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While many health plans already have an appeals process in place for self-insured employers under the Employee Retirement Income Security Act, new federal rules clarify the process for consumers to challenge denials and rescissions.
The federal requirement will apply for the first time to companies that self-insure, as well as to other employer-sponsored and individual plans.
If the patient's appeal is denied through the internal channel, members will have the right to appeal all denied claims to an independent reviewer not employed by the health plan. According to a statement issued by the Obama administration, 44 states provide some form of external appeals, but the laws vary from state to state.
For denials as well as many other new regulations, the administration is asking lagging states to increase their regulatory oversight of health plans.
The appeals-process regulations, which are part of the Patient Protection and Affordable Care Act (PPACA), don't apply to health plans considered to be grandfathered-plans that were operating at the time President Obama signed the law, and that maintain other specific cost parameters.
"Most employers will blow off being a grandfathered plan because the conditions regarding cost increases are so onerous," says Cynthia Stamer, a Texas-based management attorney and consultant specializing in human resources. "Most of my clients are seeing insurance premiums go up, so they're going to have to increase deductibles to keep the plan. You can't change an insurance contract for insured plans and stay grandfathered."
Appeals-process requirements won't create added red tape for most employers, observers say.
"The new rules for ERISA plans are not at all burdensome for employers," says Helen Darling, president of the National Business Group on Health, Washington, D.C. "It's not a huge change. It only really has an impact on the individual market."