States may offer solution to ACA grace period problem

Washington state has passed the first law to require insurers to quickly notify physicians when patients enrolled in exchanges under the Patient Protection and Affordable Care Act (ACA) stop paying their premiums, and other states may follow its lead.

With the federal government’s record for passing bills that are actually signed into law an all time low, the American Medical Association (AMA) has worked at both the state and national level to find remedies to a problem they see with the new ACA exchange plans’ required grace period for people who stop paying for their insurance plans.

Under ACA exchange plan regulations, when someone misses his or her premium payment, the plan is not cancelled right away. Instead it enters a 90-day grace period where the person remains covered as long as he or she begins paying the premiums again before the 90 days are up. If the person does not begin paying again, the plan is cancelled and any healthcare services the person received in the last 60 days of the grace period are his or her financial responsibility.

The problem, the AMA says, is that insurers don’t have to tell physicians that a patient has stopped paying his or her premiums and entered the grace period until well into the last 60 days of the grace period. Particularly in the case of cancer patients, this may leave the physician’s practice at substantial risk. The practice may spend thousands of dollars on drugs and treatments the patient needs in anticipation of reimbursement from an insurer only to find out that it has to try and collect that money directly from the patient instead.

Washington State Senate Bill 6016 requires all insurers offering ACA exchange plans in the state to provide information in “real-time” about a plan beneficiary’s enrollment status to physicians. In addition, it requires health plans in the exchange to tell healthcare providers within three days when a particular plan member seen by a provider has missed a premium payment and entered the grace period.

Physicians may not deny treatment to a patient who has entered the grace period, but they will be prepared for the posibility that the treatment or service will not be covered by the insurer and can take steps to help ensure the patient will pay them back if the plan is cancelled.

According to the AMA, the Washington law was based on model legislation the AMA wrote and worked with lawmakers to have introduced. A similar bill also based on the AMA model legislation is currently under consideration by the Connecticut legislature.

It should be noted that the ACA rules for exchange plans do not prohibit insurers from telling providers that a plan beneficiary has entered the grace period as soon as that change in status happens. However, it does not require such early notification or create any incentive to do so.

Enough state laws requiring prompt notification could change that equation by making prompt notification standard for insurers that operate in many states similar to how automakers adopted California automobile emission standards nationwide rather than make different cars for sale in different states.