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Health plans subject to new federal appeals rules

Much-postponed regulations offer patients and doctors fairer and faster review, plus new rights, Dept. of Labor says.

By Joel B. Finkelstein, amednews staff. Jan. 20, 2003.

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Washington -- Federal regulations that dictate rapid turnaround times for health plan claims and appeals quietly went into effect this month, with little noise from the managed care industry.

The Dept. of Labor rules for plans regulated by the Employee Retirement Income Security Act of 1974 may represent yet another chink in the armor that has protected managed care companies from lawsuits. ERISA plans that fail to fully comply with the abbreviated claims and appeals times set forward by the rules open themselves up to litigation.

Group health plans are either in compliance or working toward it, said Mohit Ghose of the American Assn. of Health Plans, an industry trade group in Washington, D.C. Efforts to follow the letter of the law have not forced radical changes in the way plans do business, he said.

It is unclear how the rules will play out in the courts. There is concern within the HMO industry that trial lawyers will find loopholes in the law to bring new lawsuits, Ghose said.

But so far that hasn't been the case. "I haven't seen any activity in my practice," said Jeffery Mandell, president of the ERISA Law Group in Boise, Idaho. He added that it often takes years, even decades, for the marketplace to fully adopt new regulations.

"At the end of the day, it's a new regimen of rules that changes the way claims are administered, and it will be a matter of time" before its effects are clear, he said. Generally, there is widespread noncompliance with new rules in the beginning.