December 6, 2000


Patient Bill of Rights
- It appears that this bill is dead in the House and Senate for this session. President Clinton has said he will consider asking the Department of Labor to publish the main components of PBR as Claim Procedures Regulation that are due out by November 7.
Some highlights:

When presented with a clean claim, a payor must approve or deny within 15 days.  A "clean" claim is one where no additional information/correction is needed. When additional information/correction is needed, it must be requested within 5 days of the receipt of the claim.  If there is no answer within 45 days from patient or provider, claim must be denied.  An urgent care claim (yet to be defined) must be approved or denied within 72 hours.

There are also Claim Denial Review Procedures, new standards in claim appeal procedures.  Generally, now a member must appeal a denial within 30 to 60 days of notification.  He appeals to the claim payor and finally to the plan sponsor.  There is no further appeal after a decision by the plan sponsor (the employer). The new regulation allows 180 days to appeal a denial to the claim payor.  This is the last resort for appeal. After this, the member may sue for damages.  Medical issues (denial of a procedure) must include an opinion from a medical doctor.

These regulations are set to be effective 180 days after publication.

Medicare and Social Security

    1. Social Security cost of living adjustment will be offset by a higher Medicare Part B premium charge:

    2. Medicare part B premiums will increase 10%;

    3. A modest prescription drug plan will probably be available in 2001 and

    4. The October 99 Medicare HMO funding cuts that drove Medicare HMO's out of operation are being "given back". However, President Clinton has stated he will veto the bill.


New Summary Plan Descriptions Format. Department of Labor has set forth new language for all SPDs. It will include information on HIPAA, Certificates of Creditable Coverage, and ERISA Rights. Expect these regulations to be out by December 20. It will impact all self-funded and fully insured health plans.  This will also cause new plan documents to be produced.

Cafeteria Plan "Changes of Status" Rules
These rules effective January 1, 2001, generally clarify "change of status" provisions.

    1. Making it more difficult to add a spouse, midyear, when that spouse has a benefit reduction or premium increase in his/her employers plan.

    2. Resident changes may cause an higher pretax premium deduction if the employee now selects a POS plan, qualifies as a change of status.

    3. HIPAA special enrollment rights, FMLA changes and court decrees i.e. QDROS, now qualify as change of status.  To stay within the bounds of your cafeteria plan, a change in status during the year must be consistent with a true loss or gain in coverage.

New COBRA Regulations
These clarifying regulations answers questions that have developed since 1987.

    1. Core and non-core  benefits are determined by the plan.  If you have one plan for health, dental and vision, all or none must be elected. If you have separate plans with separate premium changes, then the participant may elect one or more.
    2. COBRA elections and premium payments may be done by anyone; i.e. anyone can elect for another or pay for another.

    3. The 12 month rule had been clarified to state that the plan may select the date (generally the renewal date) for payment increases.

    4. Insignificantly short payments cannot cause termination; only if the payment is not made up in 30 days.

    5. When business reorganizes, the new entity must take responsibility for COBRA participants.

Medical Privacy - Final Rules Likely before 2001

Our best estimate of new Federal regulations includes:

    1. What information will be protected - it will likely be psychotherapy - but plan sponsor have a right to the information.

    2. Employee written authorization is required to dissimulate medical or psychotherapy information except when dissimulated to law enforcement, public health officials, claim auditors, or for payment of a treatment.

    3. Companies must designate a Privacy Officer who is responsible for training and writing a security plan with documentation.

    4. There will be a mandatory notice spelling out employee rights. More information will follow at this site as soon as it is available.

While every effort has been made to ensure accuracy in the above information, only your attorney or CPA should be relied on to answer questions about a particular situation.


Cost Area

Expected Change









Rx Card


Medical Insurance costs are expected to continue to rise in 2001.  The increases, as shown above, are primarily due to much higher medical inflation, higher utilization, higher reinsurance costs caused by losses during the last three years, and by less effective Managed Care.  There is also strong resistance to cost cutting by all provider organizations; per diem and DRG fee arrangements are dying a quick death.  Physicians are forming Unions to combat Managed Care Organizations.  Medicare and Medicaid reimbursement levels are much lower, making "cost shifting" to non government plans even more prevalent.  However, the biggest factor seems to be the cost of prescriptions. Advertising and marketing by drug companies has created tremendous demand, especially for signature drugs. Cost shifting from government controlled costs in Europe and Canada has impacted US costs. Technology and Research and Development still get lots of attention for new drugs.  Utilization is higher.

All in all, drug costs continue to be a major factor in your medical plan renewal increase.  Health plans are fighting back. They are returning to indemnity plans. They no longer offer Rx card, but make it part of the health plan or they are going to the three tier drug plans, asking the member to pay a higher copay for non-formulary drugs.

 Corporate Insurance Concepts, Inc. has the know how to structure the right plan for you while keeping your employees satisfied and holding down costs. Contact us by e-mail, or by phone at (800) 601-2424.

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