Claims Procedures - payment of claims

[Guest SCUDDESLER]

The DOL claims procedure regulations specify certain time frames for processing claims, appealing claims and making decisions on appeal. With respect to a self-insured, self-administered, single-employer health plan, do you think that actual payment of a claim is part of this process or may a plan comply with the regulations when deciding if a claim is covered under the plan and then take whatever time it wants to actually pay the claim?

[Guest chloe]

The DOL issued a set of Q&As. Q&A A-10 addresses this issue as follows:

Q: "Do the time frames in these rules govern the time within which claims must be paid?"

A: "No. While the regulation establishes time frames within which claims must be decided, the regulation does not address the periods within which payments that have been granted must be actually paid or services that have been approved must be actually rendered. Failure to provide services or benefit payments within reasonable periods of time following plan approval, however, may present fiduciary responsibility issues under Part 4 of title I of ERISA."

For urgent, concurrent or pre-service determinations, the regulation only requires that the claimant be "notified" of the approval or denial within the timeframe. But it does not provide timeframes for actually paying an approved claim. Still, as the Q&A states, payment must be made within a reasonable time, but that is not defined. For post-service, the timeframe only applies to notification of a denial.

For appeals, the timeframes for all types of appeals (urgent, concurrent, pre and post) apply to notice of approvals and denials. But they don't apply to payment.