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The beginning of a new year, January 1st, often marks changes in insurance policies for the client and may result in changes for ABA healthcare providers. It’s essential to understand what changes may occur and how to address them in order to proactively prepare your clients and your practice. This article will review common changes that may occur and how you can prepare to address them. 

Common Policy Changes That Occur January 1st

Policy Renewal:

Many insurance plans operate on a calendar basis, meaning they run from January 1st to December 31st. On January 1st, existing policies are typically renewed for the upcoming year.

Premium Changes:

Insurance premiums are the amount a patient pays for coverage, typically on a bi-weekly or monthly basis. At the start of the year, an insurance company may adjust premiums. This does not impact the amount you are to collect from a client for services, however, it may impact a client’s budget for services, especially if the premium is raised.

Deductible Reset:

A deductible is the dollar amount an insured individual must pay before the insurer will begin to make benefit payments. For plans with annual deductibles, January 1st often marks the reset of deductibles. This means that any expenses paid toward meeting the deductible in the previous year will reset to zero, and the client will need to start meeting the deductible again.

For example, if your client has a deductible of $4000, this means they must pay $4000 out-of-pocket for medical expenses before their insurance plan provides benefit payments. Regardless of how much they have paid toward the deductible, on January 1st, their deductible will reset to $0.00.

Coinsurance Reset:

Coinsurance is the cost-share percentage an insured individual assumes for a clinical service or supply after their deductible has been met. Coinsurance amounts vary based on network use, complexity of service, and other factors explained in an insured individual’s Summary of Benefits and Coverage. In some cases, there are individual and family coinsurance requirements. Similar to deductibles, coinsurance maximums may reset on January 1st.

For example, if your client’s benefits include a cost-share of 30% for individual coinsurance up to $1000 and family coinsurance up to $6000 this means they will need to pay 30% of services until they have reached their plan’s maximums. January 1st often results in a reset of their contribution to $0.00, regardless of whether they’ve met their coinsurance requirements. This means a family may not be paying coinsurance as of December 31st or the previous year but 30% as of January 1st.

Out-of-Pocket Maximum Reset:

Similar to deductibles and coinsurance, the out-of-pocket maximum, the most a client will have to pay for covered services in a plan year, may reset to zero on January 1st. Once the out-of-pocket maximum is reached, the insurance plan typically covers 100% of covered expenses.

For example, a client may have an out-of-pocket maximum of $10,000. Once this amount is reached their financial obligation for services may reduce to $0.00. However, if at the start of the year their out-of-pocket maximum resets to zero, they will be required to once again pay for services, per their benefits and coverage.

Coverage Changes:

Insurance plans may undergo changes in coverage and benefits at the start of a new year. This means their premium, deductible, coinsurance, and out-of-pocket costs may change as well as the limitation or inclusion of a service, such as telehealth, or diagnostic criteria. 

Open Enrollment Period:

Some insurance plans have open enrollment periods at the beginning of the year, during which policyholders can make changes to their coverage, such as switching plans or adding dependents. This may impact services, especially if an existing client changes insurers. If you’re providing services as an in-network provider and are out-of-network (OON) with the new insurance provider then you will need to take steps in an effort to provide continuity of care. This may include applying to be credentialed with the new insurer, requesting a single-case agreement (SCA), or establishing superbilling as an OON.

Introduction of New Benefits or Services:

Insurance companies may also introduce new benefits, services, or features to their plans at the start of a new year. This could include expanded coverage for certain treatments or additional wellness programs.

How to Prepare for Potential Changes

Stay Informed:

Although insurance companies are typically required to provide policyholders with notice of any significant changes to their coverage or benefits, the client may not share these changes. It is important to communicate ahead of time about potential changes in insurance benefits and request clients share this information with you. 

Another way to gather this information is to contact the insurer to verify insurance coverage before the renewal period. This includes confirming the continuation of coverage for ABA service under the new benefit structure, as well as the details of benefits and coverage (e.g., deductibles, coinsurance, copayments, and out-of-pocket max).

Providers should also monitor updates from insurance providers, government agencies, and relevant industry associations to stay informed about any alterations to coverage, reimbursement rates, billing procedures, and legal requirements.

Communication:

Communication is key to managing client expectations for payment for services. Prior to the beginning of the year, inform clients about the upcoming renewal period and any adjustments that might affect their coverage or out-of-pocket expenses. Update all documents that reflect this information (e.g., contract for services).

Billing and Coding:

Once you have the most up-to-date information, ensure that your billing management system is updated to reflect any changes. 

Evaluate and Adjust Services:

Assess the services you offer and their alignment with changing insurance benefits. Explore opportunities to expand or modify services to meet evolving client needs and insurance coverage.

For example, if an insurer's coverage changes to include the authorization of telehealth services then you may explore if this is an additional service that current and prospective clients may benefit from. Inversely, if an insurer’s coverage will no longer authorize telehealth and this is a service you provide, then evaluate how you will address those who are receiving these services.

Financial Planning:

Update your financial projections and budgets based on the anticipated changes in insurance benefits. Assess the potential impact on revenue, expenses, and profit margins. Develop contingency plans to mitigate any negative effects.

Staff Training:

If you’ve hired staff, ensure they are trained on changes in billing codes or procedures. Provide guidance on how to communicate with clients about changes in insurance benefits and address any potential concerns or questions.

Reference:

This article was created with assistance from ChatGPT 3.5

Written December 3, 2023 - By Charity Steele, MS, BCBA