Under the Affordable Care Act (ACA), consumers who purchase subsidized coverage through health insurance marketplace (receiving premium assistance through federal tax subsidies) are given a 90-day grace period for paying their premiums before insurers are allowed to drop the coverage. Many reports show that though several people signed up for exchange plans, they have not paid premiums to maintain the coverage. Tracking down the patient months after providing a service to collect payment is really difficult. This marks the importance of performing insurance verification for exchange plan patients each time they are seen.
How Does Grace Period Work?
With grace period, the ACA actually allows consumers to keep coverage for 90 days after missing a premium payment. In the first 30 days of the grace period, the insurers must pay for the services provided. During 31-90 days of the grace period, insurers are allowed to cancel the patient’s coverage. The charges are listed pending during this period until a premium payment is made or the plan is cancelled. If the plan is cancelled, physicians will have to bill their patients directly for the services provided and then wait for the payment.
However, it seems unlikely that a patient would be able to pay the bill if he/she is not able to pay the premium. Proper eligibility verification helps practices to avoid this situation. Practices can understand whether the coverage is suspended during such verification process. So, what are the proper verification steps providers should take to avoid unnecessary denials and revenue losses owing to grace periods?
Best Verification Practices to Avoid Loss of Revenue
First of all, providers should be aware of the fact that the grace period issue applies only to enrollees receiving federal tax subsidies and the information regarding whether they are receiving subsidies are not on their ID cards. They can perform the following steps for verifying patient eligibility for coverage at the time of service and avoid revenue loss due to grace period issue.
- Check with patient whether they have signed up for health insurance through an exchange and are eligible for premium subsidies.
- Verify insurance coverage when seeing the patient for the first time, again at the Place of Service (POS) and one more time before claim submission.
- Make copies of the insurance card.
- Check for retroactive insurance coverage after rendering the service if the patient indicates he/she has enrolled, but didn’t get their forms. You should also check for retroactive coverage consistently on all self-pay patients.
- If the response from the payer indicates coverage status as either ‘Active-Pending’ or ‘Inactive-Pending’, check the coverage once more before dropping the claim.
- If the response from the payer indicates coverage date as ‘Premium Paid to Date End’, or a ‘Policy Expiration’ date, note it. There may be issues when the date of service is after the premium paid or policy expiration date. Check with the patient and don’t forget to check coverage again later.
- Make sure that you capture the payer demographic data and store the 271 document (typically sent by insurance companies that would have information regarding a given policy) in case of claim rejection so as to file an appeal, if necessary.
Practices that are struggling to find enough time to perform a thorough verification process can obtain reliable medical billing and coding services from experienced eligibility verification specialists. This will help physicians focus on their core competencies and avoid the hassles of administrative work.