The Obama administration is attempting to deliver on promises made during the long road to the passage of its mammoth healthcare law, issuing regulations and follow-up legislation targeting perceived bad behavior of health plans as well as imposing discipline in its own agencies.
Keeping a close eye on health plans
New regulations give consumers recourse against rescissions, denials
For one, the White House announced new regulations giving consumers avenues to challenge decisions made by their health plans, delivering on one of several provisions of the Patient Protection and Affordable Care Act aimed at policing the health insurance industry.
The regulations, issued by HHS and the U.S. Labor and Treasury departments, give enrollees in new health plans the right to appeal such actions as rescissions and claims denials through a standardized internal process and also to an independent reviewer.
The regulations encourage states, 44 of which currently provide for some level of external review, to adopt procedures in line with a model law crafted by the National Association of Insurance Commissioners. A federal review will be available to consumers living in a state that doesn’t offer consumers such a process or one that’s deemed inadequate.
“In some states, the person hired to review the case works for the insurance company that denied the claim,” Phyllis Borzi, assistant secretary for the Employee Benefits Security Administration, said in a call with reporters.
The rules apply to any new group or individual plan beginning after September; grandfathered plans are excluded, though many may be subject to appeals requirements of their state insurance departments. The Treasury Department estimates about 40 million consumers will benefit in 2011 and rise to as many as 88 million by 2013.
A spokesman for America’s Health Insurance Plans said the trade group was still reviewing the regulations but noted that the group has supported the NAIC’s model law.
HHS also announced a $30 million grant program available to help states establish or improve programs that help consumers navigate their coverage options and file complaints and appeals.
Ron Pollack, executive director of Families USA, said the money on the table to bolster ombudsman programs will ensure that people are able to take advantage of the new protections. “This is important because, often, when consumers face an adverse health plan decision, they are frail and have difficulty pursuing their rights,” Pollack said in a written statement.
Also last week, President Barack Obama signed into law the Improper Payments Elimination and Recovery Act, which requires that federal agencies conduct annual risk assessments on their vulnerability to improper payments and replicates the recovery-audit contractor model across the government.
The law builds upon recent executive actions the president has taken to reduce government payment errors, which Obama noted in a White House signing ceremony add up to more than the combined budgets of the U.S. Education Department and Small Business Administration (Nov. 23, 2009, p. 6).
In June the president called for the CMS to reduce the error rate in Medicare fee-for-service in half by 2012—calculated last November to be 12.4%, or $35.4 billion—as well as target the problem with new fraud-mapping software credited with success in the disbursement of funds under the American Recovery and Reinvestment Act (June 21, p. 6).
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