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  • Final Regulations Issued for Claims Appeals

    The Obama Administration released interim final regulations designed to create a system of checks and balances for the appeal process for health claims.

    Under the Patient Protection and Affordable Care Act (PPACA), the interim final rule requires group health plans and insurers to establish a comprehensive appeals process for patients who appeal decisions on coverage, services and claim payments. The interim final regulations apply to self-funded health plans, but not to grandfathered plans under the PPACA.

    The Departments of Health and Human Services, Labor and the Treasury issued the interim final rule, which will take effect on Sept. 21, 2010.

    Health plans and insurers that are subjected to the regulations are required to establish an internal appeals process that:

    • Allows consumers to appeal when a health plan denies a claim for a covered service or rescinds coverage;

    • Gives consumers detailed information about the grounds for the denial of claims or coverage;

    • Requires plans to notify consumers about their right to appeal and instructs them on how to begin the appeals process;

    • Ensures a full and fair review of the denial; and

    • Provides consumers with an expedited appeals process in urgent cases.

    Under the regulations, a patient can have the case reviewed by an independent reviewer  if the appeal is denied by the health plan or insurer. 

    Most states currently have external appeals handled by an independent agency, however, governing the process varies from state to state.  The interim final rule encourages a federal standard for external reviews.  For external appeals, federal regulators are encouraging states to adopt the guidelines created by the National Association of Insurance Commissioners. The interim final rule calls for states to implement the NAIC standards before July 1, 2011. The NAIC rules require:

    • External review of plan decisions to deny coverage for care based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit.

    • Clear information for consumers about their right to both internal and external appeals – both in the standard plan materials and at the time the company denies a claim.

    • Expedited access to external review in some cases – including emergency situations or cases where their health plan did not follow the rules in the internal appeal.

    • Health plans must pay the cost of the external appeal under State law, and States may not require consumers to pay more than a nominal fee.

    • Review by an independent body assigned by the State. The State must also ensure that the reviewers meet certain standards, keep written records, and are not affected by conflicts of interest.

    • Emergency processes for urgent claims, and a process for experimental or investigational treatment.

    • Final decisions must be binding so, if the consumer wins, the health plan is expected to pay for the benefit that was previously denied.

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