Clarification of External Review under the Affordable Care Act; Notice No. 2014-11 [44 Pa.B. 6175]
[Saturday, September 27, 2014]To Health Insurance Entities, Including Managed Care Plans:
This notification serves to clarify the Notice published on December 31, 2011 at 41 Pa.B. 7041 (the ''2011 Notice'').
By way of background, the U.S. Department of Health and Human Services issued, on July 29, 2011, its determination that the Commonwealth of Pennsylvania does not meet federal requirements for external review under the Affordable Care Act (ACA). Issuers of health insurance in the Commonwealth are required to comply with Federal law and to be fully participating in a Federally-administered external review process.
In the 2011 Notice, the Pennsylvania Department of Health and Insurance Department (hereinafter ''the Departments'') reminded managed care plans that, while they are required to follow federal law, the requirements of Article XXI of the Insurance Company Law of 1921, commonly referred to as Act 68, remain in effect except to the extent that federal law has replaced those requirements. Thus, as explained in the 2011 Notice, issues of network adequacy, contract review, credentialing, which are dealt with by the Department of Health, and prompt pay, which is dealt with by the Insurance Department, among other matters, will still be reviewed by the relevant department. The Departments will also continue to review, as complaints, matters that are not considered adverse benefit determinations as defined by the ACA,1 in the same manner as before the passage of the ACA.2 However, adverse benefit determinations, as defined by the ACA, will be subject to federal review. As more fully described in the ACA and the accompanying regulations,3 adverse benefit determinations include issues that relate to denials, reductions, terminations or failures to provide or make payment in whole or in part for a benefit.
This Notice clarifies two situations that have come to our attention. First, a ''denial [of] a benefit'' includes a denial of a pre-service authorization involving medical judgment. Second, ''failures to provide or make payment in whole or in part for a benefit'' include circumstances in which a contractual issue relates to the amount of payment, such as, but not limited to, situations in which claimants are getting less than 100% of their claims (including co-pay) paid by their issuers. Accordingly, consumer complaints relating to pre-service authorization denials based on medical judgment, as well as consumer complaints relating to the amount of a payment, should be handled pursuant to the federal external review process the issuer has implemented, and are subject to appropriate notice and appeal rights: either to an external review if involving medical judgment, or to a civil court upon conclusion of the internal appeal process if the complaint does not involve medical judgment. See 45 C.F.R. 147.136(d)(1)(ii)(A) (external review required for adverse benefit decisions involving ''medical necessity, health care setting, level of care, or effectiveness of a covered benefit; or its determination that a treatment is experimental or investigational . . . and . . . a rescission of coverage''); 29 C.F.R. 2560.503-1(c)(2) (health plan may not require more than two levels of review of an ABD before a civil action may be brought); Further information on these issues can be found at http://www.dol.gov/ebsa/faqs/faq_claims_proc_reg.html.
Questions regarding this notice may be directed to Carolyn Morris, Director, Pennsylvania Insurance Department, Bureau of Consumer Services, 1209 Strawberry Square, Harrisburg, PA 17120 or camorris@pa.gov.
MICHAEL F. CONSEDINE,
Insurance Commissioner[Pa.B. Doc. No. 14-2037. Filed for public inspection September 26, 2014, 9:00 a.m.] _______
1 See 45 C.F.R. § 147.136(a)(2)(i), incorporating 29 C.F.R. § 2560.503-1(m)(4) (definition of ''adverse benefit determination.'')
2 Examples of the type of complaints that should continue coming to the PA Departments and not HHS, are complaints relating to contract exclusions, and issues relating to co-payments, formulary changes, out-of-network benefits, and services beyond the contractual limitation.
3 42 U.S.C. § 300gg-19 and 45 C.F.R. Part 147 (health insurance reform requirements for the group and individual health insurance markets).
