Providers Beware: Exchange Products May Mean Increased Risk for Your Business

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State health insurance exchanges are virtual marketplaces that were created by the Patient Protection and Affordable Care Act ("PPACA") to allow private insurance companies to sell qualified health plans ("QHP") meeting certain federal standards. The exchanges launched on October 1st and are expected to have 7 million participants in the year 2014. This means changes are afoot for providers, many of whom may be surprised by possible risks associated with exchange products.
One such risk stems from a provision in PPACA requiring a QHP issuer to give enrollees receiving subsidized coverage a 3-month grace period before terminating coverage for non-payment of premiums.1 This requirement begs the question: Who assumes the risk of covering services provided to these individuals during the grace period?
Under the final rule establishing exchanges and exchange plans, HHS directs QHP issuers to pay all appropriate claims for services provided during the first month of the grace period and permits them to pend claims for services rendered to the enrollee in the second and third months of the grace period.2 If the enrollee settles all outstanding premium payments by the end of the grace period, then the pended claims would be paid as appropriate.3 Otherwise, the claims for the second and third months could be denied.4
Accordingly, there is some risk that providers will be left holding the bag for services provided during the second and third months of the grace period. While the rule at least requires QHP issuers to notify providers of the possibility for denied claims in these circumstances, there are no requirements as to the timing and content of these notices.
Coverage under QHPs starts as soon as January 1, 2014. Before that time, providers are encouraged to gain awareness about whether they will be required to see QHP enrollees and, if so, the impact that it will have on their business. This includes thoroughly reviewing the terms of your provider agreements, paying special attention to any recent amendments to those agreements or the insurer's policies or manuals referenced therein.
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1 PPACA §1412(c)(2)(B)(iv)(II).

2 45 C.F.R. 156.270(d).

3 77 F.R. 18427.

4 Id.