[Federal Register Volume 62, Number 173 (Monday, September 8, 1997)]
[Proposed Rules]
[Pages 47262-47266]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23483]



[[Page 47261]]

_______________________________________________________________________

Part III





Department of Labor





_______________________________________________________________________



Pension and Welfare Benefits Administration



_______________________________________________________________________



29 CFR Part 2560



Claims Procedures for Employee Benefit Plans; Proposed Rule

  Federal Register / Vol. 62, No. 173 / Monday, September 8, 1997 / 
Proposed Rules  

[[Page 47262]]



DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration
29 CFR Part 2560


Claims Procedures for Employee Benefit Plans

AGENCY: Pension and Welfare Benefits Administration, Labor.

ACTION: Request for information.

-----------------------------------------------------------------------

SUMMARY: This document requests information from the public concerning 
the advisability of amending the existing regulation under the Employee 
Retirement Income Security Act of 1974 (ERISA) that establishes minimum 
requirements for employee benefit plan claims procedures. The term 
``claims procedure'' refers to the process that employee benefit plans 
must provide for participants and beneficiaries who seek to obtain 
pension or welfare plan benefits, including requests for medical 
treatment or services, consideration of claims, and review of denials 
of claims by plans. The primary purpose of this notice is to obtain 
information to assist the Department of Labor (the Department) in 
evaluating (1) The extent to which the current claims procedure 
regulation assures that group health plan participants and 
beneficiaries are provided with effective and timely means to file and 
resolve claims for health care benefits, and (2) whether and in what 
way the existing minimum requirements should be amended with respect to 
group health plans covered by ERISA. The furnished information also 
will assist the Department in determining whether the regulation should 
be amended with respect to pension plans covered by ERISA and in 
developing legislative proposals to address any identified deficiencies 
relating to the claims procedures that cannot be addressed by amending 
the current regulation.

DATES: Written comments must be submitted to the Department of Labor on 
or before November 7, 1997.

ADDRESSES: Comments (preferably, at least six copies) should be 
addressed to the Office of Regulations and Interpretations, Pension and 
Welfare Benefits Administration, Room N-5669, U.S. Department of Labor, 
Washington, D.C. 20210. Attention: Claims Procedure RFI. All comments 
received will be available for public inspection at the Public 
Disclosure Room, Pension and Welfare Benefits Administration, U.S. 
Department of Labor, Room N-5638, 200 Constitution Ave., N.W., 
Washington, D.C. 20210.

FOR FURTHER INFORMATION CONTACT: Jeffrey J. Turner or Susan G. Lahne, 
Office of Regulations and Interpretations, Pension and Welfare Benefits 
Administration, U.S. Department of Labor, Washington, D.C. 20210, 
telephone (202) 219-7461, or Cynthia Caldwell Weglicki, Plan Benefits 
Security Division, Office of the Solicitor, U.S. Department of Labor, 
Washington, D.C., telephone (202) 219-4600, ext. 106. These are not 
toll-free numbers.

SUPPLEMENTARY INFORMATION:

A. Background

    The Department's regulation, published in 1977, was drafted in 
response to concerns about plan practices prior to the enactment of 
ERISA, particularly with respect to participants' lack of information 
about claims procedures generally. This regulation makes no distinction 
between pension and health care plans. In the intervening years, 
dramatic changes in health care delivery have raised many issues 
concerning access, coverage, and quality of care and have resulted in 
various legislative responses. In addition to numerous initiatives at 
the State government level, a number of Federal laws have been enacted 
to address these issues. The Health Insurance Portability and 
Accountability Act of 1996, the Newborns and Mothers Health Protection 
Act of 1996, and the Mental Health Parity Act of 1996 are recent 
examples. In addition, on September 5, 1996, President Clinton signed 
Executive Order 13017 establishing the Advisory Commission on Consumer 
Protection and Quality in the Health Care Industry. More recently, the 
Balanced Budget Act of 1997 (P.L. 105-33) contains a number of 
provisions relating to managed care in connection with the Medicare and 
Medicaid programs.
    One of the most important changes to occur has been the growth of 
managed health care delivery systems.1 These arrangements 
adopt various measures to control costs and increase efficiency. For 
example, they may impose limits or conditions on an individual's choice 
of physicians and often require prior approval before an individual can 
obtain, or obtain reimbursement for, hospital care or medical services 
provided by a specialist. Both fee-for-service and health maintenance 
organizations (HMOs), as well as preferred provider and other types of 
delivery systems, may rely on managed care measures. As a result of the 
prevalence of managed care measures, fair and expeditious resolution of 
benefits disputes has become an increasingly important issue. Managed 
care measures magnify the significance of the procedures that surround 
the decision whether medical services will be made available to a 
participant or beneficiary, and suggest that the Department should 
consider whether its current regulatory minimum standards for such 
procedures are sufficient to ensure that decisions on the availability 
of medical care are made in a manner that adequately protects the 
interests of the individual seeking benefits.
---------------------------------------------------------------------------

