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Health insurance exchanges: Five challenges

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Health insurance exchanges, dubbed the Health Insurance Marketplace, open for business on Oct. 1, 2013, as the open enrollment period begins for coverage beginning Jan. 1, 2014.

Only 17 states and the District of Columbia will run their own exchanges. The federal government will operate exchanges in 26 states and partner with the remaining seven states.

stethoscope with insurance paper

Come January, physicians who are contracted with health insurers offering plans on an exchange will begin to see new patients. An estimated 30 million people are eligible to buy health insurance coverage through the exchanges. Many of these people were previously uninsured. Most will have a portion of their premiums subsidized by the federal government.

In addition, many states are expanding Medicaid eligibility, which will add to the rolls of the insured. Experts speculate that many of the newly insured will have pent-up demand for healthcare services that they previously could not afford.

If you are participating in an exchange plan either through an existing contract, an amended contract or a new one:

  • Ensure you have the staffing to accommodate many new patients. To keep premium costs low, many plans to be offered on the exchanges have narrowed their networks, which, in turn, will increase the volume of patients to be seen by in-network providers. Some practices may have to extend office hours or hire additional medical personnel, including physician assistants or nurse practitioners, as well as administrative staff. You may be able to limit the number of new patients insured through the exchange and close your panel if needed. Check your contract to ensure that you understand your legal obligations in this regard.
  • Train administrative staff, particularly the front desk staff collecting fees, about new products offered. The Affordable Care Act defines platinum, gold, silver and bronze categories for qualified health plans (QHPs). Each offers the same benefits at a different level of cost-sharing. Under platinum plans, insurance covers 90 percent of the cost; under bronze, only 60 percent.
  • Prepare your practice for a higher risk of patients defaulting on payments. Many of the new patients will have high deductibles – as much as $6,400 for an individual and $12,800 for a family – before insurance kicks in. Review your provider contract to ensure your ability to seek prepayment.
  • Know that you may not get paid for some services rendered if enrollees in QHPs fail to pay their premiums. Enrollees will have a three-month grace period to pay their premiums before their insurance is canceled. However, the health plan can stop paying claims after 30 days if premiums go unpaid. If the enrollee is canceled for nonpayment, the insurance company is not obligated to pay the physician for services rendered during the last two months of the grace period. The physician will be responsible for collecting from the patient. Insurers should notify affected providers as soon as practicable when an enrollee enters the grace period. In California, the state’s health benefit exchange has included a requirement that plans notify providers at least 15 days prior to a patient’s claims being pended. An individual who loses coverage can enroll in another plan.
  • Be aware that patient “churning” could affect your bottom line. Churning occurs when patients’ income levels change, affecting their eligibility for public programs like Medicaid and forcing them to enroll in a different plan. Aside from the loss of continuity of care for the patient, physicians – particularly those serving low-income populations – may see their patient volume fluctuate as enrollees cycle in and out between plans and networks.

The American Medical Association believes the “issue of patient churn between public programs and private health plans is one of the most challenging issues physicians and patients will face once exchanges become operational and state Medicaid expansions are implemented.”

The open enrollment period for the new health insurance exchanges will run through March 31, 2014. For 2015 and subsequent years, open enrollment will be restricted to Oct. 1 through Dec. 7 for coverage beginning the following year.

To be covered beginning Jan. 1, 2014, qualified individuals must enroll before Dec. 15, 2013. Insurance for those who enroll between Dec. 16 and March 31 will become effective either the following month or the second month after enrollment, based on when the application is submitted.

Those qualified can also enroll or change from one qualified health plan to another during a special enrollment period – specifically, up to 60 days from a so-called “triggering event.” Such an event could be a marriage, the birth of a child or loss of essential health benefits, among other things.

In light of these changes, it is strongly advised that your practice adopt a financial policy. Under this policy, you should review your billing guidelines and clearly enumerate patient responsibilities, specifically for copayments and deductibles. Require all new and existing patients to sign the policy, which will become part of their medical records. The signed document is an important tool if the practice has to seek legal recourse for payment of medical services.