Here’s what the Advanced Premium Tax Credit grace period is all about

The Affordable Care Act mandates a three-month grace period for individual plans purchased through the Health Insurance Marketplace if the purchasers of those plans:

• Receive a premium subsidy from the government
• Are delinquent in paying their portion of premiums
• Have previously paid at least one month’s premium within the benefit year

Under the Affordable Care Act, health insurance companies are only obligated to pay claims for services rendered during the first month of the grace period. As a result, Blue Cross Blue Shield of Michigan may hold claims during the second and third months.

If this happens, providers will notice this special message, during the second and third months of the grace period, when they check patients’ eligibility on web‑DENIS:

Contract is active but not current. Claims will be held until the member makes the appropriate payment to bring the contract to current status, or until payment is no longer accepted and the coverage is terminated. There is no guarantee of payment for services rendered during this time.

In addition, providers will receive a 277x228 transaction or report once an electronically submitted claim pends in the claims system. This is being implemented specifically to notify providers of Marketplace claims that pend due to delinquency. The claim status category code and claim status code for claims pending due to delinquency are P5:734 (pending – verifying premium payment). If a claim is submitted by paper, the provider will get a notification letter that provides details on the financial risk.

Here’s other important information for providers to know:

• During the grace period, providers can require the impacted members to make the full payment when a covered service is rendered, up to BCBSM’s allowed amount.
• If the member pays the premium in full before the end of the third month of the grace period, the Blues will pay the pending claims to the provider. The provider will then need to refund the member any payments for covered services in excess of the liability communicated on the remittance advice (within 60 days, as per BCBSM policy).

The three-month grace period applies to all claims. However, as permitted under federal agency guidelines, member encounters with the pharmacy for prescriptions will be denied during the second and third months of delinquency. During that time, members will pay out-of-pocket and seek reimbursement from BCBSM after their contract is paid to date.