|Links To State Insurance Departments
The new prompt-pay laws should reassure doctors frustrated by a pattern of late payments. Unfortunately, there are no guarantees when dealing with insurers - other than the concept that insurers are guaranteed to drag their feet.
Indeed, despite the existence of such laws in 40 states, surveys document widespread discontent among physicians. According to the AMA, 38 percent of the physician practices surveyed said that it takes more than 45 days on average to be paid for a clean claim. In the worst cases, physicians report average payment delays of nearly one year.
The managed care industry dismisses these findings, saying that the vast majority of clean claims are paid promptly. And to the extent there are delays, industry officials say, there are sometimes good reasons for them. Insurers claim that the sheer numbers and the tremendous time it takes to review for fraud, the ambiguity over what constitutes a clean claim, and the bumpy transition to electronic filing are reason enough to ignore the state statutes. Managed care believes regulators and providers should consider the huge volume of claims being processes (a plan serving 1.6 million members probably process 1 million claims per month).
Never mind the fact that processing of claims is their work product. It's what they do. Delays are often intentional plans hold up payments in order to earn additional interest on invested funds.
Whatever the exact causes of the problem, states are under pressure from provider groups and others to add muscle to their prompt-pay laws. Measures range from fines and lawsuits, to tweaking existing laws, to creating dispute-resolution mechanisms.
Legislators have begun to use fines to get HMOs' attention. The fines have begun to speed things up, especially with smaller claims, but there is still a problem. Fines may not be enough of a deterrent to command the HMO to pay promptly. Some of the larger HMOs actually think of these fines as part of their cost of doing business. A fine of $150,000 or so for prompt-pay violations may mean a lot to a single HMO, however it is a small consideration to the billion-dollar industry.
Still, plans that continue to pay slowly despite the fines, suits, and face-to-face attempts to work things out can expect scrutiny and fines in the future. Follows is a list of State Web Sites to check your state laws.
District of Columbia: http://disr.dc.gov
New Hampshire: http://www.state.nh.us/insurance
New Jersey: http://www.state.nj.us/dobi/insmnu.shtml
New York: http://www.ins.state.ny.us
North Carolina: http://www.ncdoi.com
North Dakota: http://www.state.nd.us/ndins
South Carolina: http://www.state.sc.us/doi
South Dakota: http://www.state.sd.us/insurance
West Virginia: http://www.state.wv.us/insurance