The Affordable Health Care Act Explained: Part 2c – Prohibition on Rescissions

We previously discussed essential benefits, but the next section (2712) in the Affordable Health Care Act prohibits rescissions.  What are these and what does this mean for Medical Billing staff?

Simply put, insurance companies may no longer rescind coverage of an individual because of an error on an application.  In the past, if someone made a mistake or forgot any little detail of their medical history, the Insurance provider could retroactively rescind coverage even if the covered procedure had nothing to do with the item missed.  Now, under this Act, the only time a provider may rescind coverage is for intentional fraud.

For instance, if you are asked are you a smoker and you are, but state you are not, then get lung cancer, the provider may rescind coverage.

However, if you forget to mention that you had asthma when you were a young child and later develop kidney disease, the error does not affect the covered problem and yours was likely an honest mistake.  Coverage may not be rescinded.

Knowing this aspect of the Affordable Health Care Act can be very useful to Medical Billing professionals for rather than having to involve the client and his patient, when a provider presents such a scenario, the professional in most cases can argue in behalf of the patient.  This will generally save time and aggravation for all…except perhaps the Insurance Company.

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