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No. The regulation establishes requirements only for
employee benefit plans that are covered under ERISA. See ERISA sections
3(1) and 3(2). Such plans are typically benefit programs provided by
private-sector employers for their employees (or by unions, acting either
independently or jointly with employers, for their members). Government
programs, whether federal, state, or local, that are not related to
employment, such as Medicaid and Medicare, are not covered by these claims
procedure rules; neither are government-sponsored benefit programs for
governmental employees, such as the FEHBP or benefit plans provided by
state or local governments to their own employees. Such plans have their
own specific rules for claims procedures, which may derive from other
federal law (for federal programs) or from state or local law.
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The regulation applies only to benefits provided under
an ERISA plan that are outside the scope of what is regulated by the
Medicare program. Benefits provided under ERISA plans vary from plan to
plan based on plan design. When a benefit is provided under an ERISA plan
pursuant to a separate group arrangement between the Medicare + Choice
organization and the employer (or employee organization), even though the
benefit is only available to enrollees in a Medicare + Choice program, we
have been advised by HHS that the benefit would be outside the scope of
what is regulated by the Medicare program. Claims for such benefits would
be subject to the provisions of the regulation. The primary source of
information about these ERISA benefits is the summary plan description for
the plan, which is available on request from the plan administrator. On
the other hand, benefits that are covered under a Medicare + Choice
contract (whether they are Medicare benefits, additional
benefits paid for by Medicare, or supplemental benefits
paid for through a premium charged to all enrollees) are subject to the
Medicare + Choice rules for organization determinations, appeals, and
grievances under 42 CFR 422 and not the provisions of the regulation. See
question A-1. A person who is covered by a Medicare + Choice program
and wants more information on how these Medicare + Choice rules apply to
his or her coverage should call 1.800.Medicare. He or she may also want to
consult their Medicare Regional Office and 1.800.Medicare can assist them
in contacting the appropriate office.
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The regulation applies to coverage determinations only
if they are part of a claim for benefits. The regulation, at §
2560.503-1(e), defines a claim for benefits, in part, as a
request for a plan benefit or benefits made by a claimant in accordance
with a plan’s reasonable procedure for filing benefit claims. A claim
for group health benefits includes pre-service claims (§
2560.503-1(m)(2)) and post-service claims (§ 2560.503-1(m)(3)). If
an individual asks a question concerning eligibility for coverage under a
plan without making a claim for benefits, the eligibility determination is
not governed by the claims procedure rules. If, on the other hand, the
individual files a claim for benefits in accordance with the plan’s
reasonable procedures, and that claim is denied because the individual is
not eligible for coverage under the plan, the coverage determination is
part of a claim and must be handled in accordance with the claims
procedures of the plan and the requirements of the regulation. See 65 FR
at 70255.
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No. If the plan does not require prior approval for the
benefit or service with respect to which the approval is being requested,
the request is not a claim for benefits (§ 2560.503-1(e)) governed
by the regulation. The regulation defines pre-service claim by
reference to the plan’s requirements, not the claimant’s decision to
seek the medical care, nor the doctor’s decision to provide care. Thus,
in the absence of any plan requirement for prior approval, mere requests
for advance information on the plan’s possible coverage of items or
services or advance approval of covered items or services do not
constitute pre-service claims under the regulation. See §
2560.503-1(m)(2).
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No. The regulation does not govern casual inquiries
about benefits or the circumstances under which benefits might be paid
under the terms of a plan. On the other hand, a group health plan that
requires the submission of pre-service claims, such as requests for
preauthorization, is not entirely free to ignore pre-service inquiries
where there is a basis for concluding that the inquirer is attempting to
file or further a claim for benefits, although not acting in compliance
with the plan’s claim filing procedures. In such a case, the regulation
requires the plan to inform the individual of his or her failure to file a
claim and the proper procedures to be followed. Specifically, this type of
notification is required where there is a communication by a claimant or
authorized representative (e.g., attending physician) that is received by
a person or organizational unit customarily responsible for handling
benefit matters (e.g., personnel office) and that communication names the
specific claimant, specific medical condition or symptom and a specific
treatment, service, or product for which approval is requested. Under the
regulation, notice must be furnished as soon as possible, but not later
than 24 hours in the case of urgent care claims or 5 days in the case of
non-urgent claims. Notice may be oral, unless a written notification is
requested. See § 2560.503-1(c)(1).
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Yes, in both cases. The regulation defines group health plan as an employee welfare benefit plan within the meaning of ERISA section 3(1) to the extent that such plan provides medical care within the meaning of section 733(a) of ERISA. See § 2560.503-1(m)(6). Section 733(a)(2) defines medical care, in part, to mean the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body. Accordingly, for purposes of the claims procedure rules, the provision of dental benefits, either as part of a larger welfare plan, or as a stand-alone plan, would be subject to the requirements of the regulation applicable to group health plans. |
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Yes, in both cases. Prescription drug benefits would,
like dental benefits, constitute medical care within the meaning of
Section 733(a)(2). See question A-6. Accordingly, the provision of
prescription drug benefits, either as a stand-alone plan, or as part of a
group health plan, would be subject to the requirements of the regulation
applicable to group health plans. Whether, and under what circumstances,
specific practices permitted under the plan, such as the submission of a
prescription to a pharmacy or pharmacist, will constitute a claim for
benefits governed by the claims procedure rules will depend on the terms
of the plan. |
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No, provided that the contractual dispute will have no
effect on a claimant’s right to benefits under a plan. The regulation
applies only to claims for benefits. See questions A-3, A-4, A-5.
The regulation does not apply to requests by health care providers for
payments due them -- rather than due the claimant -- in accordance with
contractual arrangements between the provider and an insurer or managed
care organization, where the provider has no recourse against the claimant
for amounts, in whole or in part, not paid by the insurer or managed care
organization.
