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AHA: Hospitals Can Pay Patients' HIX Premiums

Cheryl Clark, for HealthLeaders Media, November 18, 2013

In its legal advisory, however, AHA said the opinion expressed by CMS it a Nov. 4 Q&A "appears to have no legal force or effect on hospitals [or insurers] and to be unenforceable.

"If HHS wanted to try to make this position enforceable, it would have to go through rulemaking. But even then, HHS's authority to adopt the views expressed in the Q&A is highly questionable. By statute, everyone (except incarcerated individuals and undocumented immigrants) is eligible to purchase any QHP [Qualified Health Plan] offered through an exchange so long as the premium is paid."

The AHA's legal advisory added that the federal government's own regulations implementing the federal premium tax credit "clearly allow for another person or organization to pay the insurance premium for the enrolling individual."

The advisory was issued by the AHA's deputy general counsel Maureen Mudron and senior vice president/general counsel Mindy Hatton.

CMS's Q&A surprised many hospital officials because HHS Secretary Kathleen Sebelius had clearly stated in a letter to Rep. Jim McDermott, (D-WA) that qualified health plans are not federal healthcare programs, and thus are not subject to anti-kickback statutes. There had been concerns that a hospital that attempted to purchase a health exchange premium for a patient might be perceived to—directly or indirectly—influence that patient's choice for where they would get care.

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3 comments on "AHA: Hospitals Can Pay Patients' HIX Premiums"


Stuart Showalter (11/25/2013 at 11:08 AM)
The AHA advisory is basically their advocacy position. It remains an open question whether subsidizing an insured's premium would be a violation of the kickback laws (state or federal) or some other anti-fraud statute. Regardless of the opinion of AHA, HHS or the DOJ, it would ultimately be for the courts to decide. Using a charitable foundation may be an option, but I urge careful legal analysis on a case-by-case basis.

Martha Carlton (11/19/2013 at 3:07 PM)
How is this different from healthcare systems offering HMO policies through HIX for $1 per month? As long as the patients can choose where they access it seems like a in- win.

Manuel H. Moraleda (11/19/2013 at 11:26 AM)
Ultimately this money that the hospital is using comes from insured patients. Would the federal government provide a bailout later in the event that the insurance company is placed at financial risk and would consider bankruptcy ?