Obscure Obamacare Rule Puts Many Physicians at Financial Risk


The 90-day “payment grace period” for exchange insured patients puts physicians at risk for 60 days if patients don't pay their premiums.

The AMA just announced that physicians and other providers participating in the federal and state health insurance exchanges may not be paid if patients don’t pay their premiums due to a 90-day “grace period” before the policy can be canceled. The AMA says this is a “little known” rule. Hundreds of thousands of physicians and other providers eschewing exchange patients have known this since 2010. Physicians and providers who did not know, need to.

That’s because the Affordable Care Act gives people signing up under healthcare.gov or state insurance exchanges three months to pay their premiums, and to be “fully insured” during that period whether they pay or not.

Insurers are on the hook for benefits for the first month, and providers for the other two. In fairness, insurers are supposed to notify providers if premiums have not been paid. In reality, the programming that is supposed to provide that information largely hasn’t been written yet and what has doesn’t work so well.

Insurers are indemnified for 80 percent of any losses by law. Physicians and other providers are on their own.

Considering that pre-existing conditions must be covered by law, this 90-day free ride can run up some real bills and stick you with them even though services were approved by you in good faith. “Good faith” is the part insurers and providers are bound by, but the exchanges are not.

So, how can practices protect themselves, short of dropping out of exchange plans?

Legally, you can’t other than requiring copays and deductibles at the point of service to mitigate the risk.

For those of you who have been excluded from the insurance exchange plans, a thank you note to the insurer is probably in order.

Those of you who have been included in insurance exchange plans need to continue with open eyes, extreme caution, and ensure your voter registration is in good order.

Candidates promising to fix the multitude of unfunded mandates are sure to be popular in the healthcare community.

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