The Patient Protection and Affordable Care Act (health care reform) requires non-grandfathered health plans to make changes to their internal and external claims procedures. The new requirements generally became effective, for non-grandfathered calendar year plans, on January 1, 2011. The Departments of Labor, Health and Human Services, and Treasury (the Departments) had issued interim final regulations on the new rules for internal and external claims in July 2010, but later issued guidance extending the deadline for compliance for some of the provisions to July 1, 2011. On March 18, 2011, the Departments further extended the deadline for these provisions to January 1, 2012 (for calendar year plans).
Provisions Affected by the Extension
Compliance with the following provisions is extended until the first day of the plan year beginning on or after January 1, 2012 (i.e. January 1, 2012 for calendar year plans):
- 24 hours to provide notification of urgent care claim decisions. Notification of determinations on urgent care claims must be made within 24 hours after receipt of the claim (reduced from 72 hours).
- “Deemed denial.” If the plan does not strictly adhere to the requirements of the claims procedures, the claim is deemed to be denied and the participant may immediately bring a lawsuit or request an external review.
- Culturally and linguistically appropriate notices. Notices must be provided in a culturally and linguistically appropriate manner, including in some circumstances a language other than English.
- Diagnostic codes and treatment codes. Notices must include the specific diagnostic code and treatment code and the meaning of the codes.
Additionally, the following requirement is extended to the first plan year beginning on or after July 1, 2011 (i.e. January 1, 2012 for calendar year plans):
- Disclosure of other claims information. Additional claims information must be disclosed in an adverse benefit determination including information sufficient to identify the claim, the reason for the adverse benefit determination, a description of available internal and external appeals processes, and information regarding the availability of an office of health insurance consumer assistance program or ombudsman.
The Departments plan to issue an amendment to the interim final regulations regarding internal and external claims procedures later this year and also indicate that the requirements listed above may be modified.
At this time, plan sponsors should discuss with their insurers and third party administrators if they will be taking advantage of the extended deadline and whether a summary of material modifications describing the delayed effective dates should be issued to participants.