The devil is in the details; healthcare providers may end up holding the bag

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While 8 million people may have signed up for coverage under the health insurance exchanges (HIXs), the world is now watching to see how many of them pay their premiums under affordable care. The current uninsured rate is at its lowest in years, according to recent reports from Gallup, but industry experts indicate those numbers may fluctuate based on people’s continued ability to pay premiums. In an effort to offer consumers ample time to pay their insurance premiums under the new healthcare law, a provision was included to give them a 90-day grace period. While the grace period may be beneficial to consumers, it increases the financial risk and potential financial burden to healthcare providers.

Under the new healthcare law, if a patient who receives an advance premium tax credit does not pay his or her health insurance premiums in full, they enter a 90-day grace period. During the first 30 days of said grace period, the patient will continue to have health insurance coverage, and the patient’s health insurer will pay the claims for health care services during that time. If the patient enters the second or third month of the grace period, the insurer may pend or hold any claims for health services provided to that person. If the person goes on to pay his premiums in full before the end of the grace period, the insurer will pay the claims. If the person does not pay the premiums in time, the insurer will not extend coverage for that person for the second or third month of the grace period, meaning the patient is then responsible for paying the entire bill for services rendered during those two months.

From the perspective of the healthcare provider, the grace period adds additional financial risk and may be detrimental to a practice depending on the number of exchange patients the practice serves. The amount of uncompensated care, as reported in January by the American Hospital Association, rose to $41 billion in 2011, up 5 percent from 2010. In a policy update at this week’s meeting of the Radiology Business Management Association, it was mentioned that the grace-period provision would continue to be monitored as new legislation may change some of the provisions under the healthcare reform law.