With the enrollment date for Health Insurance Exchanges (HIX) less than 75 days away, there is a fair amount of uncertainty about the effect they will have on physicians.
HIXs, a key component of President Obama’s Affordable Care Act, are government-run health plans that will let individuals purchase health insurance at affordable rates.
Exchanges are meant to help citizens comply with the ACA’s insurance mandates by allowing a vast network of insurers to compete in cost-efficient ways for the ability to cover more than 40 million uninsured Americans.
While this may be fantastic for low-income patients, the question is how will physicians be affected by such a drastic shift in health coverage?
Reimbursement Cuts
How HIXs will set payment rates is still uncertain, but some states are already aligning with Medicaid prices, resulting in lower reimbursement rates for doctors.
The few states that have released reimbursement prices are showing drastic reductions in payments. In Connecticut, two private insurers planning to be part of the state’s HIX sent doctors letters proposing reimbursements that were between 30% and 40% below what they currently pay. This isn’t surprising, since exchange insurers are under tremendous pressure to reduce costs.
One way for HIX insurers to lower costs without cutting reimbursements is by setting up something called “narrow networks.” These networks will only involve a fraction of providers in the insurer’s full network.
Using this model, insurance companies can still work in the exchanges but minimize their financial risk. Reimbursements won’t necessarily be cut because health plans can reduce costs by choosing the most affordable physicians.
If you’re a low-cost provider, expect an invitation this Fall, when exchange plans will be sending out letters to doctors asking them to join narrow network exchange plans.
Payment Loophole
Physicians must also be aware of a loophole in the system. As the program stands, if families who obtain subsidized health insurance through an exchange fail to pay their premiums, they have three months to settle prior to their policy being canceled. However, insurers are only responsible for paying claims during the first month of the grace period.
During the other two months, families are asked to pay their own doctor’s bill if they seek additional health care services. But if they fail to pay their bills, physicians are left to cover the cost of treatment.
Eventually, families could face a tax penalty for missing payments, but don’t have to worry about a fine, premium rate increase or repayment order.
Ailing Patients
HIXs are expected to infuse the health care system with millions of uninsured, low-income patients. And studies show that exchange enrollees may prove more difficult to care for due to a lack of preventive care.
In fact, according to a Kaiser study, 37% of low-wage workers have not seen their primary care provider in two years. It’s estimated that this segment of patients could potentially increase medical expenditures by as much as 60%.
It may also be exceedingly difficult to collect out-of-pocket payments from exchange enrollees because they lack familiarity with paying copays and deductibles. Not only do they generally have low incomes, but they are also expected to have relatively high copays.
Any way you slice it, new patients are headed your way. So it’s best to prepare now, so you won’t be caught off guard later.
Implementing new technologies like EHRs and comprehensive practice management solutions can streamline your workflow and help move patients through your practice faster, a quality that will be vital when your patient base increases.
Do you know what you need when setting up a new medical practice?
