[Federal Register Volume 60, Number 60 (Wednesday, March 29, 1995)]
[Rules and Regulations]
[Pages 16056-16058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7792]
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OFFICE OF PERSONNEL MANAGEMENT
48 CFR Parts 1604 and 1652
RIN 3206-AG30
Federal Employees Health Benefits Acquisition Regulation Filing
Health Benefit Claims; Addition of Contract Clause
AGENCY: Office of Personnel Management.
ACTION: Interim regulations with request for comments.
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SUMMARY: The Office of Personnel Management (OPM) is issuing interim
regulations to add a new contract clause of the Federal Employees
Health Benefits Acquisition Regulation (FEHBAR). The clause clarifies
for both FEHB carriers and covered individuals the circumstances under
which OPM may render a decision regarding a covered individual who asks
OPM to review a health benefits plan's denial of a claim if the plan
has either affirmed its denial when the covered individual requested
reconsideration, or failed to respond to the covered individual's
request for reconsideration as provided by OPM's regulations. The
clause further clarifies the circumstances under which claimants may
seek court review of benefit denials under the FEHB Program. The
purpose of these interim regulations is to clarify that covered
individuals who wish to bring legal action regarding a denial of an
FEHB benefit must pursue such claim against OPM. Further, the interim
regulations clarify the administrative review process that must precede
legal action in the courts.
DATES: These interim regulations are effective March 29, 1995. Comments
must be received on or before May 30, 1995.
ADDRESSES: Send written comments to Lucretia F. Myers, Assistant
Director for Insurance Programs, Retirement and Insurance Service,
Office of Personnel Management, P.O. Box 57, Washington, DC 20044; or
deliver to OPM, Room 3451, 1900 E Street NW., Washington, DC; or FAX to
(202) 606-0633.
FOR FURTHER INFORMATION CONTACT:
Margaret Sears, (202) 606-0004.
SUPPLEMENTARY INFORMATION: Historically, OPM has required that
[[Page 16057]] covered individuals who want to bring suit because an
FEHB carrier has denied their claim for health benefits must sue the
carrier, not OPM. These interim regulations provide that legal actions
arising out of a denial of FEHB benefits should be brought against OPM
rather than the FEHB carrier that made the initial denial decision.
Because OPM has the authority under the FEHB law to order the carrier
to pay the claim, OPM has determined it is appropriate under current
statute for the covered individuals to bring suit against OPM if OPM
declines to order the carrier to pay the claim. The clause clarifies
the process and circumstances for bringing legal actions under the FEHB
Program and gives the administrative review process that must be
completed before suit is brought.
The legislative history of Sec. 8902(j), title 5, United States
Code, shows that Congress intended OPM (at that time the Civil Service
Commission) to provide an administrative appeal process, binding upon
the carriers, that would save covered individuals the expense and delay
of being forced into the courts to recover on meritorious claims for
benefits. Based upon this directive and its central role in the
administration of the FEHB Program, OPM established a detailed
administrative review process for benefits claims leading to a final
decision on such claims by OPM. It is OPM's view that this
administrative review process must be followed before legal action is
pursued in the courts. Further, the matter to be reviewed by a court
upon appeal is the OPM decision affirming the carrier's denial of
benefits, with the court's review being limited to an examination of
OPM's administrative decision to deny the claim for payment or
services.
Health insurance contracts under the FEHB Program are Federal
contracts under 5 U.S.C., chapter 89. Accordingly, legal actions
concerning disputes arising or relating to those contracts are
controlled by Federal, rather than State law. Congress, in the FEHB
Act, mandated Federal uniformity for all matters that relate to (1) the
nature or extent of coverage; (2) benefits; and (3) payment of benefits
under the FEHB Program. By statute, all health insurance contracts
require the carrier to agree to pay or provide a health service or
supply in an individual case if OPM finds that the covered individual
is entitled to the benefit under the terms of the contract. Congress
also directed OPM to take a central role in determining whether a
health service or supply should be provided in individual cases to
covered individuals and, if it should be provided, to require carriers
to pay for such health service or supply. These interim regulations
reaffirm the principle of uniformity in the FEHB Program by providing
that in judicial disputes regarding the denial of a health benefits
claim, review is to be limited to the record that was before OPM and
that was the basis of the OPM decision to disallow the benefit. In the
event that an appropriate court concludes that benefits should have
been awarded under the FEHB Act, the court possesses ample authority to
require OPM to order that such payments be made to the covered
individual from the carrier. These interim regulations clarify that OPM
intends for its decision to be upheld unless the Court concludes that
the OPM decision affirming the carrier's denial of benefits was
inconsistent with the standard for final agency action under applicable
Federal law.
