Claims Procedures for Employee Benefit Plans

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.

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\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.

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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.

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\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.

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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).

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\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.

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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.

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\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.

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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