For Immediate Release, November 21, 2000
Contact: Chris Marshall
Department Of Labor Announces New
Health Care Rights For Employees
New ERISA Rule Speeds Up Processing Time For Claims
The Department of Labor today published final regulations in the Federal Register that simplify the claims process for more than 130 million people in employer-based self-insured health plans. These new rules, with an effective date of January 2002, are the first changes to the claims and appeals process since the enactment of the Employee Retirement Income Security Act (ERISA) in 1974. ERISA governs healthcare plans offered by employers that self insure, i.e. firms that use their own funds to cover employee health claims. By self insuring under the federal ERISA law, employers are able to exempt their health plans from state regulation. These rules are therefore an attempt by the Clinton Administration to establish standards for plans that are outside the scope of state law.
The regulations give private-sector employees the right to have their claims resolved more quickly and provide more time to appeal a decision when health plans refuse coverage. These changes are meant to address grievances by enrollees who often wait months for approval of medical procedures and are frustrated by the appeals process.
The new rules instruct health plans to make a decision within 72 hours for initial or pre-service urgent care claims. For non-urgent group health claims, the Department of Labor made a decision to separate time frames for pre-service claims and post-service claims. That is, non-urgent pre-service claims must be resolved within 15 days and post-service claims must be resolved within 30 days. Health plans are allowed one 15-day extension on pre- and post-service claims.
The regulations establish a timeframe for resolving appeals for non-urgent pre-service claims within 30 days and post-service claims within 60 days. Urgent care appeals must be decided within three days. The rules also extend the current 60 day window allowed for healthcare consumers to file a claim to 180 days.
The final rule also provides for:
- A different decision maker to handle appeals, consultation with relevant health care professionals in making decisions about appeals that involve medical judgement;
- enforcement of the claimants rights using the courts;
- timely action on "concurrent care reviews" for patients receiving a course of treatment who face early termination of benefits or have a need to extend treatment;
- more complete disclosure, including a full decision of the plan's claim procedures;
- additional information about the reasons for a denied claim and the criteria and rules applied by the plan.
To access the Department of Labor's final rule covering ERISA-governed health plans in the Federal Register, go to http://www.access.gpo.gov/su_docs/aces/aces140.html and put in 11/21/2000 for Issue Date and use Department of Labor as search terms.
While these new Department of Labor rules will be very helpful to enrollees in ERISA self-insured plans, they will have no effect on individuals who purchase coverage on their own, or workers and their families enrolled in group plans in the "fully-insured" commercial health insurance market. These health plans are regulated by state law. In order to establish national standards for all health plans, Congress must pass legislation governing independent external appeals and other critical access issues such as curbs on the use of restrictive prescription drug formularies. It is expected that in 2001 Congress will again take up the issue of national standards for health plans as part of "Patient Bill of Rights" legislation which stalled at the end of this year's session. For an update on federal "Patient Bill of Rights" legislation, click on: http://www2.nami.org/update/000308.html. To view, NAMI's "Where We Stand" paper on managed care patient protection legislation, click on: http://www2.nami.org/update/unitedbill.html