Affordable Care Act implementation

Tuesday, July 01, 2014 12:24 PM

Kate Alfano, CMS contributing writer

CMS to DOI: Clarify notification during the 90-day grace period

With the large number of Coloradans newly insured through the Affordable Care Act (ACA) comes a risk for payment issues to physician practices due to a provision in the law known as the 90-day grace period. CMS Immediate Past President Jan Kief, MD, testified at a hearing of the Colorado Division of Insurance on May 1, 2014, about a proposed state rule that would clarify the insurers’ responsibility for notifying patients and physicians when enrollees enter this grace period, and CMS President John L. Bender, MD, provided comments through a letter to DOI Commissioner Marguerite Salazar.

Per federal rule, patients who receive federal advance payment tax credits to purchase plans through the state health insurance exchange have a 90-day grace period for non-payment of premiums. During the first 30 days the health benefit plan must pay for claims as if the patient were eligible, but in the last 60 days the plan can suspend claims. If the patient’s coverage is cancelled after 90 days because of non-payment of premiums, the insurer may deny all suspended claims for services furnished during the 31-90 day time period.

Physician practices could therefore be in a position of providing services for up to 60 days, only to be stuck with the prospect of either having to absorb the costs as bad debt or attempting to collect arrears from patients who may not have the means to pay these bills given that they couldn’t pay for their premiums. “If the carrier denies the claim(s) for services rendered in the second or third months of the grace period, this will create a financial burden on physicians and other health care providers, as well as be a disincentive for participating in the health care exchange in our state,” Bender wrote in the letter.

The ACA requires insurers to notify the enrollee’s physician and other health care providers when a patient enters into the second and third month of the grace period, but the notification requirement is vague, stating “Issuers should notify all potentially affected providers as soon as practicable when an enrollee enters the grace period, since the risk and burden are greatest on the provider.”

The proposed regulation – 4-2-48 – would require carriers to provide notice to policyholders advising of the premium payment delinquency, of their intent to terminate coverage due to non-payment of the premium, and that they may be required to pay all amounts owed for services incurred after the first month of the grace period. The regulation would require carriers to notify providers with pended claims incurred in the second and/or third month of the policyholder’s grace period that the claims may be denied if no further premium payments are received from the policyholder.

Kief testified that the proposed regulation should include language that will ensure providers receive eligibility information in a timely manner, and in a manner detailed enough so that they can anticipate any potential problems. “Unless physicians and other providers are notified as soon as possible that an enrollee has entered into the second or third month of the grace period, physicians and health care providers cannot anticipate or mitigate the effect of claims denials and otherwise the financial aspects of their practices,” Bender wrote in his comments.

Kief said, “The division has the unique opportunity to not only address the consumer and health plan issues related to grace periods but also the concerns of those actually delivering the care to the policyholder. These proactive measures will give our health care professionals the assurance they need to continue providing access to care for the Coloradans receiving advance tax payments through the purchase of exchange products.”

The Colorado Association of Health Plans surveyed six of its member plans and all reported that they offer immediate eligibility verification by phone that is updated either daily or in real-time; five can immediately report by phone the patient’s effective date and whether the patient is in the grace period. Five offer verification by electronic transaction and four offer verification by secure web portal.

One plan reported that it will have a field in its core system labeled “paidthrough date” that indicates the end of the month that a patient’s premium is paid through. If on the date of eligibility check that date is more than one month past, then the patient is in the threemonth grace period. That information, along with an explanation, would be provided by phone, electronic transaction or secure web portal.

Kief testified on behalf of the Colorado Medical Society, the Colorado Hospital Association, the Colorado Medical Group Management Association, the Colorado Academy of Family Physicians, the Denver Medical Society, University Physicians, the Colorado Society of Anesthesiologists, the Colorado Orthopaedic Society, the Colorado Chapter of the American College of Physicians, and Pikes Peak Professional Association of Health Care Office Management.

Bender submitted comments on behalf of the Colorado Medical Society, the Denver Medical Society, the Colorado Academy of Family Physicians, University Physicians, the Colorado Medical Group Management Association, Pikes Peak Professional Association of Health Care Office Management, the Colorado Orthopaedic Society, and the Colorado Chapter of the American College of Physicians.

The final regulation will take effect on July 1, 2014.