Committee Updates

This month the Communications Committee would like to highlight Mike Hembree.  Mike has been a member of the SEBC for many years and was president in 2006.   

Currently, Mike is Vice President of Finance and chief financial officer at Printpack, Inc. Printpack is a family-owned business and international manufacturer of flexible packaging materials, with eighteen domestic plants, two in the U.K., two in Mexico, and two under construction in Poland and China.  Its products are used primarily in the food processing industry. 

Mike, a CPA, is responsible for all of Printpack's financial functions. He has managed the development of its accounting and financial systems from the manual era of 1980 to the automated, distributed systems in use today.  Mike also chairs Printpack's 401(K) Plan administrative committee, which has more than $250 million in assets.

Mike grew up in Florida, but has lived in the Atlanta area since 1973.  He and his wife, Pam, have been married since 1975 and have four children: Katie; Chad; Karen and Kevin.  Mike's passion is golf, and he plays as often as possible.  He has chased the little white ball all over Ireland, Scotland, and parts of the U.S., and he enjoys the history and literature connected to the game.

Legislative update - provided by Bard Brockman from Bryan Cave LLP - This is not meant to provide legal advice and you should consult your legal counsel for how this may affect your plan.

 Internal Claims and Appeals, and External Review Procedures

The Departments of Treasury, Labor and Health & Human Services issued a batch of interim final regulations under the Patient Protection and Affordable Care Act last fall.These interim final regulations are effective for plan years beginning on or after September 23, 2010, and they do not apply to grandfathered plans.The regulations set forth a number of clarifications and mandates to go along with and supplement existing Department of Labor regulations governing internal claims and appeals procedures, as well as external review procedures.

The interim final regulations provide the following rules & clarifications:

• A rescission of coverage shall be treated as an "adverse benefit determination" subject to the rules regarding denied claims.
• The maximum time frame within which a plan must notify a claimant of a benefit determination with respect to an urgent care claim is reduced from 72 hours to 24 hours.
• To provide a full and fair review of an adverse benefit determination, a plan must now also provide the claimant, free of charge, any new or additional evidence considered or generated in connection with the claim, as well as an explanation of the rationale underlying the determination before providing notice of the final adverse benefit determination. This new evidence and rationale must be provided to the claimant sufficiently in advance of the final determination to give the claimant a reasonable opportunity to respond.
• The plan must ensure that all claims determinations and appeals are designed to ensure impartiality and independence with respect to the persons making the decisions. For example, decisions regarding hiring, compensation, termination, promotion or other similar matters of a claims adjudicator or medical expert cannot be made based on the likelihood that the individual will support the denial of benefits.
• A plan must now provide notice of an adverse claims determination (in a culturally and linguistically appropriate way) that includes information necessary to identify the claim involved and the reason(s) for the adverse determination.
• If a plan fails to strictly comply with the new requirements regarding internal claims procedures or any previously existing claims and appeals procedure rules, the claimant will be deemed to have exhausted all administrative remedies available under the plan, and may pursue judicial review following the noncompliance.

In addition, if a claimant's appeal of an adverse benefit determination is denied, he or she is entitled to an external review of that determination through an external review process. The Regulations set forth rules determining whether a state or federal external review applies. In the case of a fully-insured plan where a state's external review process provides equivalent consumer protections as those included in the "NAIC Uniform Model Act" (the "Model Act"), the state's external review process will apply. In such a case, it would be the issuer of the insurance policy-not the plan-that would be required to comply with the state or federal external review process, as applicable. At a minimum, the regulations require the state external review process to, among other things:

• review an issuer's decision based on medical necessity, appropriateness, level of care or effectiveness of a covered benefit;
• require issuers to provide claimants notice of their right to a written external review of an adverse benefit determination;
• allow for exceptions to requirement for exhaustion of internal claims and appeals process;
• provide that an issuer pay the cost of the external review;
• not impose a minimum dollar limit on claims eligible for external review;
• allow at least four months to file a request for external review;
• provide that reviews will be randomly assigned to ensure impartiality and independence of the reviewer;
• provide that the decision of the reviewer is binding on the issuer and the claimant and shall be made within 45 days from receipt of the request for external review; and
• provide for expedited review if the adverse determination concerns an admission, availability of care, continued stay, care following emergency services, or concerns a condition for which the standard time frame would jeopardize the life or health of the claimant.

Self-insured group health plans generally are not be subject to state external review processes and mostly will be required to comply with the federal external review process. Where a state has not adopted an external review process that meets the minimum requirements of the Model Act, or has not adopted an external review process at all, the federal review process shall apply to fully-insured plans as well. Although subsequent regulations will frame the federal external review process, it is expected to be similar to the state review processes that satisfy the Model Act and will be operated in accordance with rules similar to those above.

The regulations make clear that the Federal external review process will not apply to determinations of whether or not someone is eligible for benefits under a group health plan. Therefore, if benefits are denied on the basis that the employee or spouse is not eligible for coverage, that denial would not be subject to the Federal external review process. Whether a denial is subject to a state external review process for fully-insured plans will depend on the terms of the state external review process.