    \1\ As used in this document, the term ``managed care delivery 
systems'' includes any measures taken by medical practitioners, 
insurers, or group health plans to control costs by limiting access 
to medical services.
---------------------------------------------------------------------------

    At the same time, technological advances in business communications 
in the last twenty years facilitate more rapid communications and 
decision-making by plans and participants. The Department's regulation 
may no longer reflect current plan practices with respect to these 
aspects of filing and reviewing benefit claims. The Department seeks 
information about current practices in this area. Along the same lines, 
market practices such as accreditation by various professional and 
consumer groups have become important private regulatory forces in the 
managed care arena. Publication of model acts, such as the Utilization 
Review Model Act and the Health Carrier Grievance Procedure Model Act 
developed by the National Association of Insurance Commissioners 
(NAIC), reflect the importance of time-sensitive review procedures. The 
NAIC model acts have served as the basis for State legislation to 
provide procedural protections, including expedited review of claims, 
to individuals who receive medical benefits through health insurance 
contracts that incorporate managed care arrangements.
    The Department is not alone in its concern for timely resolution of 
requests for medical treatment from group health plans. The Health Care 
Financing Administration (HCFA) has recently published a final 
regulation establishing an expedited process in certain circumstances 
for Medicare beneficiaries enrolled in managed care entities such as 
health maintenance organizations. 2 The HCFA regulation 
requires that managed care entities establish an expedited review 
process in situations where the time required for

[[Page 47263]]

the standard review process could seriously jeopardize the life or 
health of the Medicare beneficiary or the beneficiary's ability to 
regain maximum function. The rule also provides that a decision to 
discontinue services that are currently being provided may also be 
subject to the expedited review process. In the preamble to the 
regulation, HCFA indicates that it has drawn on the NAIC model 
grievance act in developing the provisions of the review procedure. As 
discussed below in section C., Issues Under Consideration, the 
Department believes that the HCFA regulation and the NAIC model acts 
may serve as the basis for considering whether, and in what respects, 
the minimum standards set forth in the ERISA benefit claims procedure 
regulation should be amended.
---------------------------------------------------------------------------

    \2\ This regulation was published as a final rule with a request 
for comments, 62 FR 23368 (April 30, 1997). The regulation amends a 
prior regulation codified at 42 CFR Sec. 417.600-620.
---------------------------------------------------------------------------