The new clause reflects the administrative review procedures that
must precede court review. These procedures are prescribed by
regulations at 5 CFR 890.105 and reflects minor changes that OPM is
making to 5 CFR 890.105 by interim regulations being published in
conjunction with this interim regulation The new clause also reflects
regulations and 5 CFR 890.107 regarding court review and reflects
changes OPM is making to 5 CFR 890.107 by regulations also being
published in conjunction with this interim regulations.
OPM proposes to incorporate these procedures into the FEHB contract
by adding a new clause 1652.204-72, Filing Health Benefit Claims/Court
Review of Disputed Claims, to Subpart 1652.2 of the Federal Employees
Health Benefits Acquisition Regulation (FEHBAR).
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because the regulation
merely incorporates administrative procedures and regulatory
requirements into FEHB contracts.
List of Subjects in 48 CFR Parts 1604 and 1652
Government employees, Government procurement, Health insurance.
Office of Personnel Management.
James B. King,
Director.
Accordingly, OPM proposes to amend 48 CFR chapter 16 as follows:
PART 1604--ADMINISTRATIVE MATTERS
1. The authority citation for parts 1604 and 1652 continue to read
as follows:
Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.
2. In part 1604 subpart 1604.71 is added to read as follows:
Subpart 1604.71--Disputed Health Benefit Claims
1604.7101 Filing Health Benefit Claims/Court Review of Disputed
Claims.
Guidelines for an Federal Employees Health Benefit (FEHB) Program
covered individual to file a claim for payment or service and for legal
actions on disputed health benefit claims are found at 5 CFR 890.105
and 890.107, respectively. The contract clause at 1652.204-72 of this
chapter, reflecting this guidance, must be inserted in all FEHB Program
contracts.
PART 1652--CONTRACT CLAUSES
3. Subpart 1652.2 is amended by adding section 1652.204-72 to read
as follows:
Subpart 1652.2--Texts of FEHBP Clauses
1652.204-72 Filing Health Benefit Claims/Court Review of Disputed
Claims.
As prescribed in 1604.7101 of this chapter, the following clause
must be inserted in all FEHB Program contracts.
FILING HEALTH BENEFIT CLAIMS/COURT REVIEW OF DISPUTED CLAIMS
(a) General. The Carrier resolves claims filed under the Plan.
All health benefit claims must be submitted initially to the
Carrier. If the Carrier denies a claim (or a portion of a claim),
the covered individual may ask the Carrier to reconsider its denial.
If the Carrier affirms its denial or fails to respond as required by
paragraph (b) of this clause, the covered individual may ask OPM to
review the claim. A covered individual must exhaust both the Carrier
and OPM review processes specified in this clause before seeking
judicial review of the denied claim.
(b) Time limits for reconsidering a claim. (1) The covered
individual has 1 year from the date of the notice to the covered
individual that a claim (or a portion of a claim) was denied by the
Carrier in which to submit a written request for reconsideration to
the Carrier.
(2) The Carrier has 30 days after the date of receipt of a
timely-filed request for reconsideration to:
(i) Affirm the denial in writing to the covered individual;
(ii) Pay the bill or provide the service; or
(iii) Request from the covered individual or provider additional
information needed to [[Page 16058]] make a decision on the claim.
The Carrier must simultaneously notify the covered individual of the
information requested if it requests additional information from a
provider. The Carrier has 30 days after the date the information is
received to affirm the denial in writing to the covered individual
or pay the bill or provide the service. The Carrier must make its
decision based on the evidence it has if the covered individual or
provider does not respond within 60 days after the date of the
Carrier's notice requesting additional information. The Carrier must
then send written notice to the covered individual of its decision
on the claim. The covered individual may request OPM review as
provided in paragraph (b)(3) of this clause if the Carrier fails to
act within 30 days after the covered individual's request for
reconsideration or the Carrier's receipt of additional information.
(3) The covered individual may write to OPM and request that OPM
review the Carrier's decision if the Carrier either affirms its
denial of a claim or fails to respond to a covered individual's
written request for reconsideration within 30 days after the date it
receives the request or within 30 days after the date it receives
the additional information requested. The covered individual must
submit the request for OPM review within the time limit specified in
paragraph (e)(1) of this clause.
