Doctors Get Stuck with Bills for Deadbeat Obamacare Patients

Last year I
wrote that Obamacare could leave doctors holding the bag for
claims for patients who don’t pay their insurance premiums. That’s
because the law includes a three-month grace period during which
health insurers must continue to cover patients who sign up, but
don’t pay the price of their insurance. If the patients eventually
make good, there’s no problem. But if patients don’t pay the owed
premiums, the insurance company has to cover the cost of claims
filed during the first month. Providers are stuck with the tab for
any claims filed during months two and three.

The piece I wrote last July was theoretical. The notification
letter I’m holding in my hand, addressed to my wife’s pediatric
practice, is reality. And reality costs, in this case, over $600.
That’s the outstanding balance owed the practice by a patient
insured by BlueCross BlueShield of Arizona. It’s a balance that my
wife might have to eat, or else try to collect herself.

Here’s the letter, from which my wife redacted all identifying
information before showing it to me.

Dear Practitioner:

Under the Patient Protection and Affordable Care Act (PPACA), if
an individual purchases health insurance through the Individual
Marketplace and receives a subsidy to assist with premiums, there
is a three month grace period in which the individual can make
premium payments. During this period, insurance companies may not
disenroll members, issuers must notify providers as soon as
practicable when an enrollee enters the grace period and, during
the second and third months of the grace period, they are required
to notify providers that claims incurred in the second and third
months may deny if the premium is not paid.

The member referenced above purchased health insurance through
the Marketplace and currently receives a subsidy to assist with
premiums. This letter is a courtesy notification to make you aware
that this member and any covered dependents are currently in the
3rd month of their grace period.

What this means to you

• This claim was incurred during the second or third month of the
  member’s grace period and was pended. All individual claims under
  this contract are also in the second or third month of their grace
  period.
• Any additional claims incurred during the second and third
  month of the grace period may be pended until the full premium due
  is paid by the member.
• If the premium is paid in full by the end of the grace period,
  and pended claims will be processed in accordance with the terms of
  the contract.
• If premium is not paid in full by the end of the grace period,
  any claims incurred in the second and third months may be denied.
  If claims incurred in the second and third month are denied due to
  non-payment of premium, you may seek reimbursement directly from
  the member.

The American Medical Association (AMA) has more information
about the grace period
here, though the letter above covers the high points. Given the
potentially high costs providers can face when the insurance
coverage they process for patient care turns out to be more of a
conditional suggestion than a firm guarantee, the AMA also offers

physicians guidance, and urges them to
enter into financial agreements with patients who receive
subsidized care. The idea is to get them to promise to pay their
own bills if they stiff the insurance company.

Of course, those patients promised to pay their insurance
companies, too.