The American Medical Association (AMA) today announced new resources to guide physicians on navigating a little known rule in the Affordable Care Act (ACA) that could pose a significant financial risk for medical practices. The rule published by Centers for Medicare & Medicaid Services (CMS) provides individuals that purchase subsidized coverage through the state insurance exchanges a 90-day grace period before their coverage is cancelled for non-payment.
Under the CMS rule, insurers in health exchanges are required to pay any claims incurred during the first 30-days of the grace period, but insurers are not required to pay claims incurred during the last 60-days for any patient whose coverage is terminated. Patients are considered to be covered for care during the entire grace period, but insurers are allowed to place all the claims during the last two-thirds of the period in a pending status and retroactively deny them when coverage is terminated at the end of the grace period.
“The grace period rule imposes a risk for uncompensated care on physicians so the AMA has created resources to help medical practices navigate the key aspects of the rule to minimize its potential negative impact,” said AMA President Ardis Dee Hoven, M.D. “Managing risk is typically a role for insurers, but the grace period rule transfers two-thirds of that risk from the insurers to physicians and health care providers. The AMA is helping physicians take proactive steps to minimize these risks.”
The new AMA resources for physicians include:
- Step-by-step guide to the ACA grace period
- Grace period collections policy checklist
- Model financial agreement language for patients receiving Advance Premium Tax Credits
- Sample letter: Grace period notice to patients
These resources are geared to the needs of physicians and will help support their practices by outlining key issues associated with the grace period and provide guidance on administrative policies, financial agreements and communications with patients and insurers. All the new resources and more are available to physicians at: www.ama-assn.org/go/graceperiod
A key issue for physicians is having accurate information from health insurers regarding patients' grace period status. The AMA recently delivered a letter urging CMS to amend the grace period rule to require insurers to notify physicians as soon as a patient falls behind on their premiums, rather than the current notification requirement that provides insurers with discretion as to when and how to notify physicians during the 90-day grace period.