PPACA Internal Claims Procedures for Group Health Plans Are Simplified

• Rescission of Coverage: A rescission of coverage must be treated as an "adverse benefit determination" eligible for review under the internal claims and appeals procedures.
• Urgent Care: Urgent care claims must be decided within 24 hours (instead of the previous 72-hours) after the plan's receipt of the claim.
• New Evidence: Additional procedures must be implemented when new or additional evidence is considered, or when a new or additional rationale is the basis for a decision.
• Notice Format: Notices must be given in a "culturally and linguistically appropriate" manner.
• Notice Content: Additional content must be included in notices of adverse benefit determination (e.g., the denial code, discussion of the decision, contact information for any health insurance consumer assistance ombudsman, etc.).
• Deemed Exhaustion: The internal claims review process is deemed exhausted — and the claimant permitted to proceed to the external claims review — if the plan fails to strictly adhere to the enhanced PPACA requirements, even if the plan has substantially complied.

• Urgent Care by permitting plans and issuers to follow the original rule in the ERISA claims procedures, which requires a decision regarding pre-service urgent care claims as soon as possible, consistent with the medical exigencies involved, but no later than 72 hours after the plan receives the claim. The 72-hour timeframe remains an outside limit and, in cases where the decision must be made more quickly based on the medical exigencies, the requirement remains that the decision be made sooner than 72 hours.
• Notice Format by changing the threshold and manner for delivering notices in non-English languages. The interim regulations required that non-English notices be provided if the number of participants literate only in the same non-English language reaches a set threshold; for plans with fewer than 100 participants the threshold was 25 percent of participants, while for larger plans the threshold was the lesser of 10 percent or 500 participants. The amendment applies a threshold that looks to the population of the county in which the participant resides. The threshold is set at 10 percent. If 10 percent or more of the population residing in the claimant's county (as determined based on data published by the United States Census Bureau) is literate only in the same non-English language, notices sent by a plan or issuer to addresses in that county must include a sentence in the relevant non-English language about the availability of language services. The plan or issuer must also provide a customer assistance process (such as a telephone hotline) with oral language services in the non-English language and provide written notices in the non-English language upon request.
• Notice Content by eliminating the requirement to automatically provide diagnosis and treatment codes as part of a notice of adverse benefit determination (or final internal adverse benefit determination). It instead requires that notice be given of the opportunity to request diagnosis and treatment codes (and their meanings) in all notices of adverse benefit determination (and notices of final internal adverse benefit determination), and that the diagnosis and treatment code information be given on request. Also, the plan or issuer may not consider such a request as a request for (and, therefore, trigger the start of) an internal appeal or external review.
• Deemed Exhaustion by providing a de minimis exception to the rule that noncompliance results in a deemed denial of the claim, which would allow the claimant to proceed to the external claims review. Under the amendment, no violation of the procedural rules will result in a deemed exhaustion if the violation was:
  1. De minimis,
  2. Non-prejudicial,
  3. Attributable to good cause or matters beyond the plan's or issuer's control,
  4. In the context of an ongoing good-faith exchange of information, and
  5. Not reflective of a pattern or practice of non-compliance.

  In addition, the claimant would be entitled, if he or she makes a written request, to an explanation of the plan's or issuer's basis for asserting that it meets this de minimis standard — so the claimant can make an informed judgment about whether to seek immediate review. (If the external reviewer/court rejects the claimant's request for immediate review on the basis that the plan met the de minimis standard, the claimant would have the right to resubmit and pursue the internal appeal of the claim.)

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, Erinn Madden 202.220.2692, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955.

Copyright 2011, Deloitte.

BenefitsLink is an independent national employee benefits information provider, not formally affiliated with the firms and companies who kindly provide much of the content and advertisements published on this Web site, including the article shown above.