The Clinton administration got in some last licks on healthcare reform last week when it issued final rules governing claims processing and review by self-insured employer health plans.
Employers and insurers were quick to criticize the U.S. Labor Department's regulations, saying they will increase costs and litigation by health plan enrollees.
Published in the Nov. 21 Federal Register, the rules impose new requirements on self-insured employer-run healthcare plans governed by the Employee Retirement Income Security Act of 1974, or ERISA. Those plans cover 130 million Americans, but not those who buy health insurance coverage individually.
They follow through on President Clinton's threat last month to use federal regulatory authority should Congress fail to send him managed-care reforms commonly called the "patients' bill of rights," versions of which would apply to all people who buy any type of health insurance (Oct. 16, p. 6).
"This regulation cannot take the place of a strong patients' bill of rights, but it can help," said Leslie Kramerich, acting assistant secretary for the Labor Department's Pension and Welfare Benefits Administration, which oversees employer health plans.
The new regulations take effect on Jan. 1, 2002. Congress could step in to delay or prevent implementation of the rules.
The House and Senate passed differing versions of the legislation in 1999, but a joint conference committee that met on and off over the past 11 months never produced a compromise document.
Most notably, the two versions differed on whether they permitted health plan enrollees to sue for damages resulting from the denial of a covered benefit. The House's legislation allowed lawsuits, but the Senate's did not.
The Labor Department regulations set deadlines for health plans to respond to claims and standards for appeals of claims denials.
Under the regulations, which refine a proposed set of regulations published in September 1998, health plans would have 72 hours to decide whether to cover claims for urgent care, 15 days for services requiring pre-authorization and 30 days for all other services.
When claims are denied, enrollees have up to 60 days to ask the health plan for a review and 180 days to appeal the denial to an outside party. In cases involving medical judgment, the regulations require that the appeal go to a physician or healthcare professional with knowledge of the service in question.
The regulations also require that enrollees only be forced to appeal the decision twice before they can file a federal court lawsuit under ERISA.
Health plans said the regulations will make it too easy to file such lawsuits, however, because it gives them the opportunity to sue immediately for minor departures from the claims processing and review procedure.
"This provision could easily lead to an unwarranted increase in litigation," said James Klein, president of the American Benefits Council, which represents employer health plans.