United States: How Health Insurance Marketplaces May Impact Your Practice

Health Insurance Marketplaces created under the Affordable Care Act provide virtual marketplaces where consumers can shop for, compare and buy health plan coverage. They also place a handful of modest – yet significant – new responsibilities on physician practices. This blog explains that it is important to determine which payers are offering products, what new products a Marketplace may offer and its impact on one's revenue cycle at specific points. A Sidebar cautions that Marketplaces can operate differently from one state to another.

Health Insurance Marketplaces created under the Affordable Care Act provide virtual marketplaces where consumers can shop for, compare and buy health plan coverage. They also place a handful of modest – yet significant – new responsibilities on physician practices.

Examining the Changes

The question that many physicians have is how these new plans differ from existing commercial insurance plans and how they may impact practice revenues. Depending on the plan, there may not be much difference. Most plans offered through the Marketplaces provide basic services such as:

  • Ambulatory care and emergency services;
  • Maternity and newborn care;
  • Prescription drugs;
  • Rehabilitation services and mental health;
  • Hospitalization;
  • Pediatric care and more.

Moreover, reimbursement levels vary among payers and plans just as they do now.

Determining Participation in State Marketplaces

The first step to take now is determining the participation status of your practice in your state's Marketplace. Access the Marketplace's website or healthcare.gov to learn which payers are offering products through the Marketplace. Does your practice participate with any of those payers? If so, decide whether you want to continue participating.

Another issue concerns specific products the Marketplace offers. The payers may have created new products specifically for the Marketplace. Ask them whether they are narrowing their provider networks for those products. If they are, find out if your practice is included. Also ask what other types of providers are also part of the network. If you are included, no immediate changes are necessary.

Your practice will receive this information from payers with Marketplace products through contract amendments or notices. You will need to send a written objection within 15 to 45 days if you do not wish to participate in a particular plan. Failure to object is an implied acceptance.

Understanding the Impact on Your Revenue Cycle

The next step is to determine the impact of the Marketplace on your revenue cycle at these points:

  • Registration — when patient demographic and insurance information is obtained;
  • Eligibility and benefit verification — set time prior to a visit;
  • Prior authorization — needed for required services in advance;
  • Time of service collections — copayments and outstanding balances from patients;
  • Charge entry — affects promptness of bill submission;
  • Electronic claim submittal — affects electronic data interchange denial and rejection rates;
  • Account follow-up — measured by number of days in accounts receivable (A/R);
  • Payment posting — when payments received are posted and balances are computed;
  • Denial management — overall denial rate stemming from timely filing limits;
  • Payment variances — review at regular intervals (for example, 30 days);
  • Patient collections — permit patient accounts to be reviewed with physicians; and
  • Management reporting — how promptly reports are provided to physicians.

Once you have basic information about payers participating in the Marketplaces, inquire further about the exact reimbursement rates for the codes billed by the practice, the effective date of the payers' Marketplace plans, size of member enrollment anticipated and details of the plan features. Do not participate in Marketplace plans by default. Even if they look appealing, make only informed choices about participating.

Know the Risks and Rewards

The addition of millions of new insured patients through the Marketplaces has the potential to dramatically increase the number of patients seeking your practice. But it may take months or even years before the impact is known.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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