How Insurance Exchanges Will Affect Doctors' Income

Leigh Page


July 10, 2013

In This Article

Complex Patients, Compliance Issues, Collection Woes

There is also a possibility that exchange enrollees will be difficult to manage because they are not used to going to physician practices for care. A study by the Kaiser Family Foundation predicted that these patients are going to need more healthcare services.[12] According to the study, 37% of low-wage workers will not have had a checkup in 2 years and 13% will be in fair or poor physical health, and their medical expenditures will rise by as much as 60%.

"When patients have been using the emergency department for years, that's a pattern isn't going to change on January 1," Owen Dahl says. Catherine Annulli, a Senior Health Consultant at VantagePoint HealthCare Advisors in Hamden, Connecticut, is concerned that low-income patients will behave like some Medicaid patients -- not showing up for appointments and not taking their medications. Because many of them have not sought care in physician practices, "a practice may have to spend some time educating them," she says.

Matthew Katz, of the Connecticut Medical Society, has a different take. "A number of those who are in the exchange could have had insurance before, so they may have the good habits," he says. "Just because someone was on Medicaid and has not had insurance recently doesn't mean they will be noncompliant."

However, both Annulli and Katz agree that there may be difficulties collecting out-of-pocket charges from exchange enrollees. "This population is not used to paying copays and deductibles," Annulli says. Not only do they have a low income, but they are also expected to have relatively high deductibles and copays.

"This is a significant concern," Katz adds. "You'll have large deductibles that you have to bill patients for."

But a closer look at how cost-shares will be calculated suggests that this may not be as big a problem as it seems. Each exchange plan will have 4 coverage levels for all enrollees to choose from. The levels, named after metals, range from "platinum," which requires the highest premium but the lowest cost-share, to "bronze," which requires the lowest premium but the highest cost-share.

In the California exchange, one of the first to have published cost-share information, an enrollee in the benchmark silver plan with a $45,000 income would have a $2500 deductible, as well as copays of $45-$65 for an office visit.[13] These are substantial charges, but they fall precipitously for lower income enrollees. In the same silver plan, enrollees earning less than $17,000 a year would have no deductible at all and a $3 copay for most services.

There is another potential payment problem for physicians with exchange patients. Under final federal rules for the exchanges, patients who stop paying their premiums still get a 90-day grace period, during which they are entitled to continue to receive healthcare services.[14] The rule stipulates that the insurer must continue paying their bills for 30 days, but for the next 60 days, providers are obligated to provide care without insurance payments.

The rule states that the exchange plan "must notify providers of the possibility for denied claims when an enrollee is in the second and third months of the grace period." Following up on this provision, the California exchange stipulates that in these cases, the plan must notify the patient's primary care physician and any other physician submitting a claim for that patient in the past 2 months.[15] To avoid this problem, Gillespie advises that practices should check a patient's coverage status at each visit by asking the insurer, "Is the patient current on her payments?"

To Join or Not to Join -- That Is the Question

Viewing all these potential problems, should physicians sign up for exchange plans or make sure to stay out of them?

Katz does advise physicians to weigh the risks. "I think that they should consider whether a new plan or product offered by a health insurer is right for them and their practice -- and their patients," he says. "They should be looking not only at the rates being offered, but the plan design and structure, the administrative requirements, and the current practice and patient load."

But Dahl, the management consultant, predicts that most practices will try to stay out of the exchanges in the first year. Based on his talks with physicians, he says, "Everybody seems to agree on this first go-round, we want to be very cautious. Let's go slow and see what happens."


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