The following example illustrates this principle. Under
the terms of a group health plan, participants are required to pay only a
$10 co-payment for each office visit to a preferred provider doctor listed
by a managed care organization that contracts with such doctors. Under the
preferred provider agreement between the doctors and the managed care
organization, the doctor has no recourse against a claimant for amounts in
excess of the co-payment. Any request by the doctor to the managed care
organization for payment or reimbursement for services rendered to a
participant is a request made under the contract with the managed care
organization, not the group health plan; accordingly, the doctor’s
request is not a claim for benefits governed by the regulation.
On the other hand, where a claimant may request
payments for medical services from a plan, but the medical provider will
continue to have recourse against the claimant for amounts unpaid by the
plan, the request, whether made by the claimant or by the medical provider
(e.g., in the case of an assignment of benefits by the claimant) would
constitute a claim for benefits by the claimant. For information on
authorized representatives of claimants. See questions B-1,
B-2, B-3.
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A benefit is a disability benefit under the regulation, subject to the special rules for
disability claims, if the plan conditions its availability to the claimant
upon a showing of disability. It does not matter how the benefit is
characterized by the plan or whether the plan as a whole is a pension plan
or a welfare plan. If the claims adjudicator must make a determination of
disability in order to decide a claim, the claim must be treated as a
disability claim for purposes of the regulation. As the department
stated in the preamble to the regulation, 65 FR at 70247, n.4, where a
single plan provides more than one type of benefit, it is the
department’s intention that the nature of the benefit should determine
which procedural standards apply to a specific claim, rather than the
manner in which the plan itself is characterized. Accordingly, plans,
including pension plans, that provide benefits conditioned upon a
determination of disability must maintain procedures for claims involving
such benefits that comply with the requirements of the regulation
applicable to disability claims, including the requirements for de novo
review, the consultation requirement for medical judgments, the limit on
appeal levels, the time limits for deciding disability claims, and the
disclosure requirements in connection with extensions of time.
However, if a plan provides
a benefit the availability of which is conditioned on a finding of
disability, and that finding is made by a party other than the plan for
purposes other than making a benefit determination under the plan, then
the special rules for disability claims need not be applied to a claim for
such benefits. For example, if a pension plan provides that pension
benefits shall be paid to a person who has been determined to be disabled
by the Social Security Administration or under the employer’s long term
disability plan, a claim for pension benefits based on the prior
determination that the claimant is disabled would be subject to the
regulation’s procedural rules for pension claims, not disability claims.
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No. While the regulation establishes time frames within
which claims must be decided, the regulation does not address the periods
within which payments that have been granted must be actually paid or
services that have been approved must be actually rendered. Failure to
provide services or benefit payments within reasonable periods of time
following plan approval, however, may present fiduciary responsibility
issues under Part 4 of title I of ERISA. |
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No. As indicated in question A-7, whether, and under
what circumstances, specific practices permitted under a plan, such as the
presentation of a prescription to a pharmacy, will constitute a claim for
benefits governed by the claims procedure rules will depend on the terms
of the plan. In this regard, a claim for benefits is defined in §
2560.503-1(e) to mean a request for a plan benefit or benefits made by
a claimant in accordance with a plan’s reasonable procedure for filing
benefit claims. Accordingly, whether, and to what extent, the
presentation of a prescription to a pharmacy which exercises no discretion
on behalf of the plan will constitute a request for a plan benefit will be
determined by reference to the plan’s procedures for filing benefit
claims.
It is not uncommon for group health plans to have
arrangements with preferred or network providers (e.g., doctors, physical
therapists, pharmacies, optometrists) to provide medical care-related
services or products at a predetermined cost to covered plan participants
and with respect to which the providers exercise no discretion on behalf
of the plan. It is the view of the department that neither the statute nor
the claims procedure regulation requires that a plan treat interactions
between participants and preferred or network providers under such
circumstances as a claim for benefits governed by the regulation.
Moreover, if the pharmacy refuses to fill the prescription absent payment
of the entire cost by the participant, the regulation does not require
that this refusal be treated as an adverse benefit determination under the
regulation. It should be noted, however, that where a plan provides such
benefits the plan must maintain a reasonable procedure, in accordance with
the regulation, for processing claims of participants relating to such
benefits.
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Yes. The regulation establishes requirements for all
employee benefit plans that are covered under Part 5 of ERISA, which would
include top hat plans. Certain top hat plans are specifically
excluded from parts of ERISA (see, e.g., sections 201(2); 301(a)(3);
401(a)(1)), but that exclusion does not apply to section 503, under which
the regulation was promulgated. In this regard, paragraph (b)(2) of the
regulation requires that a description of the plan’s claims procedures
must be included as part of the plan’s summary plan description meeting
the requirements of 29 CFR § 2520.102-3. Where a top hat plan is not
required to furnish summary plan descriptions, pursuant to 29 CFR §§
2520.104-23 or 2520.104-24, such plan may satisfy the requirements of
paragraph (b)(2) of the regulation by taking steps reasonably designed to
ensure that participants in such plans are made aware of the existence of
the plan’s claims procedures in conjunction with enrollment in the plan
and how to obtain such procedures upon request.
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Yes. A benefit is a disability benefit under the
regulation, subject to the special rules for disability claims, if the
plan conditions availability of the benefit on a showing of disability. As
noted in question A-9, however, if a plan provides a benefit the
availability of which is conditioned on a finding of disability, and that
finding is made by a party other than the plan for purposes other than
making a benefit determination under the plan, then the special rules for
disability claims need not be applied to a claim for such benefits. The
department notes that the inclusion of a premium waiver in a plan that is
not otherwise covered by ERISA would not, in and of itself, cause the plan
to become subject to the regulation.