B. Current ERISA Regulation

    Section 503 of ERISA, 29 U.S.C. Sec. 1133, provides that, in 
accordance with regulations promulgated by the Secretary of Labor (the 
Secretary), each employee benefit plan must provide ``adequate notice 
in writing to any participant or beneficiary whose claim for benefits 
under the plan has been denied.'' The notice must set forth the 
specific reasons for the denial and must be written in a manner 
calculated to be understood by the claimant. Each plan must also afford 
``a reasonable opportunity'' for any participant or beneficiary whose 
claim has been denied to obtain ``a full and fair review'' of the 
denial by the appropriate named fiduciary of the plan.
    The Department has issued a regulation pursuant to the above 
authority that establishes ``certain minimum requirements for employee 
benefit plan procedures pertaining to claims.'' 29 CFR Sec. 2560.503-
1(a). Generally speaking, the following requirements apply. The claims 
procedure of an employee benefit plan covered by ERISA (hereinafter 
referred to as an ERISA plan) must be described in the plan's summary 
plan description. The procedure must not contain any provision or be 
administered in any way that would unduly inhibit the initiation or 
processing of claims. Participants must be informed in writing and in a 
timely fashion of applicable time limits for appeals and responses.
    More specifically, the regulation provides that claimants must be 
informed in writing ``within a reasonable period of time'' if a claim 
is partially or wholly denied. 29 CFR Sec. 2560.503-1(e)(1). For this 
purpose, the regulation defines a period of time in excess of 90 days 
after receipt of the claim as unreasonable, unless ``special 
circumstances'' require an extension of time for processing. In that 
case, an extension of an additional 90-day period is available provided 
that the claimant receives notice of the extension describing the 
special circumstances prior to the end of the original 90-day period. 
The notice of a denial of a claim for benefits must be written in a 
manner calculated to be understood by the claimant and must contain (1) 
specific reason(s) for the denial, (2) reference to plan provisions on 
which the denial is based, (3) a description of any additional material 
necessary to perfect the claim and why it is necessary, and (4) 
information about how to submit the claim for review. If the notice is 
not provided in this manner, the claim for benefits is deemed to be 
denied.
    The regulation also requires that every plan establish a review 
procedure providing a ``reasonable opportunity'' to appeal denied 
claims to an appropriate named fiduciary or designee. The appeal must 
afford ``a full and fair review of the claim and its denial.'' 29 CFR 
Sec. 2560.503-1(g)(1). Minimum requirements for the review procedure 
include the right to request a review by a written application from the 
claimant, the right to review pertinent documents, and the right to 
submit issues and comments in writing. A claimant must have at least 60 
days after receipt of the denial in which to request a review. A 
decision on the review must ordinarily be made within 60 days after the 
request for a review, unless special circumstances (such as the need to 
hold a hearing if the plan provides for a hearing) require an extension 
of time. However, the decision may not be delayed more than 120 days 
after receipt of the request for review. Special rules provide longer 
periods of time for plans whose named fiduciary is a group, such as a 
board of trustees, that holds regularly scheduled meetings at least 
quarterly. In that case, the review decision must be made by the 
scheduled time of the next meeting, unless the request for review is 
received within 30 days prior to that scheduled meeting, in which case 
the decision is due no later than the date of the group's second 
successive meeting, with a possible extension to the date of the third 
meeting if there are special circumstances. 29 CFR Sec. 2560.503-
1(h)(1)(ii). As with the initial denial, the decision on review must be 
in writing, include specific reasons for the decision and references to 
plan provisions on which the decision is based, and be written in a 
manner calculated to be understood by the claimant. If no review 
decision is provided within the time frames specified, the claim is 
deemed denied.
    Under the regulations, plans established pursuant to collective 
bargaining agreements are not treated differently from other plans, 
except that they are deemed to comply with the regulatory standards for 
reviewing denied claims if the collective bargaining agreement pursuant 
to which the plan is established either contains or incorporates by 
reference provisions concerning the filing and disposition of benefit 
claims and a grievance and arbitration procedure for handling denied 
claims. Participants in plans under which benefits are provided or 
administered by State-regulated insurance organizations may file claims 
for benefits, obtain decisions and obtain review of denials through 
those organizations, but the minimum standards otherwise remain the 
same. The regulation excludes from its scope employee benefit plans 
providing only apprenticeship training benefits.
    Claims procedures with respect to benefits provided through a 
qualified HMO, as defined in the Public Health Service Act, 42 U.S.C. 
Sec. 300e-9(d), are deemed to satisfy the minimum ERISA regulatory 
requirements if they satisfy section 1301 of the Public Health Service 
Act (42 U.S.C. Sec. 300e) and the regulations thereunder. 29 CFR 
Sec. 2560.503-1(j). The regulation addressing claims procedures for 
federally qualified HMOs is codified in 42 CFR 
Sec. 417.124.3 The pertinent provisions of the Public Health 
Service Act regulations require that each qualified HMO prepare a 
written description of, among other things, the procedures to be 
followed in obtaining benefits, a description of circumstances under 
which benefits may be denied, and grievance procedures. 42 CFR 
Sec. 417.124(b). Grievance procedures must be ``meaningful'' and must 
ensure that complaints are transmitted in a timely manner to 
appropriate decision makers who have authority to take corrective 
action. Appropriate action in response to grievances is to be taken 
promptly, with notice to concerned parties of the

[[Page 47264]]

results of the HMO's investigation. 42 CFR Sec. 417.124(g).
---------------------------------------------------------------------------

