Several months ago, I posted an article describing the new federal minimum claim standards, including the availability of external appeals. These new standards were included in the PPACA and published as an interim final rule on July 23, 2010 (the "Interim Rule"). At the time, I referred to these rules as enhancing an important set of rights for enrollees and for providers assisting their patients with coverage disputes. For a more complete list of the changes required by the PPACA, see that earlier post, see link here.
On June 24th, 2011, amendments to the Interim Rule were published by HHS, the Department of Labor and the Treasury (the “Amendments”). These Amendments incorporate public comments received in the wake of the Interim Rule. Unfortunately they weaken claimant rights and delay or undermine many of the measures intended to simplify the appeal process. The changes affect expedited coverage determinations, the information included in notices of coverage determinations, rights to external appeal and the procedures governing external appeal.
Expedited Coverage Determinations: The Interim Rule required that qualified requests for expedited coverage determinations be responded to “as soon as possible taking into account the medical exigencies but not later than 24 hours after the receipt of a claim.” As modified by the Amendment, the expedited determinations must be made within 72 hours – the time frame required for expedited determinations before PPACA.
Specific Information Required for Notices of Coverage Determinations: The Interim Rule set requirements for the content of the Notice of Coverage Determination so the notices were “sufficient to identify the claim involved.” Among the required data, the notice had to include the diagnosis code and treatment code and an explanation of the meaning of these codes.
Responding to written objections about the requirement to include diagnosis and treatment codes in notices of coverage determination, including concerns that the inclusion of these codes and explanations could jeopardize patient privacy, interfere with the physician-patient relationship and increase costs, the Amendment revised this requirement. As revised, Notices of Coverage Determination must inform claimants that they have the right to request diagnosis and treatment codes, but do not need to contain the codes. In addition, the Amendment states that a claimant’s request for the diagnosis and / or treatment code is not considered “in itself, to be a request for (and therefore trigger the start of) an internal appeal or external review.”[1] This could create an additional step in the claim process as well as a trap for those unfamiliar with the rules and time limitations for pursuing an appeal.
Deemed Exhaustion of Internal Claims and Appeals Processes. The Interim Rule created an exception to the general rule that a claimant must exhaust a plan’s or insurer’s internal appeal procedures before pursuing external review or bring a claim in court. The Interim Rule said that if a plan or issuer fails to “strictly adhere” to the requirements for notices and claim processes, this failure entitled the claimant to immediately abandon the internal processes and file an external appeal or court claim. If this happened, the reviewing court or external reviewer would review the claim “de novo” without giving any consideration or deference to the plan/insurer’s initial decision or the reasons behind it.
Commenters protested that this standard of “strict adherence” to the requirements for claims and appeal processes was too strict. They asked that the standard be “substantial compliance.” Again, in response to these comments, the regulations were amended. As amended, the standard remains “strict compliance”, but allows an exception for noncompliance due to errors that are:
- de minimis;
- non prejudicial;
- due to good cause or beyond the plan / insurer’s control;
- in the context of an “ongoing good faith exchange of information;” and
- not indicative of a pattern or practice of non compliance.
Claimants are entitled to make a written request for an explanation of the basis for the plan / insurer’s claim that its error met this standard. So, with the changes, a claimant will seek an external remedy due to the plan / insurer’s non compliance with the claim and appeal requirements, the plan / issuer will claim that the error fits within the exception and this issue will have to be decided before the claimant can proceed. This change introduces another step into the claimant’s process and introduces new issues into an already complex appeal process.
Culturally and Linguistically Appropriate Notices: On a positive note, the Amendment simplified the requirement in the rules that plan communications with members be culturally and linguistically appropriate. If residents speaking a language other than English comprise more a threshold percentage of the population in a plan’s membership / insurer’s service area, then the PPACA requires member communications to be made available in that other language. Plans / Insurers were required to have these other language member materials printed and available.
The Interim Rule had adopted different thresholds, depending whether the product was an individual insurance policy, a small group or a large group. Further, once a member asked for a foreign language version of the member materials, the plan / insurer was required to record that request and send all future communications in that same foreign language.
As amended, a single 10% threshold applies for all group or individual products. Further, the threshold will be determined using reports published by the US Census Bureau. If more than 10% of the population in the county speaks a foreign language, the threshold is met. The plan / issuer is required to include a one sentence statement in member materials in the relevant foreign language informing members of the availability of the materials in their language. Further, plans / insurers are not required to track who has previously asked for foreign language materials to ensure future member communications are sent in the same foreign language.
External Review. The PPACA established standards for state external review laws. The Interim Rule provided that in states with external review laws, these laws would be deemed to meet the federal standards until July 1, 2011. If the state’s laws were non compliant, then plans / issuers operating in the state during plan years on or after July 1, 2011 would have to follow the federal external review process. As amended, states have until December 31, 2011 to ensure their external review processes meet federal requirements.
The Amendment also narrowed the range of issues that could be decided by external review for some period of time. The Interim Rule allowed external review for any adverse benefit determination except member eligibility issues. As amended, the Federal external review standards are limited to issues involving medical judgment (such as: medical necessity, appropriateness or effectiveness of a procedure, health care setting or level of care and whether a procedure is experimental or investigational) and rescissions of coverage. The Amendment suspended requiring the more broad range of review to “give the marketplace time to adjust to providing external review” and to give those implementing the federal external review standards more time to find and accredit IROs to make these non medical decisions.
The narrower scope of external appeals is expected to last until January 1, 2014. During this period, if a claim is subject to external review, the process of determining which issues can be settled solely by medical judgment and which involve legal or other issues will complicate the process and deter claimants.
Link to July 23, 2010 Federal Register Interim Rule
Link to June 24, 2011 Federal Register Amendment
[1] Group Health Plans and Health Insurance Issuers: Rules Relating to Internal Claims and Appeals and External Review Processes, Amendment to Interim Final Rules with Request for Comments, 76 Fed. Reg. 37208, 37213 (June 24, 2011).
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