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Yes, with one exception. The regulation provides that a
reasonable claims procedure may not preclude an authorized representative
of a claimant from acting on behalf of a claimant with respect to a
benefit claim or appeal of an adverse benefit determination. The
regulation also provides, however, that a plan may establish reasonable
procedures for determining whether an individual has been authorized to
act on behalf of the claimant. Completion of a form by the claimant
identifying the authorized representative would be one method for making
such a determination.
The one exception is where a claim involves urgent
care. In such instances, a plan must, without regard to the plan’s
procedures for identifying authorized representatives, permit a health
care professional with knowledge of the claimant’s medical condition
(e.g., a treating physician) to act as the authorized representative of
the claimant. This exception is intended to enable a health care
professional to pursue a claim on behalf of a claimant under circumstances
where, for example, the claimant is unable to act on his or her own
behalf. See § 2560.503-1(b)(4). |
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No. An assignment of benefits by a claimant is
generally limited to assignment of the claimant’s right to receive a
benefit payment under the terms of the plan. Typically, assignments are
not a grant of authority to act on a claimant’s behalf in pursuing and
appealing a benefit determination under a plan. In addition, the validity
of a designation of an authorized representative will depend on whether
the designation has been made in accordance with the procedures
established by the plan, if any. |
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Nothing in the regulation precludes a plan from
communicating with both the claimant and the claimant’s authorized
representative. However, it is the view of the department that, for
purposes of the claims procedure rules, when a claimant clearly designates
an authorized representative to act and receive notices on his or her
behalf with respect to a claim, the plan should, in the absence of a
contrary direction from the claimant, direct all information and
notifications to which the claimant is otherwise entitled to the
representative authorized to act on the claimant’s behalf with respect
to that aspect of the claim (e.g., initial determination, request for
documents, appeal, etc.). In this regard, it is important that both
claimants and plans understand and make clear the extent to which an
authorized representative will be acting on behalf of the claimant. |
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The department did not intend to prescribe any
particular process or safeguard to ensure and verify consistent decision
making by plans. To the contrary, the department intended to preserve the
greatest flexibility possible for designing and operating claims
processing systems consistent with the prudent administration of a plan.
The department believes that prudent plan administration requires ensuring
that similarly situated claims are, under similar circumstances, decided
in a consistent manner. Consistency in the benefit claims determinations
might be ensured by applying protocols, guidelines, criteria, rate tables,
fee schedules, etc. Consistent decision making might be ensured and
verified by periodic examinations, reviews, or audits of benefit claims to
determine whether the appropriate protocols, guidelines, criteria, rate
tables, fee schedules, etc. were applied in the claims determination
process. See § 2560.503-1(b)(5). |
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What documents will be required to be disclosed will
depend on the particular processes and safeguards that a plan has
established and maintains to ensure and verify appropriately consistent
decision making. See 65 FR at 70252. The department does not anticipate
new documents being developed solely to comply with this disclosure
requirement. Rather, the department anticipates that claimants who request
this disclosure will be provided with what the plan actually used, in the
case of the specific claim denial, to satisfy this requirement. The plan
could, for example, provide the specific plan rules or guidelines
governing the application of specific protocols, criteria, rate tables,
fee schedules, etc. to claims like the claim at issue, or the specific
checklist or cross-checking document that served to affirm that the plan
rules or guidelines were appropriately applied to the claimant’s claim.
Plans are not required to disclose other claimants’ individual records
or information specific to the resolution of other claims in order to
comply with this requirement. See § 2560.503-1(m)(8)(iii). See
question D-12. |
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No. The regulation is intended to regulate pre-dispute
arbitration only with respect to group health and disability benefits
provided under ERISA-covered plans. The regulation is not intended to
affect the enforceability of a pre-dispute arbitration agreement with
respect to any other claims or disputes. Accordingly, the regulation
should not be read to affect the obligation of a participant or
beneficiary to arbitrate such other claims and disputes within the scope
of the arbitration agreement. See 29 CFR § 2560.503-1(c)(3)(iii).
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The time for making an initial claims decision begins
to run when the claim is filed in accordance with a plan's reasonable
filing procedures, regardless of whether the plan has all of the
information necessary to decide the claim at the time of the filing.
For purposes of calculating the time period within
which a claim must be decided, a plan cannot extend the time period by
treating as filed only those claims with respect to which all the
information necessary to make a decision has been submitted (often
referred to as clean claims). See § 2560.503-1(f)(4).
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Plans have considerable flexibility in defining the
procedures to be followed for the initiation, processing, and appeal of
benefit claims. However, while plans may require the submission of
specific information necessary to a benefit determination under the terms
of the plan, including medical and coordination of benefit
information, the plan may nonetheless have to make a decision on the claim
before receiving such information. As noted in question C-1, the time
periods applicable to deciding claims begin to run on the date a claim is
filed in accordance with reasonable procedures of the plan, without regard
to whether all the information necessary to make a benefit determination
accompanies the filing. See § 2560.503-1(f)(4). |
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In general, a group health plan may unilaterally extend
the decision making on both pre-service and post-service claims for 15
days after the expiration of the initial period, if the administrator
determines that such an extension is necessary for reasons beyond the
control of the plan. There is no provision for extensions in the case of
claims involving urgent care.
If the reason for taking the extension is the failure
of the claimant to provide information necessary to decide the claim, and
the claimant is so notified of this fact, the time period for making the
decision is suspended (tolled) from the date of the notification to
the claimant to the earlier of:
The extension period (15 days) – within which a
decision must be made by the plan – will begin to run from the date on
which the claimant’s response is received by the plan (without regard to
whether all of the requested information is provided) or, if earlier, the
due date established by the plan for furnishing the requested information
(at least 45 days). See §§ 2560.503-1(f)(2)(iii) (A) and (B);
2560.503-1(f)(4); 2560.503-1(i)(4). Also see 65 FR at 70250, n.21.
