2. Overview on Status of Exchanges and Employee
sponsored Health Insurance
90 Day Grace Period
Paying Patient Premiums
◦ Overview of the Official Statements on the
Issue
◦ When, Why, and How
The Future of Premium Tax Credits
◦ Halbig and King
3. 25% more choices this year
However, 7.5% premium increase expected
Average Monthly Premium will be $384,
before subsidy is applied
As of February 11th, 7.75 million consumers
selected a plan for 2015 (Deadline is 15th) on
Healthcare.gov
87% are eligible for Premium Subsidies
2.5 million enrollees are under the age of 35
70% selecting the Silver Plan, 19% in Bronze
6. Average total cost per employee in 2014 was
$9,504, of which the average employer cost
was $6,276 and average employee
contribution was $3,228.
Projecting 3.9% increase in 2015
Trends- wellness programs, large employers
direct contracting, spousal surcharges
SHOP exchanges for employers with 50
employees or less opened in 2015
7. No automatic paycheck withdrawal
The individual market is largely made up of
people with tentative work histories. They
may be self-employed or seasonal workers
with surges of income, or they may work
several part-time jobs, or they may even be
fully employed in good paying positions but
their employers don’t provide coverage
12 months of coverage for 9 months of
premium??
8. Only applies to enrollees who receive an
advance premium tax credit to purchase
insurance and who have paid at least one
month’s premium (Close to 87% of exchange
enrollees)
Designed to create a continuity of care
Insurance company only required to pay
claims during the first 30 days after a missed
premium
9. Insurance company may pend claims day 31-
90
◦ Required to notify HHS and the Provider of patient’s
delinquent status
Can cancel plan after 90 days
Patient is considered fully insured until the
91st day, and therefore, can not be balanced
billed
Applicability to prompt payment laws?
9-14% attrition for non-payment in 2014
10. When to do it:
◦ Uninsured Patient with chronic condition or
frequently hospitalizations
◦ Trauma Patient will forthcoming long ICU and
recovery currently inpatient at your facility
This would have to occur during open
enrollment
◦ Patient who was signed up for exchange, but did
not pay premiums and treated at your facility
during the 90 day grace period.
◦ Underinsured
Co-pays on RX to prevent readmissions
11. Decrease Uncompensated Care Cost
Community Health Needs
Reduces Rehospitalization
Leads to Better Patient Outcomes
Gives Patients access to outpatient
services and prescriptions
12. September 16, 2013 CMS Webinar: Question was
poised by Rich Umbdenstock of AHA to Mary
Cohen Senior Adviser to CMS
"One of the questions that several of our members have
asked us before," Umbdenstock said, "and I see it's in here
again, is the question, 'If the patient qualifies in the
exchange, but still doesn't feel as though they have the
money after the subsidy to buy a plan, can the hospital do
that for them?'"
"Can the hospital buy the plan on their behalf?" Cohen
stated, as if she wasn't sure she heard correctly. "You
know, I don't know the answer to that question…It's a
good question. I'd like to say yes. But let me check with
people like lawyers."
"That's a very complicated one, I know," Umbdenstock
replied.
13. Partly answered by Secretary Sebelious on
October 30, 2013 in a Letter to
Representative Jim McDermott
◦ Qualified health plans available on the
health insurance exchanges under the
Affordable Care Act are not “federal health
care programs.” Although Secretary
Sebelius did not connect the dots, if QHPs
are not federal health care programs they
are not subject to the federal anti-
kickback statute
14. The federal anti-kickback statute is a broadly
worded prohibition on inducements, payments
or kickbacks intended to influence the referral
of items or services to be paid for by a federal
health care program. The government has
historically interpreted the kickback statute to
prohibit giving items of value to beneficiaries
of federal health care programs, including, with
some exceptions, paying or subsidizing any
copayment, deductible or premium obligations
the beneficiary may have.
15. November 4, 2013 CMS FAQ Statement
Q: Are third party payors permitted to make premium
payments to health insurance insurers for qualified health
plans on behalf of enrolled individuals?
A: The Department of Health and Human Services (HHs) has
broad authority to regulate the Federal and State
Marketplaces. It has been suggested that hospitals, other
healthcare providers, and other commercial entities may be
considering supporting premium payments and cost-sharing
obligations with respect to qualified health plans purchased
by patients in the Marketplaces. HHS has significant
concerns with this practice because it could skew the
insurance risk pool and create an unlevel field in the
Marketplaces. HHS discourages this practice and encourages
issuers to reject such third party payments. HHS intends to
monitor this practice and to take appropriate action, if
necessary.
