Clinton Issues Patients’ Rights Rules to Speed Claims

President Clinton on Nov. 20 issued new rules requiring most private insurers to shorten the amount of time they take to decide initial claims and giving patients additional time to file appeals when coverage is denied. The New York Times reports that the rules, written by the Labor Department, will apply to approximately 130 million individuals covered by private insurance, but "do not go as far" in defining patients' rights as the Norwood-Dingell bill (H.R. 2723) passed by the House last year, which includes a right to sue health plans. Clinton said, however, that he "was doing as much as he could, within the limits of existing law, to protect patients and regulate" insurers and HMOs (Pear, New York Times, 11/21). The purpose of the rules is "to provide a speedier and more efficient system for handling the contacts between the patients and health plans," the Los Angeles Times reports (Rosenblatt, Los Angeles Times, 11/21). The new regulations represent the "first changes" to the claims and appeals process since the 1974 Employee Retirement Income Security Act, which governs private health plans (AP/Washington Post, 11/21). The rules will replace the existing 90-day deadline insurers have to issue a decision on whether to cover a treatment or service. Instead, insurers will have no more than 72 hours to rule on claims for "urgently needed care," 15 days to rule on medical procedures that need advance approval and 30 days to decide on reimbursement for care already delivered. If insurers deny coverage, patients have 180 days, instead of the current 60-day allowance, to file an appeal. Insurers must "consult with a health care professional who has appropriate training and experience" when deciding an appeal. Under the existing rules, insurers had 60 days to rule on appeals. Now, the companies have 72 hours to determine an appeal on "urgent care," 30 days for claims seeking advance approval and 60 days for care that was already provided. Following the example of 33 states that already have laws or regulations requiring managed care plans to have an appeals process, the new rules mandate that health plans must have "internal procedures" for patients to appeal denied claims. If insurers fail to meet the deadlines for "acting on claims" or do not follow "reasonable claims procedures," patients may seek an injunction in federal court, the New York Times reports. Insurers also cannot charge patients any fee for filing claims or appeals and must provide patients with "the specific reason or reasons" for rejected claims or reduced or terminated benefits. Under the rules, insurers must afford patients access to "rules, guidelines or policies they relied on" in coming to a decision. The rules are set to apply to claims filed on or after Jan. 1, 2002, but the new president could attempt to "modify or delay" the rules (New York Times, 11/21). Cheers and Jeers In a statement, Clinton said, "We are taking an important step toward providing Americans the health care protections they need. It is the final executive action I can take to provide critical patient protections." But he added, "The only way to give every American in every health plan the right to see a specialist, to go to the nearest emergency room -- not the cheapest -- and to hold health care plans accountable when they cause harm is to pass a real, enforceable patients' bill of rights" (AP/Washington Post, 11/21). The regulations "cannot substitute for a patients' bill of rights, but [they] can put in place fundamental safeguards," Leslie Kramerich, acting assistant secretary for the federal Pension and Welfare Benefits Administration, said (Los Angeles Times, 11/21). Health plan advocates expressed hesitancy over the new rules. Chip Kahn, president of the Health Insurance Association of America, said that "these rules will do little, if anything, to improve the quality of health care." He added that the rules would increase the cost of insurance, and cause some employers to drop coverage (New York Times, 11/21). The Labor Department estimates that the rules will cost health plans $103 million for start-up costs in 2001 and an additional $379 million per year beginning in 2002 (McGinley, Wall Street Journal, 11/21). Karen Ignagni, president of the American Association of Health Plans, said that she "worried that the new rules could put patients on a 'fast track to court,' creating a 'litigation bonanza' for plaintiffs' lawyers" (New York Times, 11/21). In addition, Reps. William Goodling (R-Pa.), the House Education and the Workforce Committee chair, and John Boehner (R-Ohio), chair of the employer-employee relations subcommittee, had written Labor Secretary Alexis Herman a letter on Nov. 5, expressing their concern about the proposed regulations, particularly with Congress still debating a patients' bill of rights. The letter said, "It would be inappropriate for administrative regulations ... to be issued by the department while these deliberations are underway" (AP/Washington Post, 11/21).