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The regulation’s time limits begin to run when a
claim is filed in accordance with the reasonable procedures of the plan
for filing claims. See question C-1. A plan that requires a physical
or other examination of the claimant to evaluate a claim must design a
process that provides for decision making within the time frames of the
regulation.
If necessary, however, in the circumstances of a
specific claim, a plan may take an extension of time to enable the
claimant to submit requested information (including the report of a
required examination). The regulation’s provisions on extensions of time
and tolling, discussed in question C-3, would apply to these situations to
determine when an extension is permitted and when an extension would begin
and end. Under those rules, when a plan takes an extension of time because
additional information must be obtained from a claimant, the claimant must
be provided at least 45 days within which to provide the information or
submit to the requested examination. Plans may, of course, provide
claimants longer periods of time for this purpose.
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Yes. The only limits on extensions of time established
by the regulation are imposed on plans. Claimants may voluntarily agree to
provide a plan additional time within which to make a decision on a claim,
even under circumstances where the plan could not unilaterally extend the
decision making period, such as in the case of a claim involving urgent
care or a claim on appeal.
See §§ 2560.503-1(f)(2)(i); 2560.503-1(i). Also see
65 FR at 70250, n.21.
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A plan has a duty to make this determination on the
basis of the information provided by, or on behalf of, the claimant. A
claim involving urgent care is any claim for medical care or treatment
with respect to which the application of the time periods for making
non-urgent care determinations could seriously jeopardize the life or
health of the claimant or the claimant’s ability to regain maximum
function, or -- in the opinion of a physician with knowledge of the
claimant’s medical condition -- would subject the claimant to severe
pain that cannot be adequately managed without the care or treatment that
is the subject of the claim.
In determining whether a claim involves urgent care,
the plan must apply the judgment of a prudent layperson who possesses an
average knowledge of health and medicine. However, if a physician with
knowledge of the claimant’s medical condition determines that a claim
involves urgent care, the claim must be treated as an urgent care claim.
See § 2560.503-1(m)(1).
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Yes. While the department has indicated that the time
periods for decision making are generally maximum periods and not
automatic entitlements, the department recognizes that assessments of the
appropriate timeframe for making benefit determinations will, in large
part, be dependent on the information provided by the claimant. Requesting
specific information from the claimant regarding whether and what medical
circumstances exist that may give rise to a need for expedited processing
of the claim would appear to facilitate claims processing and, therefore,
would not, in the view of the department, be an unreasonable plan request.
If, on the other hand, the plan believes based on its own review of the
claim that expedited processing is required, it is the view of the
department that the claim must be processed on an expedited basis without
regard to the claimant’s failure to provide information relating to
whether expedited processing is necessary. |
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Under the concurrent care provisions of the rule,
any request that involves both urgent care and the extension of a course
of treatment beyond the period of time or number of treatments previously
approved by the plan must be decided as soon as possible, taking into
account the medical exigencies, and notification must be provided to the
claimant within 24 hours after receipt of the claim, when the request is
made at least 24 hours prior to the expiration of the prescribed period of
time or number of treatments. If such a request is not made at least 24
hours prior to the expiration of the prescribed period of time or number
of treatments, the request must be treated as a claim involving urgent
care and decided in accordance with the urgent care claim timeframes,
i.e., as soon as possible, taking into account the medical exigencies, but
not later than 72 hours after receipt. See § 2560.503-1(f)(2)(i) and (ii)
(B).
If a request to extend a course of treatment beyond the
period of time or number of treatments previously approved by the plan
does not involve urgent care, the request may be treated as a new benefit
claim and decided within the timeframe appropriate to the type of claim,
i.e., as a pre-service claim or a post-service claim. §
2560.503-1(f)(2)(iii).
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No. Under the concurrent care provisions of the
rule, any reduction or termination of a course of treatment (other than by
plan amendment) before the end of the previously approved period or number
of treatments is treated as an adverse benefit determination. In such
cases the rule requires that the plan administrator provide the claimant
sufficient advance notice of the reduction or termination to allow the
claimant to appeal and obtain a determination before the benefit is
reduced or terminated. Generally, claimants must be afforded at least 180
days following an adverse benefit determination to appeal that
determination. If the 180 day rule applied to appeals under
concurrent care provisions of the regulations, notifications of reductions
or terminations would, in every instance, have to be given at least six
months in advance of the termination or reduction. This was not the
intention of the department. Accordingly, while the department is of the
view that plans must afford claimants a reasonable period of time within
which to develop their appeal of a proposed reduction or termination,
plans are not required to assume that claimants will need the full 180
days to file such an appeal before the benefit can be reduced or
terminated under the special rules governing concurrent care claims. See
§ 2560.503-1(f)(2)(ii) (A). |
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Post-service claims are those claims with respect
to which plan approval is not a prerequisite to obtaining medical services
and payment is being requested for medical care already rendered to the
claimant. Accordingly, a post-service claim would never constitute a claim
involving urgent care within the meaning of the regulation.
A post-service claim is defined in the regulation as
any claim for a benefit under a group health plan that is not a
pre-service claim. Pre-service claims are those claims with respect to
which the terms of the plan condition receipt of the benefit, in whole or
in part, on approval of the benefit in advance of obtaining medical care.
See question C-6, § 2560.503-1(m)(1), (2), and (3).
