Linguistics – Another word for “Barrier to Entry”

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PPACA, HIPAA and Federal Health Benefit Mandates: Practical
The Self-Insurer August 2011
By Carolyn Smith, Esq. and John Hickman, Esq., Alston & Bird, LLP
New Claim Review Regulations Ease Compliance Burdens For Group Health Plans
On June 24, 2011, the U.S. Department of Treasury, Labor (DOL) and Health and Human Services (HHS) (collectively, the “Agencies”) jointly issued new interim final regulations (“Final Regulations”) and related guidance regarding the internal appeals and external claim review procedures (“Claims Review Rules”) for fully insured and self-funded group health plans and insurance policies issued in the individual market. These new requirements were added by the Affordable Care Act (ACA). The Claims Review Rules apply only to non-grandfathered group health plans otherwise subject to the health insurance reforms added by ACA. As discussed below, the Final Regulations provide significant relief from a number of the requirements that were originally included in the Claims Review Rules.
Requirements Relating to Internal Claims and Appeals
Up to 72 hours now allowed for benefit determinations relating to urgent care
The Final Regulations generally return to the pre-ACA rule in the ERISA claims regulations that determinations relating to urgent care must be made within 72 hour. However, the plan or insurer must defer to the provider’s determination as to whether a claim involves urgent care. In the preamble to the revised regulations, the Agencies emphasize that 72 hours is an outside limit and that medical exigencies may require a more rapid determination.
Diagnosis and treatment codes now only required upon request
The Final Regulations eliminate the requirement that notices of adverse benefit determinations (ABDs) automatically include diagnosis and treatment codes and their meanings. Instead, plans and insurers must provide such codes and their meanings as soon as practicable following a request from a plan participant or beneficiary. The notice of an ABD must inform participants and beneficiaries of their right to obtain such codes.
Requirements that notices be provided in a culturally and linguistically appropriate manner (“CLA requirements”)
In one of the most significant changes to the original Claims Review Rules, the CLA requirements (e.g., to provide notices in non-English languages) are completely replaced by a far simpler approach. The original plan by plan determination of whether the CLA requirements apply is replaced by a single standard based on the county to which the notice was sent. The threshold is that at least 10 percent of the population in the claimant’s county are literate only in a particular non-English language. Under the Final Regulations, Plans are not responsible for making this determination; rather, the list of counties to which the CLA requirements apply and the relevant languages are to be published by the Agencies. The preamble to the Final Regulations contains a current list of relevant counties and languages. There are 255 counties (78 of which are in Puerto Rico) that meet the threshold. In the vast majority of cases, Spanish is the relevant non-English language; however, Chinese, Tagalog, and Navajo are present in a few counties affecting just five states, Alaska, Arizona, California, New Mexico, and Utah.
The Final Regulations also eliminate the “tagging and tracking” requirement under which, once a claimant requested a notice in an applicable non-English language, all subsequent notices had to be in that language. This requirement was challenging for many current systems. In lieu of this requirement, the Final Regulations require that the English versions of all notices include a prominently displayed statement in any applicable non-English language describing how to access the language services provided by the plan. Targeted notices are not required, i.e., the statements may be included in all notices. The Agencies have published model notices that contain sample statements in each of the relevant languages. The plan or issuer must provide oral language services (such as a telephone customer assistance hotline) in any applicable non-English language and, upon request, must provide a written translation of any notice in any applicable non-English language.
The Final Regulation constrict the “strict adherence” standard for exhaustion of remedies
The original Claims Review Rules allow claimants to by-pass the internal appeals process if all of the procedural requirements are not strictly adhered to. The Final Regulations provide an exception to this strict adherence requirement for errors that are minor and meet certain other requirements. In particular, claimants may be required to exhaust internal administrative remedies despite a failure of a plan or insurer to strictly comply with the applicable rules if the failure was: de minimis; non-prejudicial to the claimant; attributable to good cause or matters beyond the control of the plan or insurer; in the context of an going good-faith exchange of information; and not reflective of a pattern or practice of noncompliance.
Effective date of changes
These changes to the internal claims process will take effect for plan years beginning on or after January 1, 2012.
