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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