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ACA grace period could affect dental practices

January 08, 2016

By Jennifer Garvin

Has your practice received calls asking for the return of third-party payments?

The Association wants to remind dentists of the Affordable Care Act's grace period rule, which provides a three-month grace period for consumers who receive tax subsidies to purchase their health insurance through the ACA insurance exchanges and who have paid their first month's full premium.

The grace period would not be applicable to coverage furnished under stand-alone dental plans but could, for example, apply to dental benefits that are embedded in ACA medical coverage.

Insurers are required to pay claims for the first month of the grace period but they are permitted to delay paying claims for services rendered during the second and third months, if the consumer stops making premium payments. This potentially leaves dentists vulnerable for services furnished between days 31 to 90 of the grace period.

In 2014, some 85 percent of the more than 8 million people who signed up for the health exchange plans received financial assistance, according to the U.S. Health and Human Services Office of the Assistant Secretary for Planning and Evaluation. That number is expected to increase in coming years.

"The ADA continues to monitor this situation," said Dr. Ronald Riggins, chair, ADA Council on Dental Benefit Programs. "It is possible that some patients may not pay their plan premiums after the first month, so be sure to call the carriers and verify coverage for the second and third months to be on the safe side."

Insurance companies are required to notify physicians of patients' grace period status. The ADA Practice Institute has developed tips for dentists on how to handle this situation in their practices:

  • Always check and document a patient's benefit eligibility status before he or she comes into the office, especially patients who purchased dental benefits through the ACA Marketplace.
  • Watch for communications regarding the grace period. The ACA requires plans to notify dentists that there's a possibility the claims may be denied when a patient is in the grace period. But regulations do not specify when and how this should be done. The general expectation is that the payer would send a notification to the dentist as soon as practical when an enrollee enters the grace period. It could be through fax, mail, email or through a notification on the website or a standard electronic transaction.
  • Find out how the plan will handle grace period issues. For example, a payer could delay paying claims during the second or third month of the grace period and deny those claims if the patient's coverage is terminated retroactively because the premiums were not paid by the end of the grace period.
  • Be prepared to discuss grace periods with your patients along with alternate financial arrangements.
  • Check for state law protections to guard against the third-party payer seeking refunds, especially if the payer fails to provide accurate information.
  • Ensure a collection policy exists for the practice and is sufficient to address potential grace period issues.
  • Document everything.