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No. The nature of a claim or a request for review of an
adverse benefit determination should be judged as of the time the claim or
review is being processed. If requested services have already been
provided between the time the claim was denied and a request for review is
filed, the claim no longer involves urgent care because use of the
post-service time frames for deciding the appeal could not jeopardize the
claimant's life, health, or ability to regain maximum function, or subject
the claimant to severe pain. See § 2560.503-1(m)(1). |
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Under the regulation, an adverse benefit determination generally includes any denial, reduction, or termination
of, or a failure to provide or make payment (in whole or in part) for, a
benefit. In any instance where the plan pays less than the total amount of
expenses submitted with regard to a claim, while the plan is paying out
the benefits to which the claimant is entitled under its terms, the
claimant is nonetheless receiving less than full reimbursement of the
submitted expenses. Therefore, in order to permit the claimant to
challenge the plan’s calculation of how much it is required to pay, the
decision is treated as an adverse benefit determination under the
regulation. Providing the claimant with the required notification of
adverse benefit determination will give the claimant the information
necessary to understand why the plan has not paid the unpaid portion of
the expenses and to decide whether to challenge the denial, e.g.,
the failure to pay in full. This approach permits claimants to
challenge whether, for example, the plan applied the wrong co-payment
requirement or deductible amount. The fact that the plan believes that a
claimant’s appeal will prove to be without merit does not mean that the
claimant is not entitled to the procedural protections of the rule. This
approach to informing claimants of their benefit entitlements with respect
to specific claims, further, is consistent with current practice, in which
Explanation of Benefits forms routinely describe both payable and
non-payable portions of claim-related expenses. See § 2560.503-1(m)(4). |
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In the case of urgent care claims and pre-service
claims, the regulation requires that claimants be apprised of the plan’s
benefit determination, whether the determination is adverse or a complete
grant. The rules require that this notification be furnished in accordance
with the timeframes generally applicable to urgent care and pre-service
claims. There is no specific notification requirement applicable to
post-service claims that are fully granted. See § 2560.503-1(f)(2)(i) and
(iii). |
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The regulation does not specify the information that
must be provided in notices of benefit determinations that are not
adverse. However, in accordance with the regulation’s general
requirement of reasonableness, the department anticipates that such
notices will contain sufficient information to fully apprise the claimant
of the plan’s decision to approve the requested benefits. See §
2560.503-1(f)(2)(i) and (iii) (A). |
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No. Provided that the plan complied with the regulation
in adequately notifying the claimant regarding the scope of the benefit
that was originally approved (e.g., for how long, how many treatments,
etc.) and further provided that the plan has not decided to reduce or
terminate early the course of treatment that was previously approved, the
regulation does not require the plan to provide a formal notification that
the course of treatment is coming to an end. See § 2560.503-1(f)(2)(ii). |
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No. The regulation provides that if an internal rule,
guideline, protocol, or similar criterion was relied upon in making an
adverse benefit determination, the notification of the adverse benefit
determination must either set forth the rule, guideline, protocol, or
criterion or indicate that such was relied upon and will be provided free
of charge to the claimant upon request. It would be sufficient, in the
view of the department, in such a case, to indicate that an internal rule,
etc., had been relied upon without specifying the identity of the specific
rule and that the specific rule, etc. would be furnished to the claimant
upon request. A notice that merely indicates, however, that a rule,
guideline, protocol, or similar criterion may have been relied upon does
not provide the claimant any specific information about the basis on which
his or her claim was decided. Inasmuch as plans will know in every
instance what rules, protocols, guidelines, etc. were relied upon in
making a determination, providing an indication whether such was relied
upon should not be difficult. Moreover, the department is concerned that
the routine inclusion of such a statement in all adverse benefit
determination notifications may undermine the significance of the required
disclosure. See § 2560.503-1(g)(1)(v) (A). For similar reasons, a general
statement in an adverse benefit determination notice would not be
considered as satisfying the requirements of § 2560.503-1(g)(1)(v) (B).
Also see § 2560.503-1(j)(5)(i) and (ii). |
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Yes. It is the view of the department that where a
rule, guideline, protocol, or similar criterion serves as a basis for
making a benefit determination, either at the initial level or upon
review, the rule, guideline, protocol, or criterion must be set forth in
the notice of adverse benefit determination or, following disclosure of
reliance and availability, provided to the claimant upon request. However,
the underlying data or information used to develop any such rule,
guideline, protocol, or similar criterion would not be required to be
provided in order to satisfy this requirement. The department also has
taken the position that internal rules, guidelines, protocols, or similar
criteria would constitute instruments under which a plan is established
or operated within the meaning of section 104(b)(4) of ERISA and, as
such, must be disclosed to participants and beneficiaries. See §§
2560.503-1(g)(v) (A) and (j)(5)(i); 65 FR at 70251. Also see §§
2560.503-1(h)(2)(iii) and 2560.503-1(m)(8)(i); Advisory Opinion 96-14A
(July 31, 1996). |
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Yes. Under the regulation, an adverse benefit
determination includes any denial, reduction, or termination of a
benefit. Accordingly, where a plan terminates the payment of disability
benefits under such circumstances, the plan is required to provide the
claimant a notification of adverse benefit determination and the right to
appeal that determination consistent with the regulation. See 29 CFR §
2560.503-1(m)(4), (g) and (h). If, on the other hand, a plan provides for
the payment of disability benefits for a pre-determined, fixed period
(e.g., a specified number of weeks or months or until a specified date),
the termination of benefits at the end of the specified period would not
constitute an adverse benefit determination under the regulation. Any
request by a claimant for payment of disability benefits beyond the
specified period, therefore, would constitute a new claim. See 29 CFR §
2560.503-1(f)(3). Also see 29 CFR § 2560.503-1(f)(2)(ii).
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No. The regulation does not contain any specific rules
governing the period of time that must be given to claimants to file their
claims. However, a plan’s claim procedure nonetheless must be reasonable
and not contain any provision, or be administered in any way, that unduly
inhibits or hampers the initiation or processing of claims for benefits.
Adoption of a period of time for filing claims that serves to unduly limit
claimants’ reasonable, good faith efforts to make claims for and obtain
benefits under the plan would violate this requirement. See 29 CFR §
2560.503-1(b)(3).
