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HOW MUCH TIME should health care plans have to decide if they will cover a medical procedure?
The Labor Department, in a long-awaited proposed rule, has given its answer: In the case of urgent benefit determinations, plans would have 72 hours to notify beneficiaries whether coverage will be provided. For non-urgent care, the deadline would be 15 days.
In addition, in cases where care already has been provided, a health care plan generally would have 15 days to notify a participant of the payments it will make, whether the claim will be denied, or whether more information is needed from the participant or provider before a payment decision can be made.
If adopted, these proposed rules would replace an outdated 1977 Labor Department regulation that says health care plans must handle claims as quickly as possible but no later than 90 days after receipt.
Today's health care delivery system bears little resemblance to that of two decades ago, when the current rule was developed. In 1977, traditional fee-for-service was king. In that system, few questions were asked before or after services were provided.
But as managed care has evolved and has largely supplanted traditional indemnity plans, the no- or few-questions approach has largely gone by the wayside.
As we all know, health care plans now often require pre-certification or pre-authorization before they will approve coverage for a major procedure.
We have no problem with that kind of scrutiny. We have no doubt that years ago, prior to the advent of managed care, there was too much unnecessary surgery; lack of physician review by outside parties was one reason why.
While medical care, in certain situations, no longer is automatically and instantly provided, that doesn't mean employees should be forced to wait an inordinate amount of time before a plan decides whether it will cover a procedure. A 90-day standard obviously is obsolete, and the new proposed 72-hour and 15-day standards are doable and needed.
Other parts of the proposed rules are more problematic. One change the Labor Department is suggesting, involving disclosure of certain information to participants, needs to be reconsidered.
The department is considering whether participants who are suing a plan for denial of benefits should be entitled to a slew of information, including documents related to previous claims made with that plan over the prior five years involving the same diagnosis and treatment.
This strikes us, and many others as well, as creating a significant administrative burden. Maintaining five years of records of coverage decisions and diagnosis may be more than many plan administrators could handle.
But, overall, we think the proposed regulations are a good first step in updating claims determination decisions to fit today's health care delivery system.