Claims Appeals Process

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So what’s included in Sec. 1001(5) of the Affordable Care Act, concerning additional claims appeals procedures?

A group health plan and a health insurer must implement an effective process for appeals of coverage determinations and claims. This appeals process must include, at a minimum, the following:

• an established internal claims appeal process;


• a notice to participants, in a “culturally and linguistically appropriate manner,” of available internal and external appeals processes, including the availability of assistance with the appeals processes; and


• a provision allowing an enrollee to review his or her file, to present evidence and testimony as part of the appeals process, and to receive continued coverage during the appeals process.

The meaning of “culturally and linguistically appropriate manner” will have to be defined in regulations.

Use established processes. Until the Department of Labor issues standards for an appeals process, plans must provide claims and appeals processes required in existing DOL regulations.

Health insurers offering individual coverage and any issuers not subject to existing DOL claims appeals rules may initially use claims and appeals procedures under any other applicable law, such as individual state insurance requirements. Insurers are required to update these procedures when the HHS issues new standards.

External review. Group health plans and insurers have two options regarding the implementation of external reviews:

(1)      Plans and insurers must comply with State external review requirements that are binding and at a minimum include the consumer protections in the Uniform External Review Model Act from the National Association of Insurance Commissioners; or

(2)      If state requirements do not meet the above minimums or if the plan is self-funded and not subject to state insurance regulations, then the plan must implement an external review process that is similar to that in the Uniform External Review Model Act and that meets standards established by the Department of Health and Human Services.

According to America's Health Insurance Plans (AHIP), all the states and the District of Columbia have a required external claims review process, except Alabama, Idaho, Mississippi, Nebraska, South Dakota, and Wyoming (http://www.healthclaimappeals.org/state-appeal-process.html).

The Secretary of HHS has the authority to determine whether the external review process of a plan or insurer, that is in operation as of the date of enactment is in compliance.

Effective date. The provision is effective for plan years beginning on or after Sept. 23, 2010.

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