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The regulation addresses two situations in which a plan
may have an extension of time for making a disability benefit
determination. The first situation is when a decision cannot be rendered
due to any matter beyond the control of the administrator other than the
need for additional information from the claimant. In this situation, the
extension period is added to the period within which the determination is
required to be made. For example, if prior to the end of the initial
45-day period, the administrator determines that, for reasons beyond its
control, a decision cannot be rendered, the plan may take up to an
additional 30 days (i.e., 30 days in addition to the initial 45-day
period). Similarly, if a decision cannot, for similar reasons, be rendered
within the initial extension period, the plan may take up to an additional
30 days (i.e., 30 days in addition to the initial 30-day extension period)
or up to a total of 105 days to decide the pending claim. See 29 CFR §
2560.503-1(f)(3). The second situation is when the plan requires
additional information from the claimant to make a benefit determination.
This situation is governed by the principles in question C-3.
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No. The provisions governing extensions of time are
permissive and not mandatory. As such, plans may provide for taking
extensions of time or not, and plan administrators may be given the
discretion to decide whether to take an extension of time in connection
with any individual claim. Consequently, as a general matter, a plan may
deny claims at any point in the administrative process on the basis that
it does not have sufficient information; such a decision would allow the
claimant to advance to the next stage of the claims process.
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Yes. If the notice clearly states that the claim will
be denied if the claimant fails to submit any information in response to
the plan’s request, it is the view of the department that the furnishing
of a combined notice would not be contrary to the regulation, provided
that the combined notice satisfied the content requirements applicable to
both the extension notice and the notice of adverse benefit determination.
In this regard, the notice of adverse benefit determination should make
clear that the period for appealing the denied claim begins to run at the
end of the period prescribed in the notice for submitting the requested
information (or such later date as may be provided under the terms of the
plan). See 29 CFR § 2560.503-1(f)(2) and (3).
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Yes, with one exception. The regulation provides that a
plan’s claims procedure must provide a claimant with a reasonable
opportunity for a full and fair review of a denied claim. A claims
procedure that requires requests for reviews of adverse benefit
determinations to be made in writing would not be unreasonable in that
regard, except with respect to claims involving urgent care. In the case
of urgent care claims, the regulation requires that a plan’s procedures
permit requests for expedited appeals to be submitted orally or in writing
by the claimant. See § 2560.503-1(h)(2) and (3)(vi). |
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Yes. The only limitation that the rule imposes on who
can serve as the named fiduciary for purposes of reviewing adverse benefit
determinations is that the named fiduciary cannot be either the individual
who made the initial benefit determination that is the subject of the
appeal or a subordinate of that individual. The rule further requires that
the reviewer, whoever that individual is, may not afford deference to the
initial determination. That is, the reviewer must consider the full record
of the claim and make an independent decision on whether it should be
granted. See § 2560.503-1(h)(3)(ii). |
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Where a plan provides for two levels of review on
appeal, it is the view of the department that the second level of review
is subject to the same standards that apply to the first level of review.
For example, the second-level reviewer may not afford deference to the
decision at the first level of review, and the reviewer must not be the
same person who made the first level review decision on the claim or a
subordinate of that person. See §§ 2560.503-1(c)(2) and
2560.503-1(h)(3)(ii). |
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In the case of pre-service claims, a maximum of 15 days
is provided for a benefit determination at each level. In the case of
post-service claims, a maximum of 30 days is provided for a determination
at each level. See § 2560.503-1(i)(2)(ii) and (iii).
For example, if a claimant appeals a pre-service
adverse benefit determination, and the plan provides for two levels of
review at the appeal level, the plan must make a determination within a
reasonable period of time, taking into account the medical circumstances,
but no later than 15 days after receipt of the appeal. If that claim is
again denied at the first level of appeal and the claimant appeals that
denial to the second level review stage, the plan must again make a
determination within a reasonable period of time, taking into account the
medical circumstances, but not later than 15 days after the plan’s
receipt of the claimant’s second level appeal request.
In the case of urgent care claims, the regulation does
not prescribe any specific period within which a determination must be
made at each level of a two-level review process for such claims. Given
the principles underlying the provisions governing pre- and post-service
claims, however, it is the view of the department that each level of
review of an urgent care claim would have to be completed in sufficient
time to ensure that the total period for completing the reviews would not
exceed the maximum period otherwise applicable to a process with only one
level of review – as soon as possible, taking into account the medical
exigencies, but not longer than 72 hours. See § 2560.503-1(i)(2)(i).
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Under the regulation, claimants must be afforded at
least 180 days following receipt of an adverse benefit determination to
appeal that determination. In the case of a plan with a two-level review
process, the 180-day rule applies to the period to be afforded claimants
to appeal to the first review level. While the regulation does not
specifically address the period of time to be afforded claimants to pursue
the second level of review, the regulation requires that a plan’s
procedures must nonetheless be reasonable and, therefore, it is the view
of the department that plans must afford claimants a reasonable
opportunity to pursue a full and fair review at the second review level.
See § 2560.503-1(h)(1) and (3)(i). |
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Yes. A plan’s procedures may provide for arbitration
of benefit disputes at one of the two levels of appeal, provided two
conditions are met. First, the arbitration must be conducted in a manner
that will ensure that the timeframes and notice requirements otherwise
applicable to appeals will be satisfied. Second, the arbitration must be
non-binding – that is, the arbitration may not limit the claimant’s
ability to challenge the benefit determination in court. See §
2560.503-1(c)(4). The regulation also permits a plan to offer binding
arbitration to a claimant after completion of the plan’s appeal process.
