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Beware the Reimbursement Gap

Greg Freeman, June 25, 2014

If a patient doesn't pay his health insurance premiums, the insurer doesn't have to pay the provider for care rendered during the grace period. That means that up to two months of provider services may not be reimbursed.

This article appears in the July, 2014 issue of Managed Care Contracting and Reimbursement Advisor.

A little-known provision in the Patient Protection and Affordable Care Act could leave physicians holding the bag when patients don't pay their insurance premiums, yet doctors are obligated to provide care during a grace period.

If the patient doesn't pay up, the insurer doesn't have to pay the doctor for care provided in the grace period. That means that up to two months of your services are not reimbursed.

The reimbursement gap is made possible by rules that extend the time services are deemed covered in the event that a lapse in payment occurs. Current laws and regulations vary by state, with some states allowing insurers to drop consumers' policies without advance notice and others requiring a 30-day grace period.

The PPACA imposes a mandatory 90-day grace period for patients to pay their outstanding premiums and requires insurers to reimburse providers for care during the first 30 days of the grace period.

In that situation, the PPACA provides no remedy for providers to recoup the money from the insurer. Physicians who want their money must work directly with patients to collect the balance incurred during days 31–90 of the grace period.

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2 comments on "Beware the Reimbursement Gap"


Bob Sigmond (6/25/2014 at 9:57 AM)
All Physicians should advice all their patients not to sign up with [or continue with] insurers which do not have a grace period throughout the contract and which also do not automatically promptly notify patients when payment is not received on schedule. Failure to do by the insurer proves to the enrollee that the insurer is more interested in the bottom line than in protecting their enrollees, especially when insurer protection is obviously most needed.

Bruce Landes (6/25/2014 at 9:37 AM)
I would not say this is a "little known" provision. It is the reason that the largest oncology practice in Texas will not accept Exchange patients. The margins on chemotherapy drugs are so small that one missed reimbursement can wipe out the margins on 30-50 other doses. A recent physician survey by the TMA showed only 24% of all respondents are accepting ACA patients. This compares to 31% that are accepting Medicaid. In our experience, as a 1500-member IPA in Dallas, this is the most often cited reason that physician members are calling us to ask how they can avoid ACA Exchange patients. One point not stated here is that ONLY people with subsidized ACA premiums have the 90-day grace period - a non-subsidized ACA plan only has the standard 30 days grace for non-payment of premium.