16. AHA's deputy general counsel Maureen Mudron and senior vice
president/general counsel Mindy Hatton issued a legal briefing to their
member hospitals stating that the Federal Government has no legal
authority to prohibit Hospital from paying their patient’s insurance
premiums
◦ "If HHS wanted to try to make this position enforceable, it would
have to go through rulemaking. But even then, HHS's authority to
adopt the views expressed in the Q&A is highly questionable. By
statute, everyone (except incarcerated individuals and
undocumented immigrants) is eligible to purchase any QHP
[Qualified Health Plan] offered through an exchange so long as the
premium is paid.“
◦ "The ACA requires tax-exempt hospitals to have a written financial
assistance policy that describes the criteria that will be applied and
the financial assistance that will be provided to help patients afford
health care," the AHA legal advisory said. "Premium subsidies could
be one form of financial assistance.“
◦ We believe that existing IRS precedent strongly supports a
determination that providing this type of subsidy advances the
charitable purpose of hospitals and that any benefit to insurers is
incidental to achieving the larger public good of making health care
available to those with financial need. "Providing subsidy support in
the name of a charitable contribution, the advisory added, "is
especially important for individuals residing in states that have
chosen not to expand their Medicaid programs and could help fill
the gap in making affordable coverage available to meet the needs
in those communities."
17. March 14, 2014 enacted upon publication. No
comment period.
Codifies February 2014 FAQ statement. In
response to LA BCBS action.
CMS clarifies their previous statements and
orders insurers to accept premium payments
from Ryan White HIV/AIDS program
Also states insurers can accept payments from
state and federal programs and Indian tribes
Continues to encourage insurers to reject
payment from hospitals
18. “We remain concerned that third party
payments of premium and cost
sharing provided by hospitals, other
healthcare providers, and other
commercial entities could skew the
insurance risk pool and create an
unlevel competitive field in the
market”
19. “Unfortunately, even after the interim final rule there
remains a level of uncertainty as to whether providers
can subsidize exchange coverage for indigent and near
indigent individuals,” said Chad Mulvany, director of
healthcare finance policy, strategy and development for
HFMA. “While the initial letter Secretary Sebelius sent
Congressman McDermott in November stating that
exchange subsidies are not a federal program, seems to
open to the door to this, subsequent FAQs from CMS
and the IFR could suggest otherwise. Providers are
rightly concerned that this could be reinterpreted in the
future exposing them to fraud liabilities.”
20. Targeting a Very Specific Patient Class
◦ Unintentional Discrimination
◦ Adverse selection
Data Mining
◦ HIPAA issues
You can not require the patient to only visit
your facility
◦ Therefore, be very careful that the plan purchased
includes other provider options.
Non-profit tax consequences
Stark Law
21. Creating a Scholarship Fund to provide
Premium Support
Using a Foundation or Private non-profit
◦ Likely must concentrate on financial need only and
not be health based
◦ United Way has shown interest in a lot of markets
◦ South Florida Hospital Association
Enrollment Desks in ER
Health Information Fairs
Hiring a Third Party Vendor to work with your
patients
22. “Hospitals and drug companies pay patients’
premiums and cost-sharing in order to
increase utilization of treatments and
prescription drugs that benefit them
financially. This practice undermines efforts to
reward high-quality, cost-efficient care and
drives up health costs for consumers,
employers, and tax payers.”
-Robert Zirkelbach, America’s Health
Insurance Plans
23.
24. Issue: Do they apply only to State exchanges
only, or also to Federal exchanges?
◦ All Region 5 states are on Federal Exchanges, so if
subsidies on Federal exchanges are outlawed,
approximately 87% of your exchange patients are
likely uninsured again.
◦ Plain language of the statute states “established by
the State”
Government says you must read in context of entire
law. IRS has interpreted broadly to include all
exchanges.
Opponents say plain reading was to encourage States
to run exchanges. IRS is wrong.
25. Halbig v. Burwell
◦ DC Circuit
◦ Originally ruled the subsidies are not available on
Federal exchanges
◦ Under en banc (full panel) review
King v. Burwell
◦ 4th Circuit
◦ Opposite result subsidies are available on Federal
exchanges
◦ Supreme Court accepted certiorari on this case
◦ Expected to be heard Summer 2015
26. This is purely a textual case
The court must decide between choice
between clear statutory text and notions of
statutory purpose
They will use the Chevron test to do it
27. The Chevron test is used to assess whether agency
action, here the IRS, is within the scope of the
agency’s authorization, here the ACA.
The Chevron test has two prongs:
1) First, has Congress directly spoken to the precise
question at issue? If Congress’ intent is clear, the
court and the agency must give effect to that
unambiguously expressed intent.
2) Second, if the statute is silent or ambiguous, is the
agency's action based on a permissible construction
of the statute?
28. Elizabeth Richards is an attorney with Clinton A.
Harkins, P.C. Her practice specializes in Third Party
Healthcare Reimbursement. She received her BBA in
Finance from the University of Georgia in 2003. She
completed her JD, also from the UGA, in 2006. Mrs.
Richards is also a HFMA Fellow. Mrs. Richards is an
active member of the Georgia Bar, Georgia Academy
of Healthcare Attorneys, and Georgia Chapter of
HFMA where she currently sits on the Board of
Directors.
erichards@cahga.com 770-261-1065
Editor's Notes
Insurer may not want to notify provider of delinquency because they will pay the premiums. Legislation introduced at states and federal level to address this. Strong words from insurance commissioners.
Some believe safer to pay whole year and not only the missed months they are in your facility