See questions E-1and E-2 |
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Yes, under limited circumstances. In general, the
regulation permits plans to maintain two levels of review for adverse
benefit determinations and establishes special timing rules for making
benefit decisions at each level of the review process. See §§
2560.503-1(c)(2), 2560.503-1(i)(2)(ii) and (iii), 2560.503-1(i)(3). The
regulation also provides special timing rules applicable to boards of
trustees or committees of multi-employer group health plans and
multi-employer disability benefit plans, pursuant to which such plans are
excepted from the otherwise applicable timing requirements. Under these
rules, such boards or committees generally are permitted to defer the
decisions on adverse benefit determination appeals until the next
regularly scheduled meeting of the plan’s board or committee. See §§
2560.503-1(i)(2)(iii) (B), 2560.503-1(i)(3)(ii). It is the view of the
department that a multi-employer group health plan or a disability benefit
plan could not, in a manner consistent with the regulation, rely on both
the special rules governing the maintenance of two appeal levels and the
special rules for regularly scheduled boards of trustees or committee
meetings. On the other hand, the department does not believe a
multi-employer plan is foreclosed by the regulation from electing to make
appeal determinations in accordance with the special rules governing two
levels of appeal, rather than in accordance with the quarterly meeting provisions of the regulation. In addition, there is nothing in
the regulation that would foreclose a multi-employer plan from making
benefit review determinations in accordance with the quarterly meeting provisions and, following such determinations, providing
claimants with an opportunity to voluntarily pursue an additional (second)
review of their claim. See § 2560.503-1(c)(3). |
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The regulation requires, for group health and
disability claims, that the fiduciary deciding an appeal of an adverse
benefit determination based in whole or in part on a medical judgment
consult with an appropriate health care professional. This requirement of
consultation is intended to ensure that the fiduciary deciding a claim
involving medical issues is adequately informed as to those issues. The
consultation requirement, however, is not intended to constrain the
fiduciary from consulting any other experts the fiduciary considers
appropriate under the circumstances. For example, in connection with the
appeal of a denied disability claim, a fiduciary may consider it
appropriate to consult with vocational or occupational experts. In all
cases, a fiduciary must take appropriate steps to resolve the appeal in a
prudent manner, including acquiring necessary information and advice,
weighing the advice and information so obtained, and making an independent
decision on the appeal. The regulation’s provision for consultation with
a health care professional is not intended to alter the fiduciary
standards that apply to claims adjudication. |
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The regulation provides that, in order to allow
claimants a reasonable opportunity for a full and fair review of their
claim, a plan’s claims procedures must provide for the identification of
medical (or vocational) experts whose advice was obtained on behalf of the
plan in connection with an adverse benefit determination, without regard
to whether the advice was relied upon in making the determination. Under
the rules, plans are not required to automatically provide, as part of a
notice of an adverse benefit determination or otherwise, the identity of
experts consulted during the claim determination process. Nor are plans
required to disclose the name of experts in the absence of an adverse
benefit determination. On the other hand, consistent with the procedural
requirements of the regulation, the plan must provide the identity of any
such experts when requested by a claimant in connection with an adverse
benefit determination. See § 2560.503-1(h)(3)(iv) and (4). |
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No. The regulation expressly requires that plans
provide for the identification of the medical or vocational expert or
experts whose advice was obtained on behalf of the plan in connection with
the claimant's claim. Consequently, merely providing the name of the
company employing the expert or the qualifications of the expert would
not, in the department’s view, satisfy this requirement of the
regulation. See § 2560.503-1(h)(3)(iv) and (4). See question D-7. |
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Yes. The regulation requires a plan to provide
claimants, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to a
claimant’s claim for benefits. Under the regulation, relevant documents include, among other things, documents or records relied upon
in making a benefit determination and documents and records submitted in
the course of making the benefit determination. Inasmuch as a claimant’s
medical records relating to the benefit claim would be relevant documents, access to, and copies of, the claimant’s medical records
would have to be provided upon the claimant’s request. The department
notes, however, that if a plan has reason to believe that a claimant’s
medical records contain information that should be explained or disclosed
by the physician (or other health professional) who developed the
information, it would not be inconsistent with the regulation to refer the
claimant to the physician (or other health professional) for such
information prior to providing the requested documents directly to the
claimant. However, if the physician to whom the claimant was referred
failed to provide the requested information to the claimant in a
reasonable period of time and without charge, the plan itself would be
required to honor the claimant’s request. |
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No. The regulation requires that a claimant, have
access to, and copies of, documents, records and other information
relevant to the claimant’s claim. For this purpose, the regulation
defines as relevant any document, record, or other information that:
-
Was relied upon in making the benefit
determination
-
Was
submitted, considered, or generated in the course of making the benefit
determination, without regard to whether it was relied upon
-
Demonstrates compliance with the plan’s administrative processes and
safeguards for ensuring consistent decision making
-
Constitutes a
statement of policy or guidance with respect to the group health plan
concerning the denied treatment option or benefit for the claimant’s
diagnosis, without regard to whether it was relied upon in making the
benefit determination. See §§ 2560.503-1(h)(2)(iii) and 2560.503-1(m)(8)
While information and data from various claimants’
files may have been compiled for purposes of developing a plan’s
criteria, standards, guidelines, or policies to be used in ensuring and
demonstrating compliance with administrative processes and safeguards
relating to consistent decision making, (see question B-5); or evaluating
or assessing treatment options for benefit determinations, only the
criteria, standards, guidelines, or policies themselves would have to be
disclosed as information relevant to an individual claimant’s
claim, not the various claimants’ files on which such criteria,
standards, guidelines, or policies were based.
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The regulation, at § 2560.503-1(j)(5)(iii), provides
for the inclusion of the statement described above in all notices of
adverse benefit determination on review involving group health and
disability claims. However, the department recognizes that
information on the specific voluntary appeal procedures offered by the
plan will be provided, consistent with § 2560.503-1(j)(4), in the notice
of adverse benefit determination, along with a statement of the
claimant’s right to bring a civil action under section 502(a) of ERISA.
