"Uh-oh." That's the sound being uttered in doctors' offices and hospitals across the country as medical providers realize they're getting stuck with another bottomless Obamacare bill. While the White House desperately tries to pivot from the havoc wrought by the "Affordable Care Act," its hidden regulatory bombs keep exploding.
I heard about the latest problem this week from an eye doctor friend who received a letter from a Colorado-based insurer informing her that she's essentially on the hook for Obamacare's payment grace period for debtors. The optometrist is bracing for a flood of similar letters from other insurers. Like countless other independent providers, she's extremely concerned about the potential liability, uncertainty and fraud the rule imposes on her business.
Here's the raw deal: The Affordable Care Act created a 90-day grace period before insurers can drop patients who fall behind on premiums. So, delinquents who obtain tax-subsidized health insurance through an Obamacare health insurance exchange have three months to settle up their bills prior to their policy being canceled. As written, the law puts insurers on the hook for the grace period.
But the bureaucrats at the Centers for Medicare and Medicaid Services decided to issue a rule in March making insurers responsible only for paying claims during the first 30 days of the debtors' grace period. Who's on the hook for the other two months? Well, customers are entrusted to foot the bills for additional services. But if they blow off the payments, it's up to physicians and hospitals to collect.
In real-world practice, this means providers will be eating untold costs. Several large hospital associations raised red flags over the issue this summer. In August, the Missouri Hospital Association noted that the regulatory shift "unduly burdens physicians, hospitals and other health care providers" by making them directly collect payments from patients, which "puts them at an unfair and significant risk for providing uncompensated care to patients."
Emillie J DiChristina of Practicefirst Medical Management Solutions spelled out the financial risks for clients on the company's blog: "This leaves providers in a potentially bad place as they have a high potential for accruing bad debt on services provided between 31 and 90 days of the allowed grace period." Can you spell f-r-a-u-d? People could "go on and off" insurance plans, Tampa Bay health care lawyer Bruce Lamb told me, and game the system by bailing on payments and exploiting Obamacare protections against denial of coverage.