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 within 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 for 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."

SEE: 29 CFR 2560.503-1