    \3\ 42 CFR Sec. 417.124 does not relate to the requirements HMOs 
must meet in order to maintain a contract with the Health Care 
Financing Administration through which health care benefits are 
provided to Medicare beneficiaries. Section 1876 of title XVIII of 
the Social Security Act (42 U.S.C. 1395mm) lists those requirements. 
Regulations implementing the benefit request and benefit review 
rights of Medicare beneficiaries who participate in managed care 
delivery systems are found at 42 CFR Sec. 417.600 through 
Sec. 417.638. This RFI does not involve benefit review procedures 
for Medicare beneficiaries.
---------------------------------------------------------------------------

C. Issues Under Consideration

    Questions have been raised with respect to whether the minimum 
standards provided in the Department's regulation adequately assure 
timely and appropriate recourse for employee benefit plan participants 
and beneficiaries making requests for benefits, or seeking review of 
benefit claims that have been denied in whole or in part. Although 
issues that have arisen in the context of group health plans have 
provided the primary impetus to these questions, section 503 of ERISA 
and the Department's regulation at 29 CFR Sec. 2560.503-1 apply to both 
employee welfare benefit plans (the category that includes group health 
plans) and employee pension benefit plans. The Department is seeking 
comments concerning the nature of existing benefit determination and 
review practices of plans and whether the Department's current 
regulation is adequate to protect the interests of both pension and 
welfare benefit plan participants and beneficiaries.
    The Department is aware that, under current practices, entities 
that are involved in providing health care employ a variety of terms to 
describe the process by which an individual eligible for health care 
services seeks benefits or seeks review of a decision to limit or deny 
health care treatment or services. Even where the procedural steps are 
similar, entities may use different terminology for the same procedural 
step.4 As part of this RFI, the Department is seeking 
information as to whether and how it should address the diversity in 
terminology that is used to describe the procedural protections 
afforded individuals.
---------------------------------------------------------------------------

    \4\ The Public Health Service Act regulations applicable to 
federally qualified HMOs require written descriptions of 
circumstances under which benefits may be denied and written 
grievance procedures. 42 CFR Sec. 417.124. Regulations promulgated 
by the Office of Personnel Management relating to both fee-for-
service and managed care providers participating in the Federal 
Employees Health Benefits Plan (FEHBP) use terms such as filing 
claims for payment or services, reconsideration of claims that have 
been denied, and review of decisions to deny claims. 5 CFR 
Sec. 890.105. HCFA's Medicare regulations provide an appeals 
procedure for Medicare beneficiaries contesting an ``organization 
determination,'' which, generally speaking, is a decision by a 
health care provider to deny, terminate, or not pay for medical 
services that the beneficiary believes are covered under the plan. A 
``reconsidered determination'' is the result of a review of the 
organization determination. The NAIC Health Carrier Grievance Model 
Act (October 1966) uses the term ``adverse determination'' for a 
carrier's decision that medical services will be denied, reduced or 
terminated. The Model Act provides for an appeals procedure to 
review an adverse determination. The term grievance is defined as a 
written complaint about the availability or quality of health care 
services, including, but not limited to adverse determinations. 
State insurance laws and regulations dealing with health care 
insurance carriers display a similar variety of terms.
---------------------------------------------------------------------------

    In order to assist interested parties in responding, this document 
contains a list of specific questions designed to elicit information 
that the Department believes would be especially helpful in determining 
whether and how to develop a notice of proposed rulemaking. The 
Department requests that, in addressing the specific questions in this 
document, responses refer to the question number as listed in the RFI. 
The questions listed by the Department may not address all issues 
relevant to claims procedures. The Department further invites 
interested parties to submit comments on other aspects of the claims 
process that they believe are pertinent to the Department's 
consideration of claims procedures in employee benefit plans covered by 
title I of ERISA.
    In the individual questions below, the following terms have 
specific meanings. A ``claim'' is a request for a plan benefit by a 
participant or beneficiary. A ``claimant'' is a participant or 
beneficiary who has or intends to file a claim. A ``claims procedure'' 
is the set of rules or requirements by which a claim is filed and 
resolved under the plan. A ``review'' or ``appeal'' is the next level 
or levels of claims resolution under the plan after the initial 
decision occurs or is deemed to have occurred.