Pending further review, therefore, the department will not seek to enforce
compliance with the requirements of § 2560.503-1(j)(5)(iii). |
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While the regulation limits a plan’s claims procedure
to a maximum of two mandatory appeal levels, the regulation does permit
plans to offer voluntary additional levels of appeal, including
arbitration or any other form of alternative dispute resolution, provided
that certain conditions are met. The conditions of the regulation focus on
ensuring that the claimant elects the additional appeal voluntarily.
Specifically, the regulation provides that, in the case of such voluntary
levels of appeal, the plan’s claims procedure must provide:
-
The plan will not assert a failure to exhaust
administrative remedies where a claimant elects to pursue a claim in
court rather than through the voluntary level of appeal
-
The plan agrees that any statute of limitations
applicable to pursuing the claimant’s claim in court will be tolled
during the period of the voluntary appeal process
-
The voluntary level of appeal is available only
after the claimant has pursued the appeal(s) required by the
regulation
-
The plan provides the claimant with sufficient
information to make an informed judgment about whether to submit a
claim through the voluntary appeal process, including the specific
information delineated in the regulation
-
No fees or costs are imposed on the claimant as
part of the voluntary appeal process. See § 2560.503-1(c)(3)
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Yes. Provided that a plan’s claims procedure
otherwise complies with the conditions of the regulation applicable to
voluntary levels of appeal, there is nothing in the regulation that would
preclude a plan from using binding arbitration or any other method of
dispute resolution. See § 2560.503-1(c)(3). Also see 65 FR at 70253. |
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No. The special rules on post-appeal level reviews
apply, under the regulation, only to group health plans and plans that
provide disability benefits. All other ERISA-covered plans are not
required by the regulation to comply with these rules. However, if such
other plans elect to establish voluntary additional levels of review,
those levels would have to comport with the general requirements for a
reasonable procedure described in § 2560.503-1(b).
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The regulation became effective as of January 20, 2001.
The effective date is the date the regulations became legally
effective as part of the Code of Federal Regulations.
The applicability dates are the dates on which
plans must begin to comply with the regulation. The applicability date for
claims other than group health claims is January 1, 2002. This means that
such plans must comply with the regulation beginning with new claims filed
on or after January 1, 2002.
As amended on July 9, 2001, the regulation contains
separate applicability dates for group health claims and all other claims.
Under the regulation as amended on July 9, 2001, the applicability date
for group health claims was the first day of the first plan year that
begins on or after July 1, 2002, but not later than January 1, 2003. This
means that group health plans were required to comply with the regulation beginning
with new claims filed on or after the first day of the first plan year
beginning on or after July 1, 2002, but not later than January 1, 2003.
For all calendar year group health plans, the applicability date was
January 1, 2003.
Claims that were filed under a plan before the relevant
applicability date, and that were not yet resolved as of the
applicability date, may be handled in accordance with the plan’s old
benefit claims procedures, or, if the plan so chooses, in accordance with
the new procedures.
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Section 503 of ERISA requires plans to set up
procedures to provide a full and fair review of denied benefit claims.
With limited exceptions, claimants must exhaust those internal procedures
before filing a civil action for benefits under section 502(a)(1)(B). This
requirement reflects a legal presumption favoring exhaustion of internal
procedures.
Paragraph (l) of § 2560.503-1 provides that where a
plan fails to establish or follow claims procedures consistent with the
requirements of the regulation, a claimant shall be deemed to have
exhausted the administrative remedies available under the plan. The
claimant shall be entitled to pursue any available remedies under section
502(a) on the basis that the plan has failed to provide a reasonable
claims procedure that would yield a decision on the merits.
However, the regulation does not undermine the
principle that claimants bear the burden of proving to the satisfaction of
the court that the plan failed to establish or follow claims procedures
consistent with the requirements of the regulation. In addition, many of
the requirements in the regulation give a plan significant discretion in
establishing and following reasonable procedures. For example, paragraph
(b)(3) of the regulation prohibits a plan from establishing or
administering its procedures so as to unduly inhibit or hamper the
initiation or processing of claims for benefits. Accordingly, a plan
will be accorded significant deference in evaluating whether it failed to
follow a procedure consistent with those aspects of the regulation.
Moreover, not every deviation by a plan from the
requirements of the regulation justifies proceeding directly to court. A
plan that establishes procedures in full conformity with the regulation
might, in processing a particular claim, inadvertently deviate from its
procedures. If the plan’s procedures provide an opportunity to
effectively remedy the inadvertent deviation without prejudice to the
claimant, through the internal appeal process or otherwise, then there
ordinarily will not have been a failure to establish or follow reasonable
procedures as contemplated by § 2560.503-1(l). Thus, for example, a plan
that issues a notice of adverse benefit determination fully advising the
claimant of the right to review and to request additional information from
the plan may be able to correct an inadvertent failure to include in the
notice the specific plan provision on which the denial was based.
Ordinarily in that circumstance the plan will have provided access to a
reasonable claims procedure consistent with the regulations. On the other
hand, systematic deviations from the plan procedures, or deviations not
susceptible to meaningful correction through plan procedures, such as the
failure to include a description of the plan’s review procedures in a
notice of an adverse benefit determination, would justify a court
determination that the plan failed to provide a reasonable procedure.
In addition, filing a lawsuit without exhausting plan
procedures could limit claimants' appeal rights and cause claimants to
lose benefits to which they otherwise might be entitled. This could be the
case when, during the time it takes for a court to dismiss the
claimant’s suit, the plan’s deadline for filing an appeal expires. In
this regard, there is nothing in the regulation that would serve to toll
internal plan deadlines for filing or appealing claims when suit is
brought under section 502(a)(1)(B).
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