Self-Funded Health Plans Get Claims Review Guidance

New guidance from the three major federal agencies responsible for implementing the Patient Protection Act provides that plans and insurers that are not subject to an applicable state process for external review of adverse claims determinations must implement such a process. The IRS, and the Departments of the Labor and Health and Human Services are releasing the guidance in the August 26 Federal Register. This relase also includes model notices that plans and health insurers may use to satisfy the disclosure requirements of related interim final regulations for effective claims review and appeals processes that the DOL posts on its website.

The internal and external adverse claims review and appeals requirements are intended to protect consumers’ rights to a fair hearing and determination of their health insurance claims.

In July, interim final regulations provided guidance requiring group health plans and insurers to comply with existing DOL claims procedure regulations and imposing specified additional standards for internal claims review and appeals. This new release from the DOL’s Employee Benefits Secuity Administration (EBSA), Technical Release No. 2010-01, provides an interim enforcement safe harbor for non-grandfathered (that is, plans that are not excepted from compliance with the Affordable Care Act requirements) self-insured group health plans that, because they are not subject to a state external review process, are therefore subject to the federal review process. (In the case of an insured group health plan, the insurer has primary responsibility to comply with the July 2010 interim final regulations.)

This interim enforcement safe harbor applies for plan years beginning on or after Sept. 23, 2010, until it is superseded by pending future guidance on the federal external review process. While this interim enforcement safe harbor is in effect, the DOL and the IRS specify that they will not take any enforcement action against a self-insured group health plan that complies with either the procedures outlined in Technical Release 2010-01 or voluntarily complies with its state external review processes: The procedures in Technical Release 2010-01 are based on the Uniform Health Carrier External Review Model Act developed by the National Association of Insurance Commissioners (NAIC Model Act) on July 23, 2010.

HHS says that before July 1, 2011, it will issue further guidance about which state external review laws have been determined to satisfy the minimum standards of the NAIC Model Act.

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