Federal Employees Health Benefits Acquisition Regulation Filing Health Benefit Claims; Addition of Contract Clause

60 FR 16056Federal Register, Volume 60 Issue 60 (Wednesday, March 29, 1995) [Federal Register Volume 60, Number 60 (Wednesday, March 29, 1995)] [Rules and Regulations] [Pages 16056-16058] From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ] [FR Doc No: 95-7792] ======================================================================= ----------------------------------------------------------------------- OFFICE OF PERSONNEL MANAGEMENT 48 CFR Parts 1604 and 1652 RIN 3206-AG30 Federal Employees Health Benefits Acquisition Regulation Filing Health Benefit Claims; Addition of Contract Clause AGENCY: Office of Personnel Management. ACTION: Interim regulations with request for comments. -----------------------------------------------------------------------

60 FR 16056SUMMARY: The Office of Personnel Management (OPM) is issuing interim regulations to add a new contract clause of the Federal Employees Health Benefits Acquisition Regulation (FEHBAR). The clause clarifies for both FEHB carriers and covered individuals the circumstances under which OPM may render a decision regarding a covered individual who asks OPM to review a health benefits plan's denial of a claim if the plan has either affirmed its denial when the covered individual requested reconsideration, or failed to respond to the covered individual's request for reconsideration as provided by OPM's regulations. The clause further clarifies the circumstances under which claimants may seek court review of benefit denials under the FEHB Program. The purpose of these interim regulations is to clarify that covered individuals who wish to bring legal action regarding a denial of an FEHB benefit must pursue such claim against OPM. Further, the interim regulations clarify the administrative review process that must precede legal action in the courts. DATES: These interim regulations are effective March 29, 1995. Comments must be received on or before May 30, 1995. ADDRESSES: Send written comments to Lucretia F. Myers, Assistant Director for Insurance Programs, Retirement and Insurance Service, Office of Personnel Management, P.O. Box 57, Washington, DC 20044; or deliver to OPM, Room 3451, 1900 E Street NW., Washington, DC; or FAX to (202) 606-0633. FOR FURTHER INFORMATION CONTACT: Margaret Sears, (202) 606-0004.

60 FR 16056SUPPLEMENTARY INFORMATION: Historically, OPM has required that [[Page 16057]] covered individuals who want to bring suit because an FEHB carrier has denied their claim for health benefits must sue the carrier, not OPM. These interim regulations provide that legal actions arising out of a denial of FEHB benefits should be brought against OPM rather than the FEHB carrier that made the initial denial decision. Because OPM has the authority under the FEHB law to order the carrier to pay the claim, OPM has determined it is appropriate under current statute for the covered individuals to bring suit against OPM if OPM declines to order the carrier to pay the claim. The clause clarifies the process and circumstances for bringing legal actions under the FEHB Program and gives the administrative review process that must be completed before suit is brought. The legislative history of Sec. 8902(j), title 5, United States Code, shows that Congress intended OPM (at that time the Civil Service Commission) to provide an administrative appeal process, binding upon the carriers, that would save covered individuals the expense and delay of being forced into the courts to recover on meritorious claims for benefits. Based upon this directive and its central role in the administration of the FEHB Program, OPM established a detailed administrative review process for benefits claims leading to a final decision on such claims by OPM. It is OPM's view that this administrative review process must be followed before legal action is pursued in the courts.

60 FR 16056Further, the matter to be reviewed by a court upon appeal is the OPM decision affirming the carrier's denial of benefits, with the court's review being limited to an examination of OPM's administrative decision to deny the claim for payment or services. Health insurance contracts under the FEHB Program are Federal contracts under 5 U.S.C., chapter 89. Accordingly, legal actions concerning disputes arising or relating to those contracts are controlled by Federal, rather than State law. Congress, in the FEHB Act, mandated Federal uniformity for all matters that relate to (1) the nature or extent of coverage; (2) benefits; and (3) payment of benefits under the FEHB Program. By statute, all health insurance contracts require the carrier to agree to pay or provide a health service or supply in an individual case if OPM finds that the covered individual is entitled to the benefit under the terms of the contract. Congress also directed OPM to take a central role in determining whether a health service or supply should be provided in individual cases to covered individuals and, if it should be provided, to require carriers to pay for such health service or supply. These interim regulations reaffirm the principle of uniformity in the FEHB Program by providing that in judicial disputes regarding the denial of a health benefits claim, review is to be limited to the record that was before OPM and that was the basis of the OPM decision to disallow the benefit. In the event that an appropriate court concludes that benefits should have been awarded under the FEHB Act, the court possesses ample authority to require OPM to order that such payments be made to the covered individual from the carrier.