(4) The Carrier may extend the time limit for a covered
individual's submission of additional information to the Carrier
when the covered individual shows he or she was not notified of the
time limit or was prevented by circumstances beyond his or her
control from submitting the additional information.
(c) Information required to process requests for
reconsideration. (1) The covered individual must put the request to
the Carrier to reconsider a claim in writing and give the reasons,
in terms of applicable brochure provisions, that the denied claim
should have been approved.
(2) If the Carrier needs additional information from the covered
individual to make a decision, it must:
(i) Specifically identify the information needed;
(ii) State the reason the information is required to make a
decision on the claim;
(iii) Specify the time limit (60 days after the date of the
Carrier's request) for submitting the information; and
(iv) State the consequences of failure to respond within the
time limit specified, as set out in paragraph (b)(2) of this clause.
(d) Carrier determinations. The Carrier must provide written
notice to the covered individual of its determination. If the
Carrier affirms the initial denial, the notice must inform the
covered individual of:
(1) The specific and detailed reasons for the denial;
(2) The covered individual's right to request a review by OPM;
and
(3) The requirement that requests for OPM review must be
received within 90 days after the date of the Carrier's denial
notice and include a copy of the denial notice as well as documents
to support the covered individual's position.
(e) OPM review. (1) If the covered individual seeks further
review of the denied claim, the covered individual must make a
request to OPM to review the Carrier's decision. Such a request to
OPM must be made:
(i) Within 90 days after the date of the Carrier's notice to the
covered individual that the denial was affirmed; or
(ii) If the Carrier fails to respond to the covered individual
as provided in paragraph (b)(2) of this clause, within 120 days
after the date of the covered individual's timely request for
reconsideration by the Carrier; or
(iii) Within 120 days after the date the Carrier requests
additional information from the covered individual, or the date the
covered individual is notified that the Carrier is requesting
additional information from a provider. OPM may extend the time
limit for a covered individual's request for OPM review when the
covered individual shows he or she was not notified of the time
limit or was prevented by circumstances beyond his or her control
from submitting the request for OPM review within the time limit.
(2) In reviewing a claim denied by the Carrier, OPM may
(i) Request that the covered individual submit additional
information;
(ii) Obtain an advisory opinion from an independent physician;
(iii) Obtain any other information as may in its judgment be
required to make a determination; or
(iv) Make its decision based solely on the information the
covered individual provided with his or her request for review.
(3) When OPM requests information from the Carrier, the Carrier
must release the information within 30 days after the date of OPM's
written request unless a different time limit is specified by OPM in
its request.
(4) Within 90 days after receipt of the request for review, OPM
will either:
(i) Give a written notice of its decision to the covered
individual and the Carrier; or
(ii) Notify the individual of the status of the review. If OPM
does not receive requested evidence within 15 days after expiration
of the applicable time limit in paragraph (e)(3) of this clause, OPM
may make its decision based solely on information available to it at
that time and give a written notice of its decision to the covered
individual and to the Carrier.
(f) Court review. (1) A suit to compel enrollment under
Sec. 890.102 of Title 5, Code of Federal Regulations, must be
brought against the employing office that made the enrollment
decision.
(2) A suit to review the legality of OPM's regulations under
this part must be brought against the Office of Personnel
Management.
(3) Federal Employees Health Benefits (FEHB) carriers resolve
FEHB claims under authority of Federal statute (chapter 89, title 5,
United States Code). A covered individual may seek judicial review
of OPM's final action on the denial of a health benefits claim. A
legal action to review final action by OPM involving such denial of
health benefits must be brought against OPM. The recovery in such a
suit will be limited to the amount of benefits in dispute.
(4) An action under paragraph (f)(3) of this clause to recover
on a claim for health benefits:
(i) May not be brought prior to exhaustion of the administrative
remedies provided in paragraphs (a) through (e) of this clause;
(ii) May not be brought later than December 31 of the third year
after the year in which the care or service was provided; and
(iii) Will be limited to the record that was before OPM when it
rendered its decision affirming the Carrier's denial of benefits.
(End of Clause)
[FR Doc. 95-7792 Filed 3-28-95; 8:45 am]
BILLING CODE 6325-01-M
