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Life Health > Health Insurance

PPACA World managers prepare to collect bills

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The Centers for Medicare & Medicaid Services (CMS) is getting ready to bill health insurers for hundreds of millions of dollars, or even billions of dollars, in Patient Protection and Affordable Care Act (PPACA) program “payables.”

See also: 3 ways a PPACA lifeboat program form is spamming the CEOs

The bills could force health insurers that have big payables and are short on cash to scramble for money to send to CMS, which is part of the U.S. Department of Health and Human Services (HHS). In theory, it’s possible that a scramble for cash could affect some insurers’ ability to pay claims, or to pay agents’ and brokers’ commissions.

It’s not clear how big the bills will really be. CMS officials say in a slidedeck describing the PPACA payment and collection process that it will process payables and receivables for many different PPACA programs that affect health insurers, including the PPACA advanced premium tax credit (APTC) subsidy program, the PPACA cost-sharing reduction (CSR) subsidy program, the PPACA risk-adjustment program, and the PPACA reinsurance program.

See also: Feds post PPACA lifeboat program numbers

Analysts at Standard &Poor’s Ratings Services reported earlier this week, for example, that they believe the risk-adjustment program alone could lead to $2.3 billion in insurer-to-insurer cash transfers.

The risk-adjustment program is one of the three big PPACA “three R’s” risk-management programs, or lifeboat programs, which are supposed to keep unexpected spikes in claim risk from killing health insurers. The risk-adjustment program is supposed to shift money from PPACA exchange plan issuers with unusually low-risk enrollees to issuers with many high-risk enrollees.

CMS will subtract the reinsurance money and other PPACA program money it owes from the total, and that could cut the amount typical insurers actually have to send to CMS.

CMS expects to send out the initial dunning letters to insurers that seem to owe money by Aug. 15.

Insurers are supposed to pay their CMS PPACA bills by Aug. 30.

Insurers that do not pay their CMS PPACA bills by Aug. 30 are supposed to get a dunning letter with a final request from CMS for payment.

“This letter signals the intent of HHS to refer the issuer’s debt to the Treasury Department after a period of 90 days from the original invoice date,” CMS officials say. After that, Treasury bill collectors could come knocking.


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