60 FR 16056These interim regulations clarify that OPM intends for its decision to be upheld unless the Court concludes that the OPM decision affirming the carrier's denial of benefits was inconsistent with the standard for final agency action under applicable Federal law. The new clause reflects the administrative review procedures that must precede court review. These procedures are prescribed by regulations at 5 CFR 890.105 and reflects minor changes that OPM is making to 5 CFR 890.105 by interim regulations being published in conjunction with this interim regulation The new clause also reflects regulations and 5 CFR 890.107 regarding court review and reflects changes OPM is making to 5 CFR 890.107 by regulations also being published in conjunction with this interim regulations. OPM proposes to incorporate these procedures into the FEHB contract by adding a new clause 1652.204-72, Filing Health Benefit Claims/Court Review of Disputed Claims, to Subpart 1652.2 of the Federal Employees Health Benefits Acquisition Regulation (FEHBAR).

60 FR 16056Regulatory Flexibility Act I certify that this regulation will not have a significant economic impact on a substantial number of small entities because the regulation merely incorporates administrative procedures and regulatory requirements into FEHB contracts. List of Subjects in 48 CFR Parts 1604 and 1652 Government employees, Government procurement, Health insurance. Office of Personnel Management. James B. King, Director. Accordingly, OPM proposes to amend 48 CFR chapter 16 as follows: PART 1604--ADMINISTRATIVE MATTERS 1. The authority citation for parts 1604 and 1652 continue to read as follows: Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301. 2. In part 1604 subpart 1604.71 is added to read as follows: Subpart 1604.71--Disputed Health Benefit Claims 1604.7101 Filing Health Benefit Claims/Court Review of Disputed Claims. Guidelines for an Federal Employees Health Benefit (FEHB) Program covered individual to file a claim for payment or service and for legal actions on disputed health benefit claims are found at 5 CFR 890.105 and 890.107, respectively. The contract clause at 1652.204-72 of this chapter, reflecting this guidance, must be inserted in all FEHB Program contracts. PART 1652--CONTRACT CLAUSES 3. Subpart 1652.2 is amended by adding section 1652.204-72 to read as follows: Subpart 1652.2--Texts of FEHBP Clauses 1652.204-72 Filing Health Benefit Claims/Court Review of Disputed Claims. As prescribed in 1604.7101 of this chapter, the following clause must be inserted in all FEHB Program contracts. FILING HEALTH BENEFIT CLAIMS/COURT REVIEW OF DISPUTED CLAIMS

60 FR 16056(a) General. The Carrier resolves claims filed under the Plan. All health benefit claims must be submitted initially to the Carrier. If the Carrier denies a claim (or a portion of a claim), the covered individual may ask the Carrier to reconsider its denial. If the Carrier affirms its denial or fails to respond as required by paragraph (b) of this clause, the covered individual may ask OPM to review the claim. A covered individual must exhaust both the Carrier and OPM review processes specified in this clause before seeking judicial review of the denied claim. (b) Time limits for reconsidering a claim. (1) The covered individual has 1 year from the date of the notice to the covered individual that a claim (or a portion of a claim) was denied by the Carrier in which to submit a written request for reconsideration to the Carrier. (2) The Carrier has 30 days after the date of receipt of a timely-filed request for reconsideration to: (i) Affirm the denial in writing to the covered individual; (ii) Pay the bill or provide the service; or (iii) Request from the covered individual or provider additional information needed to [[Page 16058]] make a decision on the claim. The Carrier must simultaneously notify the covered individual of the information requested if it requests additional information from a provider. The Carrier has 30 days after the date the information is received to affirm the denial in writing to the covered individual or pay the bill or provide the service. The Carrier must make its decision based on the evidence it has if the covered individual or provider does not respond within 60 days after the date of the Carrier's notice requesting additional information. The Carrier must then send written notice to the covered individual of its decision on the claim.

