HIE grace periods: another reason to pre-qualify patients
We’ve talked before about the importance of up-front patient qualification. Today’s blog topic centers on an increasingly common scenario relating to health insurance exchanges (HIEs), particularly complications arising from payment grace periods. It’s a situation that, as Atty. Elizabeth Richards, who is a member of the Board of Directors for the Georgia Chapter of the HFMA, an HFMA Fellow, and an expert on the subject of HIEs, says, hasn’t received much attention as of yet. Yet it’s one that highlights the need to ask the right questions (and get the right answers) during patient check-in.
Okay, here goes. An HIE-enrolled patient comes to you for outpatient treatment. The illness is serious, and the treatment is going to be long term. At each visit, the patient provides you with his insurance card and, for several months, you submit a bill for his care to his insurance company and successfully receive payments.
One day, the patient submits his card as usual, you submit the bill after treatment as you always do, and all seems right with the world—until payment is declined because the patient has missed his last monthly premium. Why were you caught unaware? Why did this not reveal itself during check-in? The short answer is, because there’s a 90-day grace period when a patient misses a premium payment, so it looked to you as if the coverage was current and up-to-date. You had no way of knowing that the coverage had lapsed. The insurance company should have notified you that your patient was in a grace period during this time, as many insurance commissioners across the US are encouraging, yet the practice is not widespread.
Even worse, if you have a critically ill patient at a hospital, chances are that patient will have a lengthy stay. And when does that patient get billed? Usually at the END of their stay! So having that patient’s premium lapse, but within the grace period, can be much more costly than the outpatient scenario mentioned above. Whereas the physician’s practice might get burned on a couple of office visits, the hospital could be looking at losing several days of unpaid coverage for the hospital stay. Both instances can wreak havoc on your A/R.
Here’s where it can get even trickier, as some providers have been finding out. You may come to the conclusion that it will be less costly in the long run to pay your patient’s premium than it will be to write off those charges, which, in many instances, will be the case. Sound thinking. Or is it?
If you do it for one patient will you then legally have to do it for any and all patients in this situation? The answer, thanks to the Sarbanes-Oxley Act of 2002, which protects shareholders and the general public from accounting errors and fraudulent practices in the enterprise, is “yes.” And as you can imagine, this brings up a list of issues far too lengthy to discuss here (stay tuned for future blogs on the subject).
It’s also important to point out that if a patient is within the grace period, the insurance company is only responsible for the first 30 days of treatment. The patient’s premium lapse could be the window between the end of those first 30 days and the date the premium is paid by the provider. For instance, if the provider doesn’t find out about the patient’s unpaid premium until day 50 of the 90-day grace period, and the provider pays it at that point, the provider will not be compensated for those 20 days prior to that (in this case days 31-49).
We are entering into the fourth quarter of the year, predicted to be the worst for when this problem escalates due to conflicting expenses associated with the holidays and other year-end events.
Ultimately, the takeaway from this situation regarding HIE grace periods is the need to qualify patients as thoroughly as possible upon your initial contact with them. The sooner you identify that a patient is in the grace period, the quicker you will be able to address the issue. While sensitive, questions related to this issue and others should be asked during check-in, each and every time. The simple query, “When did you make your last HIE premium payment?” may save you and your patient a lot of headaches down the road.