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Guest Article
(From the August 2, 2010 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)
Effective for plan years beginning on and after September 23, 2010, non-grandfathered group health plans and group health issuers will be providing enhanced internal claims review procedures, and claimants with adverse internal decisions will be entitled to an external review by an independent review organization under either a State or Federal process.
On July 23, 2010, the Departments of Labor, Treasury, and Health and Human Services issued interim final regulations to implement the new procedures required under the Patient Protection and Affordable Care Act. Although the new requirements are generally effective for plan years beginning on and after September 23, 2010, some transition is provided for the establishment of state external review processes. The Departments request comments on the new rules by September 21, 2010.
Internal Review Process: ERISA Claims Procedures Amplified
The new standard amplifies upon the existing ERISA claims procedures under Labor Regulation § 2560.503-1. Plans are required to comply with the current ERISA procedures, modified with regard to:
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The new rule explicitly requires the plan or issuer to provide continued coverage pending the outcome of the appeal. As under the current regulations, advance notice and an opportunity for an advance review must be provided before benefits for an ongoing course of treatment can be reduced or terminated.
State Standards for External Review: NAIC Model Act and Some Transition
If a health insurance issuer is bound by a State external review process that includes the consumer protections of the National Association of Insurance Commissioners (NAIC) Uniform Model Act, then the issuer is bound to comply with that State external review process. Similarly, if a self-insured plan is bound by a State external review process meeting the NAIC requirements (i.e., where ERISA does not preempt that process), the plan is required to comply with it. Otherwise, the plan or issuer is required to comply with the Federal review process.
Among other requirements, a State external review process must at least include.
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A transition period is provided until the plan year beginning on or after July 1, 2011, by which existing State external review processes will be deemed to comply with the minimum requirements. Therefore, as a result, for plan years beginning before July 1, 2011, where a plan or issuer is bound to use a State's external review process, the process will be deemed to satisfy the minimum standards of the regulation. Where the State has no external claims review, the Federal process will apply. For plan years beginning on or after July 1, 2011, unless the Department of Health and Human Services certifies that the State external review process meets the required standards, plans and issuers will be bound to use the Federal external review process.
Federal Standards for External Review: Yet to Be Released
The Federal external review standards are yet to be released, but the new rule states they will be similar to the NAIC Uniform Model Act.
More Information
More information on the new requirements is available on the Department of Labor Web, including a Fact Sheet, News Release, and the NAIC Model Act.
The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations.
If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955. Copyright 2010, Deloitte. |
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