Request for Information

Current Practices

    1. What information is provided to claimants when requests for 
services are denied? What are plan practices generally where the plan 
or a service provider must give prior approval before a participant or 
beneficiary can obtain certain types of medical treatment?
    2. What time frames are typical in ERISA plan claims processes for 
initial determination and for review of a denied claim? Do plans have 
different time frames for health care benefits that require prior 
approval? Do plans maintain special procedures for processing such 
claims if they involve ``urgent'' or emergency care?
    3. When and under what circumstances do plans hire physicians who 
are not affiliated with the plan to provide independent opinions in 
connection with a benefit claim? What weight do plans give to the 
outside opinion?
    4. Do plans provide claims reviewers financial incentives based on 
the percentage of claims denied? Are there compensation arrangements 
that might influence the reviewers' conclusions? If yes, what are they?
    5. The Department's ERISA claims procedure regulation provides that 
a claimant seeking review of a denial ``may review pertinent 
documents.'' 29 CFR Sec. 2560.503-1(g)(ii). The preamble to the 
regulation explains that ``[a]s part of the review the participant must 
be allowed to see all plan documents and other papers which affect the 
claim.'' 42 FR 27426 (May 27, 1977). What do plans consider to be 
examples of pertinent documents or other papers that might affect a 
claim for benefits? Is there some utility to permitting participants to 
review pertinent documents prior to filing a claim? Would it reduce 
claims if a potential claimant could examine documents before filing a 
claim? What additional costs, if any, would such a requirement impose 
on plans?
    6. When and under what circumstances do plans utilize alternative 
dispute resolution, arbitration, or similar processes with an outside, 
independent decision-maker for review of claims denials? Are there any 
conditions or requirements for electing such processes?
    7. Are claimants being asked to pay anything to the plan in order 
to pursue or perfect their claims review rights? If so, under what 
circumstances does this occur? Note: The preamble to 29 CFR 
Sec. 2560.503-1, Part II--Technical Explanation of the Regulation, 
provides that an otherwise reasonable claims procedure may be deemed to 
be ``not reasonable if it contains other provisions which unduly 
inhibit or hamper the initiation or processing of plan claims. For 
example, a claims procedure may be deemed unreasonable if it requires 
the payment of a fee as a condition for filing a claim or obtaining 
review of a denied claim.'' 42 FR 27426 (May 27, 1977).
    8. Are there problems making claims processing procedures 
accessible to plan participants who do not speak English? Should the 
Department address these problems in a regulation? If so, how?
    9. What limits do plans impose on the time within which a 
participant or beneficiary may file a claim for benefits or may request 
review? Should the Department adopt minimum standards for filing claims 
and new minimum standards for requesting review?
    10. To what extent are electronic media used to receive or 
communicate benefit claims information or to process claims? What if 
any changes to the regulation are necessary to accommodate this?

[[Page 47265]]

