February 6, 2014 by Lisa Brammer
Wow, it’s already February. It’s hard to believe we are already in the second month of 2014. February, as usual, is shaping up to be a fairly busy month. We had Groundhogs day on February 2nd (which issued a forecast of 6 more weeks of winter for us here in Wisconsin) and tomorrow the opening ceremonies for the winter Olympics in Sochi, Russia will air on TV. In the middle of the month we have Valentine’s Day on the 14th and President’s Day on February 17th this year.
I’m sure none of these things will catch you by surprise, but did you know that now that we are in February, your medical practice (or facility) could be at financial risk due to the Affordable Care Act’s 90-day premium grace period?
So what exactly is the 90-day grace period you’ve heard about? The ACA requires insurers to give individuals who qualify for tax-subsidies (Advanced Premium Tax Credits) on plans purchased through the marketplace a three-month grace period to pay their premiums. This means that even if an individual does not pay their premiums, the plan is not allowed to drop their coverage for 90 days.
Initially, Obamacare had insurance companies paying all of the claims from hospitals and doctors during the 90-day grace period. A significant revision to the Affordable Care Act took place in March of 2013 by the Center for Medicare and Medicaid Services (CMS). This amendment requires insurers to pay any claims filed during the first thirty-days of the grace period. However, any claims filed during days thirty-one through ninety may be declared pending until the individual pays their premiums. When 95 percent of the premium is paid, the plan will retroactively pay any valid pending claims. But, if the individual does not pay their premiums during the grace period coverage will dropped and any pending claims need not be paid.
The final regulation places over 66 percent of the liability for the grace period on providers—-a far cry from the zero liability (other than cost-sharing and deductibles) they originally were assigned.
In my opinion, a good way to limit your liability is to update your financial agreement to include language in which patients agree to pay for services received if their insurance coverage lapses for any reason—nonpayment included. It’s not enough to just update your agreement; you also should ask patients if they understand the agreement so there is no misunderstanding regarding expectation for payment. You should also be more aggressive with your front-end collection practices. With copayments, deductibles and other cost-sharing on the increase, I know I don’t need to tell you how important it is to collect copays at the time of service. But, I can tell you I’ve gone to providers—-primary care and specialist alike—-who told me when I asked if they wanted my copay, “You can pay now if you’d like or we will just send you a bill.” It’s important to have your front-end people knowledgeable and comfortable in the art of collecting money.
In September, 2013 The Medical Group Management Association (MGMA) Legislative and Executive Advocacy Response Network (LEARN) conducted a study called ACA Insurance Exchange Implementation. One of the questions asked, “What impact do you expect ACA exchange products will have on your practice’s patient population size?” Over 45 percent of respondents thought they would see either a slight or a significant increase, yet less than 6 percent said they planned on hiring additional administrative staff.
With all the changes from healthcare reform underway, confusion is widespread. Many patients have insurance for the first time and are having difficulty navigating their coverage; others are transitioning to plans with great cost-sharing, and there are some who purchased insurance on the exchanges that are unsure of the status of their insurance coverage. All of this extra work can really put a strain on your staff.
Partnering with a third-party collection agency to handle early-outs can be a good way to keep your accounts receivables from falling behind. Typically, these accounts are worked as the client providing seamless service to patients. Payment plans can be set-up and monitored all while keeping clients up-to-date on activity. Some collection agencies can provide customizable solutions that can really benefit a practice during these chaotic times.
By being proactive and partnering early in the process, providers can prevent a backlog of accounts with increasing A/R days which will result in fewer accounts going into collections.
Founded in 1950, United Credit Service, Inc. is a full service revenue cycle management and debt collection agency in Wisconsin providing highly effective, customized one on one management and recovery solutions for our business partners. We offer pre-service collection solutions as well as traditional back-end collections. Visit our website at http://www.unitedcreditservice.com or call 877-723-2902.