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Administration Delaying Some Rules For Appealing Health Insurance Denials

Mar 25, 2011

The Obama administration is delaying until next January its enforcement of some new rules designed to protect patients who appeal insurers' decisions to deny or reduce health care benefits.

In the meantime, the Labor Department said in a posting on its website that it will revise the requirements to deal with objections raised by insurers. These rules were mandated by the health care law, and federal officials had earlier said they would start enforcing them in July.

The delays were defended by the administration and the insurance industry but worry consumer advocates.

Among the rules now on hold are:

--A reduction in the amount of time an insurance company is allowed to review a denial of coverage in urgent cases, from no more than 72 hours to 24 hours. 

--A requirement that insurers provide information about the denial and how to appeal in appropriate language for non-English speaking beneficiaries.

--A requirement that insurers must provide consumers with specific details, which would include diagnostic codes used by doctors, hospitals and insurers, about what treatment isn’t covered and why.

When the administration first released the appeals rules, it said they would go into effect last January. Last fall officials revised that timeline to say enforcement of some rules would not begin until July to allow insurers appropriate time to get procedures in place.

But the low-key announcement posted on the Labor website March 18 tells insurers and self-insured employers that the enforcement grace period has been extended until 2012 because the government intends to modify the rules "in the near future." What those changes might be were not disclosed, but the prospect concerns consumer groups.

"We want to be sure that delays don't mean it won't happen," said Cheryl Fish-Parcham, deputy director for health policy at Families USA, a health advocacy group.

"Once again the rights that were promised under the Affordable Care Act are going to be further delayed," said Timothy Jost, a health law professor at Washington and Lee University School of Law and a consumer representative to the National Association of Insurance Commissioners.

The appeals announcement is the latest of several moves by the administration that slow down implementation of the health law. It has granted temporary exemptions to states seeking more time to comply with certain provisions of the law and given waivers to insurers offering limited-benefit policies known as "mini med plans." 

The government is "under a lot of pressure from businesses and insurers to make things work more smoothly," said Jost.

But a Labor Department spokesman said in a statement that the new decision "struck a balance" in response to a variety of groups that had submitted comments on the rules, including health insurers, states, patient advocacy groups, employer-sponsored health plans and other.

In its comments to the government, America's Health Insurance Plans, a trade association representing 1,300 insurers, said that providing detailed explanations to consumers using diagnostic codes would be an administrative burden and could even delay getting denial notices to beneficiaries. The group also said that since some urgent care decisions don't involve emergencies, they don't have to be made within 24 hours.

Translating appeals information to languages other than English would also create administrative challenges, the group said. The association's spokesman, Robert Zirkelbach, said that it was better for consumers to talk to a live person who can answer questions rather than translating information in writing.

"The goal is to have a process that will work better and more efficiently for consumers," Zirkelbach said.

One aspect of the new appeals rules that is not affected by the latest government announcement is the timeframe given to consumers to file an appeal. Under most plans, beneficiaries have 180 days after receiving a denial notice to request a review. The announcement also does not affect the right to appeal when coverage is canceled or denied because the treatment was not medically necessary, said Fish-Parcham.

A report released last week by the Government Accountability Office, the independent investigative arm of Congress, underscored the importance of appeals. The GAO analyzed data from four states and found that 39 to 59 percent of consumers succeeded in reversing a coverage denial when they appealed to their insurance company.

The suspended rules apply only to the first stage of an appeal, one that is filed internally with the health insurer and is required in most cases before the consumer can appeal outside the company. In February, 24 consumer organizations and patient advocates sent a letter to Health and Labor officials urging them not to relax some rules affecting the law' provisions establishing the external appeals process.

Contact Susan Jaffe at Jaffe.khn@gmail.com

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