External appeals under health plans-if you are in a self-insured employer plan know your rights before it is too late
For many years under ERISA employer plans have been required to provide standard appeal procedures for denied claims. In some cases, final resolution of disputed claims is delegated to the plan administrator, such as an insurance company. Some employers retain the right to be the final arbiter of claim appeals.
Under the Affordable Care Act plan participants are entitled to an independent external review of a denied claim. While this right was effective January 1, 2011 for most plans, large employers sponsoring a self-insured plan received a reprieve on the effective date for some aspects of the process. Most notably, there is no obligation to notify plan participants of the right to an external appeal of a denied claim until January 1, 2012. However, the requirement to provide such an appeal is in effect.
This process for external claim appeal does not apply to health plans in which only retirees participate or to employer self-insured plans that remain grandfathered under PPACA.
Kaiser Health News has identified an interesting Catch-22. Plan participants have 180 days from the denial of a claim to file for an internal appeal and if that is denied they must file for an external appeal within four months. However, since many employees will not be aware of this right until their employer notifies them, by the time they learn of external appeals, the four-month period for requesting an external appeal may have expired.
Setting up the external appeal process may not be easy and this is recognized in federal regulations. There are only a limited number of accredited appeal organizations, less than 50 nationwide, while the government expects up to 2500 such appeals in 2011.
Some affected employers have already notified plan participants of external appeals. Nevertheless, individual employees should be aware of their rights under the law for both internal and external appeal of denied claims. Call your benefits office or plan administrator for specific information on how to make an appeal for a denied health care claim.
Excerpt from the Department of Labor Technical Release
This technical release extends, with a few modifications, the enforcement grace period set forth in T.R. 2010-02 until plan years beginning on or after January 1, 2012 to give the Departments time to publish new regulations necessary or appropriate to implement the internal claims and appeals provisions of PHS Act section 2719(a). Specifically, this Technical Release 2011-01 extends the enforcement grace period until plan years beginning on or after January 1, 2012 with respect to standard #2 above (regarding the timeframe for making urgent care claims decisions), standard #5 above (regarding providing notices in a culturally and linguistically appropriate manner), and standard #7 above (regarding substantial compliance). During the grace period, the Department of Labor and the IRS will not take any enforcement action against a group health plan, and HHS will not take any enforcement action against a self-funded nonfederal governmental health plan, with respect to these provisions.(7) Similarly, HHS is encouraging States to provide similar grace periods with respect to issuers, and HHS will not cite a State for failing to substantially enforce PHS Act section 2719(a) in these situations. Moreover, whereas T.R. 2010-02 required plans to be working in good faith to implement such standards for the enforcement grace period to apply, under this Technical Release 2011-01, no such requirement will apply for either the extended or the original enforcement grace period.
With respect to standard #6 above (requiring broader content and specificity in notices), the Departments are extending the enforcement grace period in part only. Specifically, with respect to the requirement to disclose diagnosis codes and treatment codes (and their corresponding meanings), this Technical Release 2011-01 extends the enforcement grace period until plan years beginning on or after January 1, 2012.(8) Accordingly, during this period, the Department of Labor and the IRS will apply the same enforcement policy applicable to standards #2, 5, and 7 (described in the paragraph immediately above) with respect to automatic disclosure of diagnosis and treatment information pursuant to standard #6.
The enforcement grace period will be extended with respect to the other disclosure requirements of standard #6 from July 1, 2011 until the first day of the first plan year beginning on or after July 1, 2011 (which is January 1, 2012 for calendar year plans). Therefore, enforcement with respect to the following provisions will take effect on a rolling plan year basis, starting on the first day of the first plan year beginning on or after July 1, 2011(9): (a) the disclosure of information sufficient to identify a claim (other than the diagnosis and treatment information), (b) the reasons for an adverse benefit determination, (c) the description of available internal appeals and external review processes,(10) and (d) for plans and issuers in States in which an office of health consumer assistance program or ombudsman is operational, the disclosure of the availability of, and contact information for, such program.
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