President’s Message: External Review Requirements Go Into Effect January 2012

This past Fall, the federal government issued a technical release updating the “external review” requirements for health plans and insurers under the Patient Protection and Affordable Care Act (PPACA).¹ The most recent regulations published by the U.S. Department of Health and Human Services (HHS) and the Department of Labor (DOL) alter several key external review provisions that were first published in 2010 after the adoption of PPACA.

The new Technical Amendment alters the original interim regulations that were released in July 2010.² Key changes include:

• Compliance deadlines were extended until January 1, 2012, both for health plans and states that are attempting to implement or enhance their own external review regulations. States have until January 1, 2014, to transition to the National Association of Insurance Commissioner (NAIC) model act covering external review activities if certain criteria are met.
• Temporarily limiting the scope of the external reviews to just the “medical necessity appropriateness” of the care being rendered when an external appeal is filed.³ Now eligible claims include only those that involve “(1) medical judgment (excluding those that involve only contractual or legal interpretation without any use of medical judgment…), as determined by the external reviewer; or (2) a rescission of coverage.”⁴
• Restoring the maximum timeframe for urgent reviews back to the 2002 DOL standard of 72 hours. The July 2010 interim regulations had proposed a 24-hour turnaround, which was not practicable.⁵
• Scaling back the reporting requirement of diagnosis and treatment codes when an adverse benefit determination is rendered. Although health plans must still provide this information upon request to a health plan member, it no longer has to be automatically reported.
• A minor infraction of the external review requirements no longer gives the claimant an automatic opt-out of the appeals process.
• The non-English interpretation requirement of using “culturally and linguistically” appropriate language is softened. Now all plans must print notices in the dominant foreign language if 10 percent of the population of a county speaks that language (and not English). Under the previous rules, companies with fewer than 100 employees would have to furnish foreign-language notices in counties where 25 percent of the population spoke the second language.

If your organization is a non-granfathered health plan, self-funded trust fund or employer group or an insurer, you need to comply with PPACA’s external review requirements by January 1, 2012. If you haven’t yet contracted with a URAC-accredited, independent review organization, call us and we will make sure you’re ready in time.