60 FR 16056The covered individual may request OPM review as provided in paragraph (b)(3) of this clause if the Carrier fails to act within 30 days after the covered individual's request for reconsideration or the Carrier's receipt of additional information. (3) The covered individual may write to OPM and request that OPM review the Carrier's decision if the Carrier either affirms its denial of a claim or fails to respond to a covered individual's written request for reconsideration within 30 days after the date it receives the request or within 30 days after the date it receives the additional information requested. The covered individual must submit the request for OPM review within the time limit specified in paragraph (e)(1) of this clause. (4) The Carrier may extend the time limit for a covered individual's submission of additional information to the Carrier when the covered individual shows he or she was not notified of the time limit or was prevented by circumstances beyond his or her control from submitting the additional information. (c) Information required to process requests for reconsideration. (1) The covered individual must put the request to the Carrier to reconsider a claim in writing and give the reasons, in terms of applicable brochure provisions, that the denied claim should have been approved. (2) If the Carrier needs additional information from the covered individual to make a decision, it must: (i) Specifically identify the information needed; (ii) State the reason the information is required to make a decision on the claim; (iii) Specify the time limit (60 days after the date of the Carrier's request) for submitting the information;

60 FR 16056and (iv) State the consequences of failure to respond within the time limit specified, as set out in paragraph (b)(2) of this clause. (d) Carrier determinations. The Carrier must provide written notice to the covered individual of its determination. If the Carrier affirms the initial denial, the notice must inform the covered individual of: (1) The specific and detailed reasons for the denial; (2) The covered individual's right to request a review by OPM; and (3) The requirement that requests for OPM review must be received within 90 days after the date of the Carrier's denial notice and include a copy of the denial notice as well as documents to support the covered individual's position. (e) OPM review. (1) If the covered individual seeks further review of the denied claim, the covered individual must make a request to OPM to review the Carrier's decision. Such a request to OPM must be made: (i) Within 90 days after the date of the Carrier's notice to the covered individual that the denial was affirmed; or (ii) If the Carrier fails to respond to the covered individual as provided in paragraph (b)(2) of this clause, within 120 days after the date of the covered individual's timely request for reconsideration by the Carrier; or (iii) Within 120 days after the date the Carrier requests additional information from the covered individual, or the date the covered individual is notified that the Carrier is requesting additional information from a provider. OPM may extend the time limit for a covered individual's request for OPM review when the covered individual shows he or she was not notified of the time limit or was prevented by circumstances beyond his or her control from submitting the request for OPM review within the time limit.

60 FR 16056(2) In reviewing a claim denied by the Carrier, OPM may (i) Request that the covered individual submit additional information; (ii) Obtain an advisory opinion from an independent physician; (iii) Obtain any other information as may in its judgment be required to make a determination; or (iv) Make its decision based solely on the information the covered individual provided with his or her request for review. (3) When OPM requests information from the Carrier, the Carrier must release the information within 30 days after the date of OPM's written request unless a different time limit is specified by OPM in its request. (4) Within 90 days after receipt of the request for review, OPM will either: (i) Give a written notice of its decision to the covered individual and the Carrier; or (ii) Notify the individual of the status of the review. If OPM does not receive requested evidence within 15 days after expiration of the applicable time limit in paragraph (e)(3) of this clause, OPM may make its decision based solely on information available to it at that time and give a written notice of its decision to the covered individual and to the Carrier. (f) Court review. (1) A suit to compel enrollment under Sec. 890.102 of Title 5, Code of Federal Regulations, must be brought against the employing office that made the enrollment decision. (2) A suit to review the legality of OPM's regulations under this part must be brought against the Office of Personnel Management. (3) Federal Employees Health Benefits (FEHB) carriers resolve FEHB claims under authority of Federal statute (chapter 89, title 5, United States Code). A covered individual may seek judicial review of OPM's final action on the denial of a health benefits claim.

60 FR 16056A legal action to review final action by OPM involving such denial of health benefits must be brought against OPM. The recovery in such a suit will be limited to the amount of benefits in dispute. (4) An action under paragraph (f)(3) of this clause to recover on a claim for health benefits: (i) May not be brought prior to exhaustion of the administrative remedies provided in paragraphs (a) through (e) of this clause; (ii) May not be brought later than December 31 of the third year after the year in which the care or service was provided; and (iii) Will be limited to the record that was before OPM when it rendered its decision affirming the Carrier's denial of benefits.

60 FR 16056(End of Clause) [FR Doc. 95-7792 Filed 3-28-95; 8:45 am] BILLING CODE 6325-01-M