Providers worry that ACA grace period could leave them in the lurch

90-day grace period would apply to 80% of consumers

A CMS rule interpreting the Affordable Care Act (ACA) gives patients a 90-day grace period on premium payments, but health care providers argue that it puts them at risk of providing services for which they are never reimbursed, Modern Healthcare reports.

Details of the CMS rule

Current regulations on late and outstanding premium payments vary by states, with some states allowing insurers to drop consumers' policies without advance notice. Other states require insurers to offer a 30-day grace period before dropping customers' plans. If coverage is dropped for nonpayment, providers must work directly with patients to collect payments, according to Jennifer Kowalski, vice president of health reform practice at Avalere Health.

Under the CMS rule, which was released in March, consumers will get a 90-day grace period to pay their outstanding premiums before insurers are permitted to drop their coverage. The rule will apply to consumers in all states who purchase subsidized coverage through the Affordable Care Act's (ACA) insurance exchanges. According to Kowalski, the new rule would benefit about 80% of consumers in the exchanges.

The rule also requires insurers to reimburse providers during the first 30 days of the 90-day grace period. If a consumer still fails to make a payment after 90 days and his or her coverage is dropped, insurers will not be required to pay for claims incurred during the last 60 days of the grace period.

Provider groups criticize rule, take up issue with CMS

The Missouri State Medical Association (MSMA), the Missouri Hospital Association (MHA), and the Medical Group Management Association-American College of Medical Practice Executives (MGMA-ACMPE) are among the groups that have pressed CMS to revise the rule, Modern Healthcare reports.

In an Aug. 12 letter to CMS Administrator Marilyn Tavenner, MHA CEO Herb Kuhn and MSMA Executive Vice President Thomas Holloway wrote that the rule "unduly burdens physicians, hospitals and other health care providers" by making them directly collect payments from patients, "put[ting] them at an unfair and significant risk for providing uncompensated care to patients."

"If the current rules cannot be amended or interpreted in a more equitable manner, we fear there will be a widespread reluctance among physicians and other providers to participate in exchange plans," Kuhn and Holloway wrote. They warned that consumers could use the 90-day grace period to circumvent premiums and obtain free health care.

In a July 3 letter to Tavenner, MGMA-ACMPE CEO Susan Turney criticized the rule's provision that the exchanges' health plans "should notify all potentially affected providers as soon as practicable when an enrollee enters the grace period." Turney wrote that providers should be notified as soon as the grace period begins, otherwise "it will be too late for physicians to engage patients and make informed decisions prior to furnishing potentially uncovered services" (Block, Modern Healthcare, 8/13 [subscription required]).

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