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Hospitals, insurers at odds over premium payments

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Leading hospital associations appear to be on a collision course with health insurance providers over payment of insurance premiums.

One of the major concerns insurers have is whether the millions of individuals who buy insurance when the Patient Protection and Affordable Care Act (PPACA) kicks in will be able to send in a premium check promptly every month.

Many of those who will buy coverage through state exchanges and other avenues haven’t had coverage in the past because they couldn’t afford it. Now, PPACA will essentially require these folks to buy insurance or pay a fine. But will they consistently be able to pay?

The Obama administration originally suggested these newly insured should have a three-month grace period prior to having their policies canceled. But under pressure from insurance companies, the cutoff period was sliced to 30 days.

Hospitals don’t like that. So the American Hospital Association, the Federation of American Hospitals and the Association of American Medical Colleges penned a letter to the Centers for Medicare and Medicaid Services arguing for a return to the three-month grace period.

While they began by defending the longer grace period as a compassionate helping hand to “low-income individuals … who may experience temporary difficulty in paying premiums,” they’re also worried about their own pocketbooks.

“CMS’s approach also unfairly burdens providers who treat these patients because they will not get paid by the (insurance company) for covered services and will have to wait to try to obtain direct payment from the patient,” the hospital groups wrote. “The reality is that it will be extremely difficult to collect payment from low-income patients who already are having trouble paying.”

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