Interim Final Rule Puts Off Deadline on Health Insurance Protections

On Wednesday, CMS released an amended interim final rule for insurance regulations established by the federal health reform law that assist individuals whose claims are denied or who lose health coverage, Modern Healthcare reports.

The rule pushes back the deadline -- from July 1 of this year to Jan. 1, 2012 -- for states to enact legislation that meets the new standards (Vesely, Modern Healthcare, 6/22).

Details of Original Rule

The original interim final rule -- issued in July 2010 -- required states to pass legislation developing a fast external appeals process for consumers who were denied coverage (McCarthy, National Journal, 6/22). The rule states that insurers must explain to enrollees why their claim was denied or why they were dropped and how they can appeal the decision. Enrollees can demand a full review by the insurer and use an outside appeals board if the internal appeal is denied (Reichard, CQ HealthBeat, 6/22).

Details of Revised Rule

Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at CMS, said the agency revised the rule because many states will not be able to change insurance regulations before the original deadline (National Journal, 6/22). He noted that Alabama, Nebraska and Mississippi have no laws on external reviews of claim and coverage denials.

Under the revised rule, health plans in states that fail to pass consumer protections by January 2012 can use regulations provided by the federal government until 2014, when the reform law requires additional insurance standards (Modern Healthcare, 6/22). States also can choose to employ an accredited review company (National Journal, 6/22).

The amended rule also relaxes some of the 16 original protections until 2014 (CQ HealthBeat, 6/22). For example, it shortens the time period in which consumers can file complaints from four months to two months. In addition, the revised rule extends the time in which an external review must be completed from 45 days to 60 days (Modern Healthcare, 6/22).