Ronald L. Scott
According to the National Conference of State Legislatures Health Policy Tracking Service, 46 states "have put health insurers on notice to pay clean claims in a timely fashion or face possible penalties and fines." Several states tightened or enacted prompt payment statutes in 2001, while other states addressed the issue through increased enforcement of existing laws. Current Texas law requires health insurers to pay clean claims within 45 days of receipt, and imposes administrative penalties of up to $1,000 per day. In 2001, the Texas Legislature passed House Bill 1862, which would have tightened prompt payment requirements.
The Texas Medical Association claims that 60 percent of physicians experience cash-flow problems caused by non-payment or slow-payment of claims. See Eiland, Health Law 2001, Texas Bar Journal (Jan. 2002). More than 10,000 Texas physicians and providers complained about payment delays, prompting the Texas Legislature to respond with House Bill 1862. See id. Some physicians assert that when a physician sends a claim to a health insurer for payment some health care plans simply allege that the claim was not received. Although Texas law requires payment within 45 days of receipt, the statutory limit of 45 days does not begin until the insurer receives the claim, allowing the insurer to delay payment. House Bill 1862 established a standardized "clean claim form" for health care insurers and included provisions for proving receipt of a claim by the insurer. Under the bill, insurers could require any data element on a clean claim that is required in an electronic transaction set needed to comply with federal law. However, the bill prohibited an insurer from requiring a physician to provide information other than information for a data field included on the clean claim form. The bill also prohibited insurers from requiring the use of binding arbitration to settle payment disputes.
Governor Perry vetoed the bill, saying that the elimination of alternative dispute resolution clauses "is likely to send more disputes to the courthouse for resolution further delaying the payments of claims, driving up the cost of health insurance premiums and increasing the number of uninsured in Texas." However, Perry directed the Texas Department of Insurance (TDI) to be more "aggressive" in assisting physicians and health-care providers in claims disputes.
Insurance Commissioner Jose Montemayor appointed a Prompt Payment Ombudsman who reviewed claim payment practices and fined 17 HMOs and insurers $9.25 million for violating Texas' prompt payment laws. Further, the insurers agreed to make restitution to the physicians and providers affected by the violations. See Hall, "Clean claim" improvements in Texas ensure prompt payment available at http://www.insure.com/pro/regulation/cleanclaims901.cfm. TDI has also promulgated new regulations effective Oct. 2, 2001 to help enforce prompt payment. The rules address proof of receipt of claims, limit insurersí ability to contractually extend payment time, define elements of "clean claims," and require that any insurer audit of a claim be conducted within 180 days. Under the regulations, only information from patientsí medical or billing records can be required by insurers as clean claim elements or attachments. Also, if the insurer conducts an audit, it must nonetheless pay 85% of the claim within 45 days, with the balance payable at the end of the 180-day audit period (unless the insurer seeks a refund of the amount paid as a result of the audit). See Montemayor Approves Clean Claim Improvements available at http://www.tdi.state.tx.us/commish/nr09131a.html.
Legislatively, the prompt payment issue is far from dead, since an interim legislative committee is studying the issue for further consideration in the next legislative session.