2011-18820. Group Health Plans and Health Insurance Issuers: Rules Relating to Internal Claims and Appeals and External Review Processes; Correction

AGENCIES:

Internal Revenue Service, Department of the Treasury; Employee Benefits Security Administration, Department of Labor; Centers for Medicare & Medicaid Services, Department of Health and Human Services.

ACTION:

Correction of amendment to interim final rules with request for comments.

SUMMARY:

This document corrects technical errors that appeared in the June 24, 2011 amendment to the interim final rules (76 FR 37208) entitled, “Group Health Plans and Health Insurance Issuers: Rules Relating to Internal Claims and Appeals and External Review Processes.”

DATES:

Effective Date: July 22, 2011.

FOR FURTHER INFORMATION CONTACT:

Ellen Kuhn, Centers for Medicare & Medicaid Services, Department of Health and Human Services, at [phone]; Amy Turner, Employee Benefits Security Administration, Department of Labor, at [phone]; or Karen Levin, Internal Revenue Service, Department of the Treasury, at [phone].

SUPPLEMENTARY INFORMATION:

I. Background

A. Introduction

In FR Doc. 2011-15890 of June 24, 2011 (76 FR 37208), there were technical errors that are identified in the “Summary of Errors” section and corrected in the “Correction of Errors” section below. The provisions in this correction notice are effective as if they had been included in the June 24, 2011 interim final rule with request for comments entitled, “Group Health Plans and Health Insurance Issuers: Rules Relating to Internal Claims and Appeals and External Review Processes.” Accordingly, the corrections are effective July 22, 2011.

B. Regulations Overview

On July 23, 2010, the Departments of Health and Human Services (HHS), Labor (DOL), and the Treasury (collectively, the Departments) issued interim final rules implementing section 2719 of the Public Health Service (PHS) Act (75 FR 43330) (July 2010 regulations), regarding internal claims and appeals and external review processes for group health plans and health insurance issuers offering coverage in the group and individual markets.^[1] The Departments issued an amendment to the interim final rules that was published in the Federal Register on June 24, 2011 (76 FR 37208) (June 2011 amendments). Below, we summarize the errors in the June 2011 amendments and describe the corrections we are making in this notice.

II. Summary of Errors

A. Error in the Preamble

In the FOR FURTHER INFORMATION CONTACT section of the June 2011 amendments (page 37208), we listed an incorrect telephone number for Ellen Kuhn, Centers for Medicare & Medicaid Services, Department of Health and Human Services. We are correcting the telephone number.

B. Errors in the Regulations Text

In the June 2011 amendments (page 37231), we inadvertently made a typographical error in the DOL regulations text that could cause confusion. The text pertains to the effective date of the suspension of the general rule defining the scope of what is appealable in external review. We are correcting this typographical error. We note that the regulation text for HHS and the Department of the Treasury were correct and therefore are unchanged.

In the joint preamble to the June 2011 amendments (pages 37209 through 37215), we explain that the July 2010 regulations established requirements for group health plans and health insurance issuers offering both individual and group health coverage and that the June 2011 amendments were modifying those requirements. However, the regulations text in the June 2011 amendments only reflected the changes to the group market provisions, which appear in all three Departments' regulations (pages 37228 through 37229; 37230 through 37231; and 37232 through 37233). Requirements that apply to the individual market only appear in HHS regulations, and conforming amendments to those requirements were inadvertently omitted from the regulation text of the June 2011 amendments. In the regulations text at 45 CFR 147.136, HHS is correcting this technical error. Specifically, we are reorganizing § 147.136(b)(3)(ii) and adding language to clarify that these amendments apply to health insurance issuers offering individual health coverage. These changes relate to internal claims and appeals processes requirements for individual health insurance issuers in the HHS regulations text. We note that the regulations text for the DOL and the Department of the Treasury were correct and therefore are unchanged.

III. Waiver of Proposed Rulemaking and Waiver of the Delay in Effective Date

Under the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq.), while a general notice of proposed rulemaking and an opportunity for public comment is generally required before the promulgation of regulations, this is not required when an agency, for good cause, finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the reasons for that finding in the notice.

The APA also generally requires that a final rule be effective no sooner than 30 days after the date of publication in the Federal Register. This 30-day delay in effective date can be waived, however, if an agency finds good cause why the effective date should not be delayed, and the agency incorporates a statement of the findings and its reasons in the rule issued.

This document merely corrects technical errors made in the June 2011 amendments published in the Federal Register on June 24, 2011 (76 FR 37208), which will be effective on July 22, 2011. The corrections contained in this document are consistent with and do not make substantive changes to the policies adopted in the June 2011 amendments. The preamble to the June 2011 amendments correctly refers to and discusses the substance of the sections affected by this technical correction. Therefore, we find for good cause that it is unnecessary and would be contrary to the public interest to undertake further notice and comment procedures to incorporate these corrections. Furthermore, we note that the June 2011 amendments were published, for good cause, as interim final rules, and that all the reasons stated in the June 2011 amendments for waiving notice and comment procedures with respect to the June 2011 amendments are applicable to this correction notice.

We are also waiving the 30-day delay in effective date for these corrections. We believe that it is in the public interest to ensure that the June 2011 amendments setting forth requirements for group health plans and health insurance issuers relating to internal claims and appeals and external review processes accurately states our policies as of the date they take effect. Therefore, we find that delaying the effective date of these corrections beyond the effective date of the June 2011 amendments would be contrary to the public interest. In doing so, we find good cause to waive the 30-day delay in the effective date.

