If an exchange patient fails to pay the premium during the grace period, is the plan required to pay for services?
Maybe. Under the Affordable Care Act, exchange enrollees who receive federal premium subsidies to help pay their premiums are entitled to keep their insurance for three months after they have stopped paying their premiums. Insurance ID cards for exchange enrollees do not indicate whether the enrollee is subsidized, but Covered California recently reported that 90 percent of California exchange patients are receiving subsidies, so the likelihood of encountering a patient receiving subsidies is very high.
In the first month of the grace period, federal law and California regulations require plans to pay for services incurred even if the patient fails to pay the premiums due by day 90 (CCR §1300.65.2(b)(1)(A)). But in months two and three of the grace period, plans can “suspend” coverage and pend or deny claims if the patient doesn’t true up on his or her premiums by day 90.
However, in 2014, the California Medical Association (CMA) was successful in advocating that plans be required to clearly communicate through their real time eligibility and verification systems if an enrollee’s coverage is suspended during the second and third months of the grace period. Further, the regulation requires plans to reflect “suspended” coverage on day one of the second month of the grace period, and requires plans to use one of three eligibility status indicators to reflect suspended coverage – “coverage pending,” “coverage suspended” or “inactive pending investigation” (CCR §1300.65.2(b)(C)).
If a plan fails to reflect suspended coverage using one of the above indicators on day one of the second month of the grace period, and a physician provides services to a subsidized enrollee, the plan is financially responsible for the claims incurred (CCR §1300.65.2(d)(5)). However, you need to be able to prove that the plan did not comply with the regulation.
For this reason, it is extremely important that practices verify eligibility on all exchange patients, ideally on the date of service, or as near the time of service as possible, and that the practices retain a printout of the eligibility verification and includes it as part of the patient’s chart. If a patient's eligibility verification comes back indicating his or her coverage is suspended, the practice can treat the situation as it would any other patient who has had a lapse in coverage. For non-emergency services, patients may be given the option to either pay cash at the time of service or reschedule to a later date.
If a plan requests a refund for services provided during the first month of the grace period, practices should dispute the request in writing, citing California Code of Regulations section 1300.65.2 (b)(1)(A), which requires plans to pay for services incurred in the first month of the grace period. Practices should also contact CMA so that we can identify any systemic issues with the payor.
If a plan requests a refund on a patient who was in the second or third month of the grace period, but the eligibility verification did not reflect suspended coverage, the plan is not entitled to the refund. The practice should submit a written dispute to the plan citing California Code of Regulations section 1300.65.2(d)(5). Again, please contact CMA if this happens, so we can identify any systemic issues.
For more information, visit CMA’s exchage resource center. In the resource center, you can download CMA's Surviving Covered California tip sheets as well as a number of other CMA exchange resources. CMA members and their staff also have FREE access to our reimbursement helpline at (888) 401-5911 or economicservices@cmadocs.org.