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PPACA: The State of Grace

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Federal agencies will be giving employers and health plans until July 1, 2011, to comply with some provisions of the Affordable Care Act.

The arms of the U.S. Department of Health and Human Services (HHS), the U.S. Treasury Department and the U.S. Labor Department responsible for administering the Affordable Care Act — the legislative package that includes the Patient Protection and Affordable Care Act (PPACA) — posted a copy of PPACA grace period guidance Monday, and they also have posted a list of answers to frequently asked questions (FAQS) about PPACA.

The guidance, given in Technical Release Number 2010-02 by the Labor Department’s Employee Benefits Security Administration (EBSA), describes interim procedures for the internal claims and appeals provisions of PPACA.

HHS, the Treasury Department and the Labor Department joined to release interim final regulations for internal and external appeals in July, and the Labor department released external review process procedures designed specifically for employer plans in August.

The new document deals with an employer plan’s internal claims process and does not apply to health insurers, officials say.

Some employers and health coverage issuers say they cannot

get their computers ready to comply with the interim final regulations quickly enough to meet the deadlines in the interim regulations issued in July, which are aimed at insurers as well as plans, Labor Department officials say.

The Labor Department has responded by creating an enforcement grace period that will last until July 1, 2011, to help issuers and plans get their computer systems ready.

The grace period will apply to:

  • Urgent care claims decisions.
  • Provisions requiring plans to provide determination notices in a culturally and linguistically appropriate manner.
  • An internal appeals notice content provision.
  • A substantial compliance provision.

When the urgent care provision takes full effect, it will require health plans to make most decisions about urgent care within 24 hours after receiving a complete, clean claim; today, the Labor Department requires the plans to make the claims within 24 hours.

The substantial compliance provision will permit consumers to seek external reviews, or judicial reviews, if a plan or issuer fails to adhere strictly to its internal claims and appeals process.

The Labor Department and the Internal Revenue Service (IRS), an arm of the Treasury Department, “will not take any enforcement action against a group health plan, and HHS will not take any enforcement action, during the grace period, against a self-funded nonfederal governmental health plan, that is working in good faith to implement such additional standards but does not yet have them in place,” according to officials at the Employee Benefits Security Administration, an arm of the Labor Department.

HHS is encouraging states to provide similar grace periods for state-regulated health insurance, and HHS will not punish a state for failing to substantially enforce the internal appeals provisions in these situations, officials say.

If the grace period did not exist, the internal appeals requirements would have started applying to employer plans Thursday.

The American Benefits Council, Washington, an employers group, is welcoming the technical release.

The new guidance will create an expanded “safe harbor” standard for compliance as well as a grace period, according to James Klein, the council’s president.

“As initially issued, the regulations could not feasibly have been implemented for plan years beginning on or after Sept. 23, 2010,” Klein says. “The new guidance will help ensure that employers and health plans have much-needed additional time to make complex changes in the procedures they use to make accurate and efficient determinations on hundreds of millions of health care claims each year.”

The federal agencies likely will issue more PPACA in early 2011, Klein says.

The American Benefits Council will be working closely with the agencies to try to keep the agencies from imposing costly or undue burdens on employers, Klein says.

Meawnhile, in the FAQs answers, EBSA officials say the Labor Department, the Treasury Department and HHS have received a question about letting some grandfathered group health plans keep grandfathered status — and freedom from some Affordable Care Act requirements — if they change carriers but leave plan provisions roughly the same.

“The departments anticipate that they will shortly address the circumstances under which grandfathered group health plans may change carriers without relinquishing their status as grandfathered health plans,” officials say.

Officials also say a plan may able to show that it is complying with the new internal review and external appeal requirements if it can show that it is meeting the same objectives through somewhat different means, officials say.

In a section on minimum provider payment standards and balance billing for out-of-network emergency services, EBSA officials say a new Affordable Care Act provision prohibiting plans and insurers from imposing out-of-network care penalties for emergency care may affect what the plan or insurer owes but not what the patient owes. The plan insurer may have to pay balance billing amounts in same cases and might be able to avoid making those payments in other cases, but “patients must be provided with adequate and prominent notice of their lack of financial responsibility with respect to such amounts, to prevent inadvertent payment by the patient,” officials say.


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