The practice of insurance companies, specifically Preferred Provider Organizations (PPO) and Health Maintenance Organizations (HMO), stiffing healthcare providers has been a major problem for doctors, hospitals, and even pharmacists. “Stiffing” actually means colloquially “to tip poorly” but in this case it is to delay payments. It got to a point that many states perceived the need to enact legislation that would penalize HMOs and PPOs that subscribed to this practice.
In Texas, the Texas Prompt Pay Act is designed to discourage insurers from delaying payments for “clean” (defined under the Texas Department of Insurance Rule §21.2803) claims by an eligible party. Prompt pay attorneys would explain that the penalties for delayed payment depend on several factors, and the length of the delay will dictate the amount of the penalty. In other words, the longer the insurer delays payment, the higher the penalty. This is significant leverage for healthcare providers to get paid quickly.
For example, if a “clean” claim is filed by mail, the PPO or HMO is required to make a payment within 45 days. If it is submitted electronically, the payment period is shortened to 30 days. If the insurer fails to make the deadline but pays up 45 days after the deadline, the insurer is considered in violation of the Texas Prompt Pay Act.
Violators may be levied a fine $100,000 or 50% of the difference between billed amount and the applicable contracted rate, whichever is less. When the payment is made 46 to 90 days after the deadline, the penalty is either $200,000 or 100% of the difference between billed amount and the applicable contracted rate, whichever is less. If the insurer still doesn’t pay until 91 days or more, the same penalties for the 46-90 day period will apply plus 18% annual accrued interest counting from the payment deadline until date the claim is actually paid.
If your insurer is delaying payment for your healthcare services, consult with prompt pay attorneys in your area to assess your case. If you meet eligibility requirements, the lawyer you choose will file a complaint on your behalf through the proper channels.read more