department of Labor claims regulation and determinations regarding rescissions. The regulations do appear to differentiate between state and federal external review (see below) in that they specify that state review only applies to decisions involving medical necessity, health care settings, and level of care (it is unclear if the federal review would be broader).
What type of external review is available to my plan?
Plans that already are subject to a state external review program that meets certain standards should use state external review. Other plans must follow a new federal external review procedure. Generally, insured plans are subject to state external review (so would continue with the state program), and self-funded plans will look to the federal program. To qualify, the state program must meet certain standards based on the NAIC Uniform Model Act, but the regulations include a transition rule that says that, for plan years beginning before 7/1/11, any applicable state external review process will be deemed to meet the requirements above (which gives states more time to come into full compliance).
What is required under federal external review?
The DOL recently issued Technical Release 2010-01, which provides a temporary enforcement safe harbor for plans subject to the federal external review. The Technical Release can be accessed at http://www.dol.gov/ebsa/pdf/ACATechnicalRelease2010-01.pdf. This safe harbor applies until DOL issues guidance superseding the Technical Release.
Under the safe harbor, a plan must either: (1) voluntarily comply with a state external review process; or (2) comply with the procedures for federal review in the Technical Release.
The Technical Release requires plans to:
- allow claimants to file a request for external review within 4 months of receiving an adverse benefit determination;
- complete a Preliminary Review of a claimant’s external review request within 5 business days of the plan’s receipt of the request, to determine if the claimant was covered by the plan at the time the service was provided or requested, whether the claim is eligible for federal external review, and if the claimant has exhausted all internal claims and appeals requirements; and
- issue a written notice to the claimant regarding eligibility for external review within one business day after completing the Preliminary Review.
Must plans seek their own external reviewer, or will the federal government handle external review?
Health plans using the federal external review program must contract with at least three independent review organizations (IROs) accredited by an organization called URAC (or another nationally-recognized accrediting organization) to which external reviews will be sent on a rotating or random basis. The Technical Release sets out what must be included in the contracts with the IROs.
What procedures must the federal IRO follow?
The IRO must decide the appeal de novo with no deference to the plan's decision and use "legal experts" where appropriate. The IRO may consider -- in addition to the plan's claim file -- the recommendation of the claimant's treating physician, any appropriate practice guidelines, the opinion of the IRO's clinical reviewers; and the terms of the plan document. The IRO must provide written notice of its external review decision within 45 days of receipt of the request. The notice must include the basis for its decision and a statement that the decision is binding (subject to the claimant's right to sue and other remedies that may be available to the claimant or the plan). The Technical Release includes expedited timeframes for urgent review.
Got a health-care reform question? You can ask YOUR health-care reform legislation question online at http://www.surveymonkey.com/s/second_opinions
You can find a handy list of Key Provisions of the Patient Protection and Affordable Care Act and their effective dates at http://www.groom.com/HCR-Chart.html
Christy Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in Washington, D.C. She is involved in all aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA privacy, COBRA, and Medicare. She represents employers designing health plans as well as insurers designing new products. Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care reform legislation.
Brigen Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the firm's Policy and Legislation group. He counsels plan sponsors, insurers, and other financial institutions regarding health and welfare, executive compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted health-reform legislation.
PLEASE NOTE: This feature is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
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