The Department of Health Care Services (DHCS) issued updates and clarifications for Managed Care Plans (MCPs) and Dental Managed Care Plans (DMCs) regarding new federal guidelines concerning the grievance and appeals process.  These rules went into effect July 1, 2017.

The new guidelines clarify some definitions that were a bit fuzzy.  “Actions” are now referred to as “Adverse Benefit Determinations”. However, the new definition encompasses all previously existing elements of “Actions.”  For even further clarification, the new guidelines separately define “Grievance” and “Appeal.”

MCPs must make decisions on requests for services within five (5) business days from receiving reasonably necessary information from a patient and/or provider. However, the decision may be extended to 14 calendar days if there is a well-documented reason to extend to the 14 calendar days. This extension would be allowed if more documents were required or discussion with the treating physician is delayed. The decision is prohibited from being extended if the health and welfare of the member is in jeopardy. Otherwise, the lack of decision by the MCP is considered an adverse benefit determination that triggers appeal rights for the provider and/or patient.

Expedited requests must be considered by the MCP within 72 hours. However for providers, under the Knox-Keene act, which does include the 1367.01 (h) (3), if case management calls, the plan has 24 hours or less to make a decision.  If they do not, the treatment is deemed to be authorized. If services are to be terminated, suspended, or reduced, MCPs must notify beneficiaries at least ten (10) days before the action is to take place.

The new regulations now call “Notice of Action” (NOA) a “Notice of Adverse Benefit Determination”, but to not confuse anyone the DHCS will retain the acronym “NOA”. Written notices (NOAs) need to be dated and postmarked within two (2) days of the decision. Starting July 1, DHCS requires MCPs to use a revised NOA template and “Your Rights” attachment. The revised NOA includes information about requesting information relevant to the NOA at no cost.

These new guidelines spell out what information must be listed in the NOA when the decision is based on medical necessity. Otherwise, NOAs must provide a clear and concise explanation for the decision. These NOAs must be translated into required threshold languages. If the clinical information cannot be translated, the beneficiary must be informed how they can get a verbal translation of the information.

Because of changes to the federal regulations about appeals, DHCS has updated NOA language regarding beneficiary rights to review of adverse decisions. Beneficiaries must request an internal appeal within 60 calendar days of the date on the NOA.

State hearings are an option only after filing an internal grievance. For these reasons, the “Your Rights” attachment for NOAs will primarily inform a beneficiary about internal appeals, while a Notice of Appeal Resolution (NAR) will provide information about filing for a state fair hearing or IMR.

A plus for patients and  physicians is that the new federal regulations now allow beneficiaries, their providers, or authorized representatives to file grievances at any time in either writing or orally. Prior to July 1, the aggrieved party had just 180 days to file. Of equal importance, MCPs must acknowledge grievances in writing within five (5) calendar days of receiving the grievance. MCPs have 30 calendar days to resolve the grievance. Expedited grievances must be considered within 72 hours, so MCPs must timestamp these requests.

Under the new regulations, beneficiaries or their authorized representatives will have to file appeals orally or in writing with MCPs within 60 calendar days from the date of the NOA (as opposed to the current 90 days).  Oral appeals must be followed with a signed, written copy of the appeal; MCPs must assist beneficiaries in preparing a written appeal.  MCPs must acknowledge receipt of an appeal within five calendar days, and they must resolve the appeal within 30 days.  Expedited appeals must be resolved within 72 hours of receipt.

So what happens when an appeal is not completely in favor of the beneficiary? Well, MCPs now must send a NAR with the rationale (clinical information for medical necessity denials, contract provisions for non-covered benefits). The NAR also must include a “Your Rights” attachment outlining rights to request a state hearing within 120 calendar days, to receive aid paid pending, and to request an IMR (for Knox-Keene licensed plans).

What happens if the patient’s appeal is favorable? In the case of successful appeals, the MCPs must send written notification to the beneficiary and authorize the services no later than 72 hours from resolution.

If unsuccessful on the appeal front, the final step is for beneficiaries to request a state fair hearing within 120 days of exhausting an MCP’s internal appeal process and receiving a NAR.  The State must reach a decision within 90 days of the date of the request, and within three (3) working days for an expedited request.  MCPs would have 72 hours to comply with a hearing decision.