The Office of General Counsel issued the following opinion on March 18, 2005 representing the position of the New York State Insurance Department.
Re: Health Insurance Appeals, Coordination with Federal Requirements
Do the time frames for appeals of health care denials established in a regulation by the United States Department of Labor prevail over those established by New York Insurance Law Article 49 (McKinney 2000) or New York Public Health Law Article 49 (McKinney 2002)?
Conclusion
If there is a time frame established by regulation of the United States Department of Labor that would give an appellant more time than that provided by either the New York Insurance Law or New York Public Health Law, the Federal requirement would prevail.
Facts
The inquirer has indicated that a not-for-profit insurer licensed pursuant to New York Insurance Law Article 43 (McKinney 2000 and 2005 Supplement) allows 45 days for appeals, while the regulation promulgated by the United States Department of Labor allows a longer period and inquire which would prevail.
Analysis
New York Insurance Law §§ 4904(c) (McKinney 2000), dealing with internal appeals, and 4914(b)(1) (McKinney 2000), dealing with external appeals, both concerning claims determinations of insurers licensed pursuant to New York Insurance Law Articles 42 (McKinney 2000 and 2005 Supplement) and 43, provide respectively:
A utilization review agent shall establish a standard appeal process which includes procedures for appeals to be filed in writing or by telephone. A utilization review agent must establish a period of no less than forty-five days after receipt of notification by the insured of the initial utilization review determination and receipt of all necessary information to file the appeal from said determination. . . .
The insured shall have forty-five days to initiate an external appeal after the insured receives notice from the health care plan, or such plan's utilization review agent if applicable, of a final adverse determination or denial or after both the plan and the enrollee have jointly agreed to waive any internal appeal. . . . The insured, and the insured's health care provider where applicable, shall have the opportunity to submit additional documentation with respect to such appeal to the external appeal agent within such forty-five-day period; provided however that when such documentation represents a material change from the documentation upon which the utilization review agent based its adverse determination or upon which the health plan based its denial, the health plan shall have three business days to consider such documentation and amend or confirm such adverse determination.
New York Public Health Law §§ 4904(3) (McKinney 2002), dealing with internal appeals, and 4914(2)(a) (McKinney 2002), dealing with external appeals, both concerning claims determinations of Health Maintenance Organizations with a Certificate of Authority in accordance with New York Public Health Law § 4403(1) (McKinney 2002 and 2005 Supplement) have identical requirements.
The United States Department of Labor, effectuating ERISA's claims processing requirements, 29 U.S.C.A. § 1133 (West 1999), has promulgated a regulation, 29 C.F.R § 2560.503-1 (2002). That regulation, 29 C.F.R. § 2560.503-1(h)(3)(i), in so far as it affects group health plans, allows claimants at least 180 days for an internal appeal. The regulation, 29 C.F.R. § 2560.503-1(k), further provides:
(1) Nothing in this section shall be construed to supersede any provision of State law that regulates insurance, except to the extent that such law prevents the application of a requirement of this section.
(2) (i) For purposes of paragraph (k)(1) of this section, a State law regulating insurance shall not be considered to prevent the application of a requirement of this section merely because such State law establishes a review procedure to evaluate and resolve disputes involving adverse benefit determinations under group health plans so long as the review procedure is conducted by a person or entity other than the insurer, the plan, plan fiduciaries, the employer, or any employee or agent of any of the foregoing. . . .
In the case of an appeal by the claimant, since, in the case of an ERISA plan, the 180 days provided by the regulation of the United States Department of Labor is more protective of the claimant than the 45 days provided by New York Insurance Law Article 49 or New York Public Health Law Article 49, the Federal requirement would prevail. The same time period would apply where a health care provider, such as a hospital, appeals as the designee of the claimant under an ERISA plan.
However, since the United States Department of Labor regulation does not allow health care providers to appeal in their own right, where a health care provider does so appeal, with respect to a retrospective adverse determination, New York Insurance Law § 4904(a) and New York Public Health Law § 4904(1), the 45 day time limit would apply, notwithstanding that the appeal affects an ERISA plan.
Further, since the United States Department of Labor regulation does not regulate external appeals, the 45 day limit in New York Insurance Law § 4914(b) and New York Public Health Law § 4914(2) would apply with respect to such appeals.
For additional information one may contact Principal Attorney Alan Rachlin at the New York City office.