A recent article published in Modern Healthcare highlights how CMS interpreted a rule within the healthcare reform law that is putting healthcare providers at greater financial risk. To summarize, healthcare providers could incur unreimbursed costs for services delivered to a consumer that has discontinued paying their insurance premium. See below for a detailed description of this scenario.
It appears that the business of delivering healthcare to a community is becoming more financially challenging. When you consider the increasing number of patients looking for care, reimbursement rates declining, no limits on malpractice suits and increasing regulatory burdens, it should be no surprise that in the future we see more healthcare providers filing for bankruptcy, looking for a financial bailout, selling their business, delivering limited services or discontinuing operations.
Here is the scenario that puts healthcare providers at greater financial risk due to CMS’s interpretation of the healthcare reform law. A consumer purchases their healthcare insurance through an exchange. When the consumer stops paying their insurance premium, they are given a 90-day grace period. As the consumer receives medical care during the 90-day grace period, insurance companies are only obligated to pay for the first 30 days of claims. The insurance company is not responsible for paying claims from day 31 to day 90 during the grace period. Therefore, the burden falls on the healthcare providers to collect payment from the consumer for services rendered during this period. The challenge is how will healthcare providers know when a consumer discontinued paying their premium and it is day 31 of the grace period. The healthcare provider will need to rely on the insurance carrier to provide some type of notification. If the insurance carrier does not do an adequate job notifying the healthcare provider or making this information available, they have no financial liability to the healthcare provider for failing to deliver this information. This scenario also creates the prickly situation of whether a healthcare provider delivers or withholds non-emergency care when they do know the consumer is beyond the 30-day mark within the grace period. If services are withheld, there is the possibility the consumer may be able to sue the healthcare provider if they can demonstrate some level of incurred harm.
The federal government appears to take great ease of shifting more of the financial burden on healthcare providers and creating an indirect tax for all of us. Ultimately, we all pay more because healthcare delivery systems are a necessity and we will pay for it through one or all of the following; increased insurance fees, higher taxes, higher copayments or greater federal deficit spending. It is not beyond the realm of possibility that we will all pay a fee for uninsured healthcare consumers similar to the way we pay for uninsured motorists. No matter how you look at it, we will all be sharing this additional financial burden due to the misdeeds of a few. To add insult to injury, the consumer that is exploiting the system can go back to the insurance exchange during the next open enrolment period and do it again without any penalty. I would like to know what happened to personal accountability.
Here is the link to the CMS rule http://www.gpo.gov/fdsys/pkg/FR-2012-03-27/pdf/2012-6125.pdf