By Ashley Collins, Phia Group
You may be aware of recent growing efforts by providers and vendors to leverage prompt pay laws as they seek to obtain additional funds from you and benefit plans across the nation. In particular, we are aware of providers in Texas working hand-in-hand with aggressive local law firms to take advantage of the state’s prompt pay laws. One Texas law firm recently boasted that it is pursuing potential damages exceeding $865,000,000 and is now promising to pay a 20% referral fee to parties that refer providers to the firm. (FOR A COPY OF ATTORNEY SOLICITATION LETTER WRITE RISKMANAGER@RISKMANAGERS.US)
While these laws may indeed impact you and your process, we at The Phia Group have analyzed the matter in great detail. We urge you to contact us, so that we may discuss your options further. In the meantime, here is a summary of our recent findings: [click here to read more]
Texas Prompt Pay Legislation
S.B. 418 amended Article 3.70-3C of the Texas Insurance Code to require insurers to make payment determinations within 45 days of receiving clean claims from providers in a non-electronic format, or within 30 days of receiving clean claims submitted electronically. Depending on the insurer’s determination, there are three potential courses of action:
(1) if the entire claim is payable, pay the total amount of the claim; (2) if a portion of the claim is payable, pay the portion of the claim that is not in dispute and notify the provider in writing why the remaining portion will not be paid; or (3) if the claim is not payable, notify the provider in writing why the claim will not be paid.
As you can see, a key to protecting yourself from these laws and those that seek to take advantage of it, is simply notifying providers within the allocated time frame of factors prohibiting prompt payment of a claim. If a claim is incomplete, or additional information is needed from a third party, simply notifying the provider will stop the clock.
Insurers that fail to abide by the prompt pay deadlines could face a penalty of up to 100% of the difference between the provider’s billed rate and its contracted rate. Insurers may also be required to pay the provider’s reasonable attorney’s fees.
How To Fight Back
First, S.B. 418 provides that an insurer may request additional information from a provider in order to make a proper payment determination. However, the request must be in writing and strict deadlines apply to this allowance.
Second, the Texas Department of Insurance (TDI) has taken the position that the Texas prompt pay statutes do not regulate private self-funded ERISA plans.
Third, the TDI has indicated that in order to be considered a “clean” claim, the submitted claim must be legible, accurate, and complete. Thus, a Plan may argue that a claim was not a “clean” claim, and not incur the obligation to pay promptly, in the event that any information is missing from the claim. We would once again suggest, however, that if a claim is not clean, you notify the provider of that fact within the deadline.
For a more detailed explanation of these and other effective defenses that are available for group health plans, even including ERISA-exempt plans and ERISA plans susceptible to regulation by state law (due to the savings clause of ERISA), make sure to contact The Phia Group and join in our effort. If you would like to ensure that your own plan or your clients’ plans are afforded all essential rights, please contact firstname.lastname@example.org and we will be happy to assist you in any way possible.
Disclaimer — The above article constitutes the opinion of The Phia Group, LLC, only and should not be construed or interpreted as constituting a legal opinion or binding legal advice.