Expedited Claims Procedures

    Recently HCFA published a final rule requiring that managed care 
organizations such as HMOs establish an expedited procedure for 
Medicare beneficiaries in situations where the longer time frames in 
the standard review process ``could seriously jeopardize the life or 
health of the enrollee or the enrollee's ability to regain maximum 
function.'' 42 CFR Sec. 471.617(b). Expedited review must be completed 
as quickly as the beneficiary's medical condition requires, i.e., 
within 24 or 48 hours as appropriate, but in no case longer than 72 
hours, absent special circumstances. The Medicare beneficiary, a 
representative of the beneficiary, or a physician may request expedited 
review both for the initial request for benefits and for review of 
decisions to deny or terminate benefits. Any physician, including one 
who is not affiliated with the plan, may request expedited review on 
behalf of a Medicare beneficiary, and the plan must accept the 
physician's decision that expedited review is necessary.
    It is the responsibility of the managed care organization to ensure 
that all Medicare beneficiaries have a complete written explanation of 
their benefit review rights, of the availability of expedited reviews, 
of the steps to follow, and of the time limits for each step of the 
procedures. When a request for benefits is being reviewed after an 
initial denial, HCFA's regulation requires that managed care 
organizations provide Medicare beneficiaries with a reasonable 
opportunity to present evidence and allegations of fact or law related 
to the issues in dispute, in person as well as in writing. Where the 
review is expedited, involving a shorter time for decision, the plan 
must inform Medicare beneficiaries of the conditions for submitting 
evidence. Medicare regulations provide several levels of review by 
entities outside the managed care organization. An outside peer review 
organization provides immediate review of contested decisions to 
discharge a Medicare beneficiary from the hospital, and if, after the 
benefit review process is completed, the initial decision to deny the 
benefit is upheld, an appeal is automatically sent to an independent 
reviewer under contract with HCFA. In the preamble to the regulation, 
HCFA also asks for comments concerning (1) guidelines for notice and 
benefit review rights when the level of services currently being 
provided to Medicare beneficiaries is being reduced, and (2) when 
review of a reduction in the level of services should be expedited.
    11. Should the Department's regulation require ERISA plans to 
provide expedited review? If yes, under what circumstances should an 
expedited review procedure be available?
    12. Would the HCFA regulation's expedited review procedure provide 
an appropriate maximum time frame if ERISA plans were required to adopt 
expedited review procedures?
    13. If ERISA plans were required to adopt an expedited review 
procedure, how should terms such as ``medical urgency'' be defined? 
Should the definition of medical urgency for purposes of an expedited 
procedure be limited to situations where delay could jeopardize life or 
health or the ability to regain maximum function, as in the HCFA 
regulation, or should there be some lesser standard, such as 
intractable pain or temporary inability to perform major life functions 
such as employment?
    14. What additional costs, if any, would be imposed on plans if an 
expedited claims procedure along the lines of the HCFA regulation or 
the NAIC model acts were required?
    15. The HCFA expedited review procedure permits a Medicare 
beneficiary, a representative of the Medicare beneficiary, or a 
physician to request expedited review both for initial benefit requests 
and for reconsideration of requests that have been denied. The managed 
care organization decides if the request meets the criteria for 
expedited treatment. However, any physician, such as a non-plan 
physician, may request expedited review on behalf of a Medicare 
beneficiary, and the managed care organization must accept the 
physician's decision that expedited review is necessary. If ERISA plans 
were required to adopt some form of expedited review, whose request 
should initiate the process? Should this authority be restricted to a 
physician affiliated with the plan, or any physician?
    16. Should some claims, such as emergency hospital admissions or 
hospital discharges, always have expedited review as a matter of 
course?
    17. If some form of expedited review is adopted for ERISA plans, 
and under the terms of the regulation a claimant is entitled to an 
expedited review, should the plan administrator be subject to penalties 
for noncompliance with the procedure?
    18. Would an expedited process be subject to overuse or abuse by 
claimants or physicians? If so, how can this be avoided?

Other Aspects of Reviewing Claims

    19. Would the HCFA regulation's system of permitting Medicare 
beneficiaries or their representatives to present new evidence 
throughout the benefit review process work for ERISA plans? Should 
ERISA claimants be allowed to appear and present evidence in person at 
some levels of the claims review process? What additional costs, if 
any, would such requirements impose on plans?
    20. In what, if any, situations should an ERISA plan service 
provider be required to continue services at the previous level pending 
reconsideration of a decision to reduce or terminate services? Should 
any such requirement affect the maximum time frames for resolution of 
claims involving such decisions?
    21. In contrast to HCFA's Medicare regulation that provides several 
levels of review by entities outside the managed care organization, 
ERISA Sec. 503 provides that every plan shall provide ``a full and fair 
review by an appropriate named fiduciary'' of a decision denying a 
claim. Do the Department's minimum regulatory standards that implement 
this requirement provide sufficient assurance of a disinterested 
hearing? If not, what changes to the existing regulation would assure 
adequate impartiality in the review process?
    22. The Department's regulations at 29 CFR Sec. 2560.503-1(f) 
require that upon denial, the plan shall provide ``[a]ppropriate 
information as to the steps to be taken if the participant or 
beneficiary wishes to submit his or her claim for review.'' The plan's 
decision on review must include specific written reasons for the 
decision as well as references to the pertinent plan provisions on 
which the decision is based. Should plans be required to provide 
claimants with more information concerning the claims review process 
than is currently required by the regulation? Should a plan be required 
to inform participants about the need to exhaust the plan's review 
process, as suggested by Kinkead v. Southwestern Bell Corporation 
Sickness & Accident Disability Benefit Plan, No. 96-2282, 1997 U.S. 
App. LEXIS 6532 at *5 (8th Cir. April 9, 1997), or about judicial 
recourse? If so, what information should be provided to participants?
    23. Would it be helpful in reducing claims and claims review 
requests to require plans to provide definitions of terms about which 
there may be controversy or that may generate a