IV. Correction of Errors

In FR Doc. 2011-15890 of June 24, 2011 (76 FR 37208), make the following corrections:

A. Correction to the Preamble

On page 37208, in the third column, under the FOR FURTHER INFORMATION CONTACT section, the telephone number “[phone]” for Ellen Kuhn, Centers for Medicare & Medicaid Services, Department of Health and Human Services, is corrected to read “[phone].”

B. Correction to the Regulations Text

29 CFR 2590.715-2719 [Corrected]

1. On page 37231, in the third column, in paragraph (d)(1)(ii), the phrase “with respect to claims for which external review has not been initiated before the effective date of this paragraph (d)(1) (September 20, 2011),” is corrected to read “with respect to claims for which external review has not been initiated before September 20, 2011,”.

45 CFR 147.136 [Corrected]

2. On page 37232, in the third column, after the amendatory instruction 3. and before the phrase “The revisions and additions read as follows”, add the following amendatory instructions to read as follows:

“4. Revising paragraphs (b)(3)(ii)(B), (b)(3)(ii)(E)(1), and (b)(3)(ii)(F).”

“5. Redesignating paragraphs (b)(3)(ii)(E)(2), (b)(3)(ii)(E)(3), and (b)(3)(ii)(E)(4), as (b)(3)(ii)(E)(3), (b)(3)(ii)(E)(4), and (b)(3)(ii)(E)(5), respectively.”

“6. Adding a new paragraph (b)(3)(ii)(E)(2).”

3. On page 37233, in the second column, after the five asterisks “* * * * *” and before the paragraph “(c) * * *,” add the following:

(b) * * *

(3) * * *

(ii) * * *

(B) Expedited notification of benefit determinations involving urgent care. The requirements of 29 CFR 2560.503-1(f)(2)(i) (which generally provide, among other things, in the case of urgent care claims for notification of the issuer's benefit determination (whether adverse or not) as soon as possible, taking into account the medical exigencies, but not later than 72 hours after receipt of the claim) continue to apply to the issuer. For purposes of this paragraph (b)(3)(ii)(B), a claim involving urgent care has the meaning given in 29 CFR 2560.503-1(m)(1), as determined by the attending provider, and the issuer shall defer to such determination of the attending provider.

* * * * *

(E) * * *

(1) The issuer must ensure that any notice of adverse benefit determination or final internal adverse benefit determination includes information sufficient to identify the claim involved (including the date of service, the name of the health care provider, the claim amount (if applicable), and a statement describing the availability, upon request, of the diagnosis code and its corresponding meaning, and the treatment code and its corresponding meaning).

(2) The issuer must provide to participants and beneficiaries, as soon as practicable, upon request, the diagnosis code and its corresponding meaning, and the treatment code and its corresponding meaning, associated with any adverse benefit determination or final internal adverse benefit determination. The issuer must not consider a request for such diagnosis and treatment information, in itself, to be a request for an internal appeal under this paragraph (b) or an external review under paragraphs (c) and (d) of this section.

* * * * *

(F) Deemed exhaustion of internal claims and appeals processes—(1) In the case of an issuer that fails to adhere to all the requirements of this paragraph (b)(3) with respect to a claim, the claimant is deemed to have exhausted the internal claims and appeals process of this paragraph (b), except as provided in paragraph (b)(3)(ii)(F)(2) of this section. Accordingly, the claimant may initiate an external review under paragraph (c) or (d) of this section, as applicable. The claimant is also entitled to pursue any available remedies under State law, as applicable, on the basis that the issuer has failed to provide a reasonable internal claims and appeals process that would yield a decision on the merits of the claim.

(2) Notwithstanding paragraph (b)(3)(ii)(F)(1) of this section, the internal claims and appeals process of this paragraph (b) will not be deemed exhausted based on de minimis violations that do not cause, and are not likely to cause, prejudice or harm to the claimant so long as the issuer demonstrates that the violation was for good cause or due to matters beyond the control of the issuer and that the violation occurred in the context of an ongoing, good faith exchange of information between the issuer and the claimant. This exception is not available if the violation is part of a pattern or practice of violations by the issuer. The claimant may request a written explanation of the violation from the issuer, and the issuer must provide such explanation within 10 days, including a specific description of its bases, if any, for asserting that the violation should not cause the internal claims and appeals process of this paragraph (b) to be deemed exhausted. If an external reviewer or a court rejects the claimant's request for immediate review under paragraph (b)(3)(ii)(F)(1) of this section on the basis that the issuer met the standards for the exception under this paragraph (b)(3)(ii)(F)(2), the claimant has the right to resubmit and pursue the internal appeal of the claim. In such a case, within a reasonable time after the external reviewer or court rejects the claim for immediate review (not to exceed 10 days), the issuer shall provide the claimant with notice of the opportunity to resubmit and pursue the internal appeal of the claim. Time periods for re-filing the claim shall begin to run upon claimant's receipt of such notice.

Signed this 15th day of July 2011.

Diane O. Williams,

Federal Register Liaison, Internal Revenue Service, Department of the Treasury.

Signed this 20th day of July 2011.

Daniel J. Maguire,

Director, Office of Health Plan Standards and Compliance Assistance, Employee Benefits Security Administration, Department of Labor.

Signed this 20th day of July 2011.

Dawn Smalls,

Executive Secretary to the Department, Department of Health and Human Services.

Footnotes

1.  The requirements of PHS Act section 2719 and the July 2010 regulations do not apply to health plans grandfathered under section 1251 of the Affordable Care Act.