Legal Alerts

Health Care Reform: Extension of Enforcement Grace Period for Certain Internal Claims and Appeals Requirements


Health Care Reform imposes new internal claims and appeal procedures on non-grandfathered group health plans for plan years beginning on or after September 23, 2010.  In Technical Release 2011-01, the DOL, Department of Health and Human Services, and Department of Treasury announced they will not take any enforcement action against group health plans for certain internal claims and appeals requirements until plan years beginning in 2012, even though group health plans are otherwise required to comply with these requirements.  There are several new claims procedures that are currently effective or become effective July 1, 2011 and January 1, 2012 as follows:

Plan years beginning on or after September 23, 2010:

  • Adverse Benefit Determinations.  The definition of “adverse benefit determination” subject to the claims and review process must now include a plan’s rescission of a participant’s coverage.
  • Full and Fair Review.  Plans are required to provide claimant any new or additional evidence or rationale for a denial and a reasonable opportunity for the claimant to respond to such evidence or rationale.
  • Adverse Employment Actions.  Decision involving hiring, compensation, termination, promotion, or related matters with respect to an individual who participates in claim and appeal decisions must not be based upon the likelihood that the individual will support a benefit denial.

Plan years beginning on or after July 1, 2011:

  • Information Sufficient to Identify Claim.  Notices of denials of coverage (“adverse benefit determinations”) must include information sufficient to identify the claim, including the date of the service, the health care provider and the claim amount.
  • Reasons for Denial. Notice of denials of coverage must include the reasons for the denial.
  • Description of Appeals Process.  The plan must provide a description of internal appeals and external review processes.
  • Contact Information for Assistance.  The plan must disclose the availability of, and contract information for, an applicable office of health insurance consumer assistance program or ombudsman.

Plan years beginning on or after January 1, 2012:

  • 24-Hour Deadline for Urgent Care Claims.  Urgent care claims must be decided no later than 24 hours (instead of the current 72 hours) after the receipt of the claim by the plan.
  • Culturally and Linguistically Appropriate Notices.  Notices relating to claims and claims appeals must be in a culturally and linguistically appropriate manner.
  • Diagnostic and Treatment Codes.  Notice of denial of coverage must include diagnosis and treatment codes and their corresponding meanings (in addition to identifying information as described above). 
  • Strict Compliance.  If a health plan fails to strictly adhere to the claims and appeals requirements, the claimant is deemed to have exhausted the internal claims and appeals procedures and may immediately seek an external review or file a lawsuit.

In addition to these internal claims and appeals requirements, Health Care Reform also imposes new complex external review procedures on non-grandfathered group health plans.

If you have questions or need additional information about implementing these new requirements or for a review of your current claims and appeals procedures, contact one of our attorneys or visit our Employment Law Resource Center. 

This information provided above about a new development of the law is intended for general informational purposes only. It should not be construed as legal advice or legal opinion on any specific facts or circumstances and you are urged to consult a Lindquist & Vennum LLP attorney or one of your own choosing concerning your situation and specific legal questions you have.

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