[[Page 47266]]

number of appeals, such as ``emergency services'' or ``urgently needed 
services,'' as some States have done?
    24. Health care plans subject to ERISA's claim procedure regulation 
use certain terms to describe the process by which participants and 
beneficiaries seek benefits or seek review of decisions to deny, 
reduce, or limit benefits under the plan. Other regulators, such as 
HCFA, and FEHBP, as well as the NAIC model Grievance Act and State 
insurance laws, utilize different terms to describe similar procedures. 
Should the Department attempt to conform or cross-reference its claims 
procedure terminology to that of other regulatory schemes? If so, which 
one?

Differences Among ERISA Plans

    25. Is there a need to establish uniform minimum standards for all 
ERISA plan claims procedures, including plans providing benefits 
through federally qualified HMOs? Note: Under the current regulation, 
federally qualified HMOs are now subject to a different set of 
regulations under the Public Health Service Act. 29 CFR Sec. 2560.503-
1(j); 42 CFR Sec. 417.1 through 417.169. What would be the impact and 
additional costs, if any, of requiring a uniform standard?
    26. Under the Department's current regulation, certain plans 
established or maintained pursuant to collective bargaining agreements 
are deemed to comply with the existing regulation provided that 
provisions concerning filing claims, the initial disposition of claims, 
and a grievance and arbitration procedure to which denied claims are 
subject are referenced in the collective bargaining agreement. 29 CFR 
Sec. 2560.503-1(b)(2). Should claimants in such plans be subject to 
differing claims procedures depending on the terms of the collective 
bargaining agreement, or should there be a uniform claims procedure for 
all ERISA plans? What costs, if any, would a uniform requirement 
impose?

State Laws

    28. Should any new regulation take into consideration State 
regulatory requirements? If so, which requirements?

Data

    29. Do ERISA plans and insurers maintain statistics on pre-
authorization requests, patient requests for referrals, claims 
approvals, denials, appeals and court challenges? What information is 
collected, how is it used, and to whom is it disclosed?
    30. What proportion of pre-authorization requests, patient requests 
for referrals, and requests for benefits are denied? What proportion of 
denials are appealed? What proportion of appeals are successful? What 
proportion of denied appeals are challenged in court by those seeking 
benefits, and what proportion of court challenges are successful?
    31. What proportion of pre-authorization requests, patient requests 
for referrals and benefits, and what proportion of denials, appeals, 
and court challenges are associated with questions of medical 
necessity, benefit coverage, out-of-network care, or the participants' 
insured status?
    32. What dollar amounts are associated with pre-authorization 
requests, patient requests for referrals, claims, denials, appeals, and 
court challenges?
    33. What is the usual timing associated with pre-authorization 
requests, patient requests for referrals, claims, denials, appeals, and 
court challenges?
    34. Under Medicare, HCFA has broad authority to require reporting 
of information. Information concerning appeals and grievances from 
enrollees in Medicare managed care arrangements are collected by the 
reconsideration contractor that performs reviews for HCFA, and are 
reported to HCFA by provider and by type of complaint (i.e., non-plan 
practitioner, mental health, emergency room, inpatient hospital, etc.). 
Should ERISA plans be required to maintain a written log of benefit 
denials and benefit reviews for examination by prospective enrollees? 
In the alternative, should ERISA plans be required to record and make 
available to claimants and the Secretary the number of requests for 
review or appeals by claimants and whether the resolution was favorable 
or unfavorable to the claimant? What costs, if any, would either 
requirement impose on plans? Would it be useful and less burdensome to 
have uniform reporting requirements for Medicare, ERISA and State 
purposes?

Impact on Small Entities

    In responding to the questions above, please address the 
anticipated annual impact of any proposals on small businesses and 
small plans (plans with fewer than 100 participants).
    All submitted comments will be made a part of the record of 
proceeding referred to herein and will be available for public 
inspection.

    Signed at Washington, D.C. this 27th day of August, 1997.
Olena Berg,
Assistant Secretary for Pension and Welfare Benefits, U.S. Department 
of Labor.
[FR Doc. 97-23483 Filed 9-5-97; 8:45 am]
BILLING CODE 4510-29-P