As the industry prepares itself for another round of healthcare reform, providers should carefully monitor the coverage of new and existing patients presenting with insurance policies obtained through State and Federal Exchange programs.
Legislation introduced by Republican lawmakers aimed at repealing and/or replacing portions of the ACA generally eliminates individual and employer responsibility provisions mandating continuous coverage retroactive to 2016. As “appropriate changes” are made, one can safely assume the instability of the individual marketplace will be of great concern to providers and for Qualified Health Plan (QHP) enrollees. One reasonably predictable consequence of this instability could require providers to review their willingness to accept an even greater risk of rendering uncompensated care when treating QHP enrollees receiving federal subsidies at the end of 2017.
Briefly, as has been widely discussed, enrollees in QHPs are afforded a 90-day “grace period” within which the QHP enrollee has 90 days to pay outstanding premiums before being terminated from his or her exchange plan. While exchange payors are obligated to process and pay claims for the first month and notify providers of their enrollee’s delinquency after the first 30 days of non-payment, risk is passed to providers in the remainder of this grace period. Claims are “pended” by carriers until such time as enrollees either satisfy outstanding premiums or, alternatively, are terminated after 90 days of non-payment. The member’s enrollment status prior to the end of his or her grace period, in many instances, prevents collection from the patient until the member becomes formally terminated.
Stakeholders have expressed concern that this 90-day grace period could be abused, as individuals could be “covered” for 12 months while only paying nine months of premiums. Review of data published by CMS discounts these concerns, as failure to attain continuous coverage has been observed to be the result of changes in the member’s enrollment status and external factors not inherently related to abuse of the grace period during the final three months of the calendar year.1, 2
As logical derivatives of proposed Republican healthcare reform remove both economic and eligibility inducements for enrollees to remain covered as part of ACA exchanges, key constraints tempering concern for subsidized QHP enrollees abusing 90-day grace periods would also be eliminated.
Marketplace instability and removal of penalties make the transfer of risk for days 31 to 90 of this grace period a realistic concern for providers who wish to maximize cash flow and limit bad debts at the end of CY 2017. All staff should take additional steps to ensure individuals are eligible before and upon presentation and are not currently in any grace period, and to expeditiously communicate “pended” claims within and between all interested departments. Targeted questions and memorialization of all communications with exchange payors, reasonable and appropriate inquiries with QHP enrollees in grace periods, and a review of individual payors’ grace period notification protocols may all help alleviate potentially negative outcomes for the patient and provider.
Documentation of the above good faith efforts will allow in-house departments or contracted vendors to verify payors properly followed requirements imposed by federal regulations during grace periods and ensure any and all liabilities covered by the patient’s QHP are quickly identified and recovered.
Ross Steele, Esq., is an Associate Attorney at Miller & Milone, P.C. His practice focuses mainly on reviewing global trends and claim-specific issues within the framework of contractual agreements and regulatory provisions governing payors in claim adjudication, specifically assessing how developments in federal and state healthcare policy impact revenue cycle and payment models. He received his Juris Doctor from the Maurice A. Deane School of Law at Hofstra University, previously served as a senior fellow for The Gitenstein Institute for Health Law and Policy, and is licensed to practice in the states of New York and New Jersey.