Proposed Labor Department rules would speed insurers’ UM response times

Some MCOs deny there’s a problem in this area

Slow reimbursement by many managed care organizations is a common complaint among physician practices across the country. But relief may be on the way, thanks to a newly proposed rule from the U.S. Department of Labor. The new rule gives health plans stricter deadlines for telling members and providers whether urgent and experimental medical procedures are covered by the patient’s benefit plan.

Under the rule, managed care organizations would have 72 hours to tell a beneficiary involved in an "urgent care’’ case whether the plan will cover a specific procedure or service that requires precertification before payment is approved. For non-urgent care, the notification deadline is 15 days. Current rules give health plans up to 90 days to notify patients and their physicians of the coverage decision. If coverage is denied, a beneficiary has 180 days to appeal the decision.

If the medical service already has been performed, MCOs have 15 days to tell patients and providers whether the claim is approved or denied, partially or totally, or if it needs more information before making a payment decision.

Plans claim good response time

When it comes to initial benefit determinations, many plans say they already are more responsive than the proposed standard. For instance, Blue Cross & Blue Shield of the National Capital Area, which serves the Washington, DC, metropolitan area, claims it typically decides requests for urgent care coverage within 24 hours of receipt. Meanwhile, requests for non-urgent care generally take two working days to decide.

The new rule could have a major impact on those difficult requests to cover experimental procedures that, in the opinion of the patient’s physician, may be the only chance to save the patient’s life

"Decisions for this kind of treatment often take longer to make since the HMO or insurer generally wants to perform a thorough review of the patient’s past treatments and their response," says Tracy Cassidy, a consultant in William M. Mercer’s Washington, DC, office.

Many experts also expect a fight over the Labor Department’s requirement that health care plans notify participants within 15 days whether they will cover a claim for a service that already has been performed.

"That time frame may be unrealistic, especially during certain times of the year when the number of claims to be processed tends to be particularly heavy," says Jane Galvin, director of managed care for the Health Insurance Association of America in Washington, DC. "These are pretty tight deadlines,’’ agrees John Piro, a consultant with Hewitt Associates in Rowayton, CT.

Another area of potential controversy involves the extended set of patient appeal rights when it comes to plans’ medical decisions. Under this provision, the parties reviewing the appeal cannot be affiliated with same party that made the original decision or a subordinate.

The regulations, however, are not clear on who the "party’’ is that made the initial coverage decision. It could, for example, mean the actual individual who made the decision, or possibly the unit that person is in.

"This will be an area of some controversy,’’ said Henry Saveth, JD, a Mercer attorney in Washington, DC.

What is meant by pertinent documents’?

Another problem area, benefit experts say, is a provision giving participants access to "pertinent documents.’’ Participants would be entitled to review all documents, records, and information relevant to their claims for benefits. That information would include internal rules, guidelines, protocols, and criteria under which the plan is operated.

In situations where a patient is suing because coverage for a procedure was denied, the Labor Department is considering amending the final regulation to require participants to be entitled to receive "reasonable access and copies of all documents relating to previous claims involving the same diagnosis and treatment that were decided within five years of the previous adverse benefit determination.’’

This provision has some employer and patient groups worried that requiring plans to disclose information on how prior claims with a similar diagnosis were handled could violate the privacy of those other beneficiaries.

For instance, even if the names of other beneficiaries were blacked out, their identities could be determined in some cases, especially at smaller firms. "The question is, how you do you provide information without violating an employee’s right to privacy?’’ asks Paul Dennett, vice president for health policy at the Association of Private Pension & Welfare Plans in Washington, DC.

After reviewing provider and plan comments on the proposed rule, the Labor Department will issue a revised final rule, which is expected to go into effect as early as next summer.