AHA: Hospitals Can Pay Patients' HIX Premiums

Cheryl Clark, for HealthLeaders Media , November 18, 2013

In a legal advisory to hospitals, the American Hospital Association asserts that the federal government's own regulations "clearly allow for another person or organization to pay the insurance premium for the enrolling individual."

The federal government has no legal authority to prohibit hospitals from paying their patients' insurance exchange premiums to encourage their enrollment, despite a Nov. 4 Centers for Medicare & Medicaid Services statement implying that it does, according to a sharply worded legal advisory from the American Hospital Association.

What's more, there is clearly no prohibition against hospital-affiliated charitable foundations, or unrelated charities, paying these premiums on behalf of patients, the AHA said Wednesday. The financial assistance may be especially helpful to those would-be enrollees whose federal subsidies aren't enough to make coverage affordable.

The AHA offered hospitals guidance on the issue after CMS issued a vaguely-worded and somewhat threatening Q&A about third-party premium payments. The agency said that if healthcare providers such as hospitals pay premiums for their most expensive patients, "HHS has significant concerns with this practice because it could skew the insurance risk pool and create an un-level field in the marketplaces."

"HHS discourages this practice and encourages issuers to reject such third party payments. HHS intends to monitor this practice and to take appropriate action, if necessary."

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3 comments on "AHA: Hospitals Can Pay Patients' HIX Premiums"

Stuart Showalter (11/25/2013 at 11:08 AM)
The AHA advisory is basically their advocacy position. It remains an open question whether subsidizing an insured's premium would be a violation of the kickback laws (state or federal) or some other anti-fraud statute. Regardless of the opinion of AHA, HHS or the DOJ, it would ultimately be for the courts to decide. Using a charitable foundation may be an option, but I urge careful legal analysis on a case-by-case basis.

Martha Carlton (11/19/2013 at 3:07 PM)
How is this different from healthcare systems offering HMO policies through HIX for $1 per month? As long as the patients can choose where they access it seems like a in- win.

Manuel H. Moraleda (11/19/2013 at 11:26 AM)
Ultimately this money that the hospital is using comes from insured patients. Would the federal government provide a bailout later in the event that the insurance company is placed at financial risk and would consider bankruptcy ?




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