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The 90-Day Grace Period: What Providers Need to Know

August 2014, Vol 4, No 5
Sydney Abbott, JD
Policy Coordinator, Association of Community Cancer Centers

Implementation of the Patient Protection and Affordable Care Act (ACA) brings many changes to the healthcare system, including the establishment of health insurance exchanges and new requirements for in­surance coverage.

Health insurance marketplaces move toward the goal of universal coverage by providing an option for patients to purchase health insurance outside of an employer-sponsored program. However, because all plans offered through an exchange must meet minimum health benefits and other insurance reform requirements, such as coverage for young adults and removing the cap on annual benefits, individual plan premiums are often more expensive than patients expect. This could lead—and in some cases, already has led—to missed premium payments.

Of particular concern to providers is the time in which services are deemed covered in the event of lapsed premium payments. The ACA provision extends, to 90 days, the grace period patients have to become current on any past payments before their insurance coverage is terminated.

Current laws on late and premium payments vary by state, but the ACA replaces all existing state laws with the 90-day rule. The rule applies to all consumers, in all states, who purchase subsidized coverage through the ACA health insurance marketplace. After the first premium payment is made, patients have 90 days to pay the next premium. If the patient does not pay for 2 months, the insurer can hold all claims. At the end of the third month, if the patient still has not paid, the insurer may terminate the patient’s policy. The rule requires insurers to reimburse providers during the first 30 days of the 90-day grace period. However, if a consumer still fails to make a payment after 90 days and his or her coverage is dropped, insurers will not be required to pay for claims incurred during the last 60 days of the grace period. If coverage is dropped for nonpayment, physicians must work directly with patients to collect payments for the balance incurred during days 31 to 90 of the grace period.

The grace period issue only applies to individuals who receive tax subsidies to purchase insurance through the health insurance marketplace. It is important to know that information on whether patients receive subsidies will not be noted on their insurance cards. Claims during unpaid days 31 through 90 may be pended. If the enrollee never pays his or her share, the claim is not payable by the insurer.

The Oversight and Investigations Subcommittee of the House Energy & Commerce Com­mittee recently held a hearing to ask insurers about health insurance marketplace enrollment and premium payment by enrollees. Repre­sentative Michael Burgess of Texas and other subcommittee members expressed concern over the 90-day grace period and the chilling effect it may have on provider participation in exchange plans. Insurance company executives testifying at the hearing assured the subcommittee that adequate systems are in place to give physicians the ability to determine patient payment and eligibility status. Industry representatives said call centers—and in some instances, online applications—are available for premium payment verification. However, premium status policies vary by company and leave a complex process for providers and staff to determine a patient’s status. By the conclusion of the hearing, the Oversight and Investigations Subcommittee re­mained concerned that this information is not readily available to the healthcare providers, who could be left holding the bag for care that is not reimbursable.

The Association of Community Cancer Centers (ACCC) reiterates the concerns expressed by the House Energy & Commerce Committee members and urges Congress and the administration to work together to require more easily accessible and real-time patient status data to be available to providers. ACCC has submitted a letter to the ad­­min­istration about this issue and continues to work with members of Congress. We will keep members posted on any developments on the 90-day grace period.

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