Archived News Release--Caution: information may be out of date.

U.S. DEPARTMENT OF LABOR

PWBA Press Release: Labor Department Issues Rules Strengthening Workers' Health Benefit Rights [11/20/2000]

For more information call: (202) 219-8921

New rules announced today by the U. S. Department of Labor will ensure workers quick processing of health insurance claims and timely decisions on appeals when claims are denied. The rules cover health plans offered by employers and covered by the Employee Retirement Income Security Act, known as ERISA.

"More than 130 million people in employer-based health plans will be able to count on a faster, fairer and more informed process for handling their claims and appeals to pay benefits," Secretary of Labor Alexis M. Herman said. "This final rule was directed by President Clinton and is based on recommendations from the President's Advisory Commission on Consumer Protection and Quality in Health Care, which called for better disclosure of information about health benefits and a fair and efficient system for resolving disputed claims for health benefits."

The final rule will be published in tomorrow's Federal Register. It is the first change in rules governing the claims and appeals process in 20 years. The Labor Department published proposed claims procedures in September 1998 and held a hearing on the proposal in February 1999.

The new rule covering ERISA-governed health plans: requires timely coverage and appeal decisions; provides meaningful information to patients about their rights under the appeals process; and creates a more fair process to review decisions to deny benefits.

The final rule provides for: faster decisions on initial claims and appealed claims, with time frames based on whether the claims are pre- service and post-service; special rules requiring expeditious consideration of claims involving "urgent care"; more time for patients to appeal denied health claims; different decision maker to handle appeals; consultation with relevant health care professionals in making decisions about appeals that involve medical judgment; enforcement of claimants rights through the court; timely action on "concurrent care reviews" for patients receiving a course of treatment who face early termination of benefits or have a need to extend treatment; fuller disclosure, including a full decision of the plan's claim procedures; and more information about the reasons for a denied claim and the criteria and rules applied by the plan.

In addition, the Department will publish tomorrow final amendments to its regulation governing the contents of summary plan descriptions to update and clarify specifically what information must be disclosed to workers and their families about their health plans. The final rule also covers plan descriptions that affect both pension and welfare benefit plans. It further adopts in final form regulations that were effective on an interim basis implementing certain amendments to ERISA's disclosure rules that were enacted as part of the Health Insurance Portability and Accountability Act and the Newborns' and Mothers' Health Protection Act.

Fact Sheet Attached

Fact Sheet

U. S. Department of Labor November 20, 2000

Patients' Rights Claims Procedure Regulation

Background:

In the years since 1977, when the Department first adopted a benefit claims regulation under ERISA, the health care industry has seen dramatic changes. Those changes have shifted the usual method of delivery of health care from doctors making independent medical decisions, while indemnity insurance companies decide later whether to pay, to integrated delivery systems under which "managed care" organizations review and oversee doctors' medical decisions, often before care is provided.

The patients' rights claims procedure regulation, which is now being issued in final form, creates new important patient protections that will ensure that group health plan participants in today's managed care environment have access to a faster, fairer, fuller process for benefit determinations.

Faster Decisions

Faster decisions on initial claims - rather than 90 days (or more) under current regulation, the new rule would require decisions (in most cases) not later than:

• 72 hours for urgent care claims
• 15 days for pre-service claims
• 30 days for post-service claims
• One 15 day extension for pre- and post-service claims

Faster decisions on appeal of denied claims - rather than 60 days (or more) under current regulation, the new rule would require decisions (in most cases) not later than:

• 72 hours for urgent care claims
• 30 days for pre-service claims
• 60 days for post-service claims

Fairer Process

• Claimants have more time to file appeals - 180 days, rather than current 60 days.
• If treating physician determines the claim is "urgent," plans must treat as urgent.
• Plans cannot impose fees or costs as a condition to filing or appealing a claim.
• Arbitration permitted, but only with full disclosure regarding the process, arbitrator, relationships, right to representation, and only if claimant agrees after completing internal appeal.
• Review must be de novo.
• Decision maker on appealed claims must be different than the person deciding initial claim.
• Plans must consult with appropriate health care professionals in deciding appealed claims involving medical judgment.
• Plans may not require more than two levels of review of denied claims. If more than one level, both levels must be completed with time frame applicable to one level.
• Special rules for the continuation or extension of approved benefits or services to be provided over time ("concurrent care decisions"). Individuals receiving approved care over a period of time must have an opportunity to review before benefits are reduced or terminated. Also, urgent care requests for an extension of approved benefits must be decided within 24 hours.
• Plans must have procedures and safeguards for ensuring and verifying consistent decision making.
• Plans must notify claimant of defective filing of claim in case of pre-service claims.
• If plans fail to make timely decisions or otherwise fail to comply with the regulation, claimants may go to court to enforce their rights.

Fuller Disclosure

• Plans must provide participants a full description of the plan's claim procedures.
• Plans must provide specific reasons for denials, including identification of and access to any guidelines, rules, protocols relied upon in making the adverse determination.
• Plans must provide participants access to all documents, records and other information relevant to the benefit determination, without regard to whether the plan relied on the material.
• Plans must disclose the name of medical professionals consulted as part of the claims process.

Final Rule on Summary Plan Description

• The final regulation updates and clarifies certain summary plan description content requirements for ERISA-covered employee benefit plans.
• The SPD content regulation implements the information disclosure recommendations of the President's Advisory Commission by clarifying the information required to be disclosed to plan participants and beneficiaries, in or as part of, the plan's summary plan description, and updates the disclosure rules applicable to both pension and welfare benefit plans. The SPD content regulation:

Provides that health plan SPDs must describe: (i) any cost-sharing provisions, including

-- premiums, deductibles, coinsurance and copayment amounts for which the participant or beneficiary will be responsible; (ii) any annual or lifetime caps or other limits on benefits under the plan; (iii) the extent to which preventive services are covered under the plan; (iv) whether, and under what circumstances, existing and news drugs are covered under the plan; (v) whether, and under what circumstances, coverage is provided for medical tests, devices and procedures; (vi) provisions governing the use of network providers, the composition of the provider network and whether, and under what circumstances, coverage is provided for out-of-network services; (vii) any conditions or limits applicable to obtaining emergency medical care; and (ix) any provisions requiring preauthorization or utilization review as a condition to obtaining a benefit or service under the plan.

-- Requires that the SPDs of pension and welfare benefit plan describe, among other things, the procedures on qualified domestic relation orders (QDROs) and qualified medical child support orders (QMCSCOs), the plan sponsor's authority to terminate the plan or eliminate benefits under the plan, COBRA continuation rights, and updated information on coverage by the Pension Benefit Guaranty Corporation and ERISA rights.

-- Repeals the limited exemption relating to SPDs of health plans that provide benefits through qualified health maintenance organizations (HMOs). Thus, health plans that provide benefits through a federally qualified HMO must comply with the improved SPD disclosure rule.

• Adopts in final form regulations implementing amendments to ERISA made by the Newborns' and Mothers' Health Protection Act. The final regulation requires health plan SPDs to include information on requirements under federal or state law applicable to the plan, and any health insurance coverage offered under the plan, relating to hospital length of stay following newborn deliveries."

Archived News Release--Caution: information may be out of date.