Requirements Relating to External Reviews – In General
Plans and issuers must follow either a federal external review process or a state external review process. Ultimately, both the federal and state processes are to include, at a minimum the consumer protection provisions of the Uniform Health Carrier External Review Model Act promulgated by the National Association of Insurance commissioners (the “NAIC Model Act”). The process that applies depends on whether the plan is fully insured or self-insured.
Requirements Relating to External Reviews – Self-Insured Plans Subject to ERISA or the Code
Self-insured plans subject to ERISA and/or the Code are generally required to comply with a federal external review process that uses independent reviewing organizations or IROs (the “private IRO process”). DOL Technical Release 2010-01 sets forth a safe harbor process for complying with the federal external review requirements. The Final Regulations make several key changes with resepct to the federal external review process.
Scope of the federal external review process
The breadth of claims with respect to which the federal external review process applied was the subject of great concern to many employers. Under the Claims Review Rules, all benefit denials, other than questions of eligibility. In contrast, the NAIC Model Act is limited to claims relating to medical necessity, appropriateness, health care setting, level of care or effectiveness of a covered benefit.
The Final Regulations move the scope of the federal review closer to the NAIC Model Act, although it is not identical. Under the Final Regulations, the scope of the federal review includes matters that involve “medical judgment”. Medical judgment includes, but is not limited to, those factors listed in the NAIC Model Act. The actual extent of the difference as a practical matter may depend on how each plan implements its own review program. The regulations provide a couple of examples. For example, suppose a plan normally covers 30 visits to a particular specialist, but will cover more in the event of an approved treatment plan. If a claim for the 31st is denied, this involves a determination of medical judgment and would be subject to external review. On the other hand, if there is just a flat limit, with no exception, the denial of the 31st visit would not involve medical judgment and would not be subject to external review.
The preamble lists a number of other examples of situations that involve medical judgment, including (to list a few) whether a participant is entitled to a reasonable alternative standard for a reward under a wellness program; the frequency, method, treatment or setting for a required preventative service where none is specified in the recommendations; and whether a plan is complying with the nonquantitative treatment limitations under the Mental Health Parity Act. The external review process continues to apply to rescissions.
The narrowing of the scope of the federal external review is temporary, and will be revisited by the Agencies by January 1, 2014, when the remainder of the health reforms become effective. If the Agencies revert to a broader scope of review, the will provide some time for plans and issuers to adjust.
Effective date of change: The change in the scope of the federal external review is effective with respect to claims for external review initiated on or after September 20, 2011.
IRO assignment process
The original DOL safe harbor guidance on the external review process provided that, to be eligible for the safe harbor, the plan (or the plan’s TPA) must contract with at least three IROs. The purpose of this requirement was to ensure an independent and impartial review process. In subsequent Frequently Asked Questions, the Agencies clarified that failure to contract with at least three IROs would not be a per se violation of the ClaimsReview Rules and that, instead, the plan could demonstrate other steps taken to ensure that it external review process was independent and without bias.
Under revised DOL guidance, a plan must contract with at least two IROs by January 1, 2012 and rotate assignments among them. As this is a safe harbor, a plan may use an alternative process to demonstrate that reviews are independent and unbiased. However, DOL and the Treasury Department will “look closely” at any alternative means. At a minimum, these agencies expect plans to document how any alternative process constitutes random assignment, as well as how it ensures that the process is not subject to undue influence by the plan and without bias.
Requirements Relating to External Review – Fully Insured Plans
In general, in the case of a fully insured plan, the insurer is responsible for complying with the external review requirements. If the state has a compliant external review process, then the insurer must comply with that process. If the state does not have a complaint process, then a federal external review process applies. The original regulations provided a transition period to allow states to bring their laws into compliance with the NAIC Model Act. The Final Regulations end the transition rule for existing state processes on December 31, 2011, regardless of the plan year. A further transition period is provided until January 1, 2014 for state processes that are similar to the NAIC Model Act process. Beginning January 1, 2014 state process must comply with the NAIC Model Act. In states without a qualifying state process, the insurer may elect either to follow an HHS process administered through the federal Office of Personnel Management or the IRO process that applies to self-funded plans.