Change in the Air for Collection Agencies,

Providers Due to Health Care Law

Collection companies and healthcare providers alike are adapting to provisions of the Affordable Care Act that have been implemented this year-and more changes are coming in 2014.

One of the biggest changes this year was the launch of the health insurance exchanges in October. Next year, the individual mandate will kick in, which will require most Americans to have health insurance or face a penalty.  And section 501(r), which sets forth requirements under the Internal Revenue Code for hospitals to maintain tax­ exempt status, continues to evolve.

Roberta.Schultz, director of operations for ProSource Billing and Insurance, which is part of the Array Services Group in Sartell, Minn., said this atmosphere of change is causing collection agencies and providers to take a wait-and-see approach.

“I feel that everyone wants to see what others are doing and assuring they’re not missing anything,” Schultz said.

Chad Lemke, chief operating officer at Array Services, said he agreed with Schultz that many in the industry are taking a wait-and-see approach. He added that most of his company’s health care clients “believe there will be adjustments” as the Affordable Care Act continues to be implemented.

The health care law has already seen several major changes since it was passed in 2010. In 2012, the Supreme Court upheld the law as a whole, but struck down a provision  that would have required states to expand their Medicaid programs. This essentially allowed states to opt-out of the expansion, and as of Oct. 22, 25 states have done so.

Earlier this year, implementation of the employer mandate-which will require businesses with 50 or more full-time workers to provide health insurance to employees-was pushed back from 2014 to 2015. Opponents of the Affordable Care Act have argued that implementation of the individual mandate should also be delayed one year.

Regardless of any potential tweaks to the law, many expect high-deductible insurance plans to continue to increase in popularity as the Affordable Care Act is fully implemented. Chris Becraft, president of Collection Service Bureau Inc. in Phoenix, said people purchasing health insurance for the first time are likely to purchase bronze-level plans through the exchanges. These plans have lower premiums and higher deductibles than other available plans.

“What we will see is a shift from uninsured to underinsured because everyone who will be enrolling for insurance will choose the lowest premiums and the highest deductible plans,” Becraft said. “These folks will not understand what they have gotten into and will not be ready to pay these deductibles and coinsurance when due.”

In August , Kaiser Health News  reported (http://bit.lyll9RK3ND) that providers are already seeing an increase in bad debt due to consumers choosing high-deductible plans.

“It’s going to be a shock to consumers,” Becraft said of the high deductibles.

Dallas S. Bunton Sr., CEO and chairman of North American Credit Services Inc. in Chattanooga, Tenn., said clients have expressed concerns over “balance after insurance” issues due to higher deductibles and co-pays.

“There will be much more money moved into the ‘self-pay’ status,” Bunton said. “Our clients are concerned with what we intend to do to capture appropriate data, and our ,strategy to make effective recoveries as quickly as possible after the date of service.”

Bunton said training and compliance are at the front of his agenda as these changes continue to take effect.

“I want our staff to be understanding and ready,” he said.

PULSE Publication, December 2013, Volume 29 No 12