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ACA grace period may yield sticky situation

April 07, 2014

Patients who utilize the Affordable Care Act for their dental coverage may receive a tax credit that would allow them a grace period, giving them more time to pay their premiums. However, it may create a precarious situation for dentists.

Under this provision, patients who receive an advance premium tax credit but do not pay the premiums in full enter a 90-day grace period. The federal health care law requires the third-party payer to pay the claims for the first month.

But it's the patient's responsibility to pay the bill for services rendered during the second and third months unless the premiums are paid in full during the 90-day period starting the date of enrollment.

Dentists may find themselves without payment during this time and, if the patient fails to pay, may need to take extra action to rectify the situation. Because the ACA is so new, it's unclear how frequently dentists may have to deal with this issue.

"There remain a number of uncertainties," said Dr. Andrew Vorrasi, chair of the ADA Council on Dental Benefit Programs. "We are unsure how many patients will have the tax credit apply to dental after satisfying their medical premium. We are also not clear on how embedded plans with a pediatric benefit will handle this issue."

The ADA Practice Institute developed a number of tips for dentists on how to handle this situation in their practices:

• Always check and document a patient's benefit eligibility status before they come 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 pend 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.

"For patients who aren't eligible for the tax credit but who purchased a plan through the ACA Marketplace, it's still good practice to obtain information about coverage prior to visiting the dentist," Dr. Vorrasi said.