The Affordable Care Act Standardizes Health Care Appeal Process

In July 2010, Departments of Health and Human Services, Labor and Treasury released a new health care appeal process as a component of the Affordable Care Act for new health plans that begin on or after September 23, 2010. This process is in addition to existing uniform standards for group health plans under the Employee Retirement Income Security Act (ERISA). Grandfathered plans are exempt from the new appeal and external review processes under the Affordable Care Act.

Note: The agencies released amendments to the appeals process effective July 22, 2011. For the latest news and more details please see Update: Amendment to the Health Care Appeals and External Review Process.

These guidelines ensure that a clearly defined and impartial process is in place if a participant's health plan refuses to pay the bill for medical treatment, such as an emergency room visit or MRI. The participant and his or her doctor can appeal the decision to the insurer. If the insurer still refuses to cover the test, the participant can appeal to an external party for review.

In addition to setting up a new appeals process, the agencies created a $30 million Consumer Assistance Grants Program for states to establish consumer assistance offices, or strengthen existing offices, with the goals of:

  • Helping consumers enroll in health coverage.
  • Helping consumers file complaints and appeals against health plans.
  • Educating consumers about their rights.
  • Empowering consumers to take action.
  • Tracking consumer complaints to help identify problems and strengthen enforcement.

Internal Appeals

New health plans must have an internal appeal process through the insurer to allow the consumer to:

  • Appeal when a health plan denies a claim for a covered service.
  • Appeal if coverage has been rescinded.
  • Have detailed information about the grounds for the denial of claims coverage.
  • Receive notification from the plan's issuer regarding the right to appeal, and instructions about how to begin the appeal process.
  • Receive a full and fair review of the denial.
  • Receive an expedited appeals process in urgent cases.

External Appeals

If the internal appeal is denied, consumers will have the right to appeal to an outside, independent reviewer. According to HealthCare.gov, a Website maintained by the U.S. Department of Health & Human Services, most states currently have an external appeal process; however, laws governing these processes vary greatly and contain gaps that leave millions of Americans outside the process altogether. The goal of the Affordable Care Act is to standardize the external appeal process and provide a high standard for full and fair review.

States are encouraged to adopt standards established by the National Association of Insurance Commissioners (NAIC) by December 31, 2011. The NAIC standards call for:

  • External review of plan decisions to deny coverage for care based on:
    • medical necessity
    • appropriateness
    • health care setting
    • level of care
    • effectiveness of a covered benefit
  • Clear information about the right to both internal and external appeals, both in the standard plan materials and at the time the claim is denied.
  • Expedited access to external review in some cases, including emergency situations or cases where the health plan did not follow the rules in the internal appeal.
  • Requiring the health plan to pay the cost of the external appeal under state law, and states may not require consumers to pay more than a nominal fee.
  • Review by an independent body assigned by the state. The state must also ensure that the reviewers:
    • meet certain standards
    • keep written records
    • are not affected by conflicts of interest
  • Emergency processes for urgent claims, and a process for experimental or investigational treatment.
  • Binding final decisions so that if the consumer wins, the health plan will pay the benefit that was previously denied.

If state laws do not meet these standards, consumers will be protected by comparable federal external appeal standards. Also, for health plans that are not subject to state law, including new self-insured employer plans, the consumer will be protected by the new federal standards.

Employees should contact their insurance carrier to file an appeal or visit www.healthcare.gov for more information on the appeal process.

How Paychex Insurance Agency Can Help

Paychex Insurance Agency is a full service organization that has taken a leadership role in transforming how businesses like yours adapt to and benefit from the rapidly changing insurance industry. We're ready to offer information and assistance to help you navigate the recent Health Care Reform initiatives.

We can help:

  • Educate you on the Affordable Care Act Process and other Health Care Reform provisions
  • Review possible new requirements during health plan renewal
  • Provide resources to help you explain the changes to your employees
  • Resolve your employees' health-care-related questions and problems, and reduce the administrative time spent researching them through Health Advocacy Services.
  • Follow the latest regulations to keep you informed about any legislative changes that affect you and your business

Health Care Reform Updates

With access to legislative and regulatory specialists in Washington, D.C. and expert, in-house sources of legal and compliance guidance, Paychex Insurance Agency is your source for Health Care Reform knowledge, tools, and resources.

Whether you're looking for a Business Owner Policy, Workers' Compensation insurance or group health and life insurance, Paychex Insurance Agency offers flexible, scalable insurance solutions for you, your business and your employees. To learn more about how we can meet your insurance needs, call 877-393-8868 or have an agent call you.

The Department of Health and Human Services and the Internal Revenue Service (IRS) continue to provide specifics and guidance on the Health Care Reform Act. Paychex will monitor these regulatory developments and provide updates as appropriate.

The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. It is provided for informational purposes only. If you require legal or accounting advice, or need other professional assistance, you should always consult your licensed attorney, accountant, or other federally licensed tax professional to discuss your particular facts, circumstances, and business needs.

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