AMA Issues Grace Period Guide to Assist Physicians

New resources offer step-by-step help for minimizing risk

CHICAGO - March 19, 2014 - The American Medical Association (AMA) today announced new resources to guide physicians on navigating a little known rule in the Affordable Care Act (ACA) that could pose a significant financial risk for medical practices. The rule published by Centers for Medicare & Medicaid Services (CMS) provides individuals that purchase subsidized coverage through the state insurance exchanges a 90-day grace period before their coverage is cancelled for non-payment. 

Under the CMS rule, insurers in health exchanges are required to pay any claims incurred during the first 30-days of the grace period, but insurers are not required to pay claims incurred during the last 60-days for any patient whose coverage is terminated. Patients are considered to be covered for care during the entire grace period, but insurers are allowed to place all the claims during the last two-thirds of the period in a pending status and retroactively deny them when coverage is terminated at the end of the grace period.

“The grace period rule imposes a risk for uncompensated care on physicians so the AMA has created resources to help medical practices navigate the key aspects of the rule to minimize its potential negative impact,” said AMA President Ardis Dee Hoven, M.D. “Managing risk is typically a role for insurers, but the grace period rule transfers two-thirds of that risk from the insurers to physicians and health care providers. The AMA is helping physicians take proactive steps to minimize these risks.”

The new AMA resources for physicians include:

These resources are geared to the needs of physicians and will help support their practices by outlining key issues associated with the grace period and provide guidance on administrative policies, financial agreements and communications with patients and insurers. All the new resources and more are available to physicians at: www.ama-assn.org/go/graceperiod

A key issue for physicians is having accurate information from health insurers regarding patients' grace period status. The AMA recently delivered a letter urging CMS to amend the grace period rule to require insurers to notify physicians as soon as a patient falls behind on their premiums, rather than the current notification requirement that provides insurers with discretion as to when and how to notify physicians during the 90-day grace period.  

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Media Contact:
Robert J. Mills
AMA Media & Editorial
(312) 464-5970
robert.mills@ama-assn.org

About the AMA
The American Medical Association is the premier national organization dedicated to empowering the nation’s physicians to continually provide safer, higher quality, and more efficient care to patients and communities. For more than 165 years the AMA has been unwavering in its commitment to using its unique position and knowledge to shape a healthier future for America.

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About the American Medical Association (AMA) Since 1847 the American Medical Association has had one mission: to promote the art and science of medicine and the betterment of public health. Today, the core strategy used to carry out this mission is our concerted effort to help doctors help patients. We do this by uniting physicians nationwide to work on the most important professional and public health issues. In 2011 our strategic plan focuses on five areas that encompass the central elements in health system reform: Access to care Quality of care Cost of health care Prevention and wellness Payment models Vist the AMA's 2011 strategic plan at: http://www.ama-assn.org/ama/pub/about-ama/strategic-issues.page These topics represent the major areas of emphasis in which the AMA carries out its mission in the current environment. Our proposed actions are not only directed at solving reform issues at the policy level, but also at helping physicians adapt to—and adopt—changes in a productive way. To learn more about how the AMA is moving medicine forward, read our flyer at: http://www.ama-assn.org/resources/doc/about-ama/moving-medicine-forward.pdf.