Medical Prompt Pay Law

Every now and again, each of us is forced to go to a medical provider for a check-up or maybe a flu shot.  When we go, we present the medical provider with our insurance information and we tender the co-pay.  We visit the doctor or nurse and they administer medicine which helps us feel better.  Have you ever wondered what happens next?

After we leave the medical providers office, the medical provider sends the billing information to the insurance company and asks for payment of the services that they have rendered. You might think that the co-pay covered the expenses associated with the medical provider’s overhead, nurses and doctors’ salaries, and the cost of the flu vaccine itself, but it actually did not.  In fact, it doesn’t even come close.

Next, the insurance company receives the billing statement from the medical provider.  Obviously, the insurance company should pay the medical provider for the reasonable services that were provided but this too often does not occur.  There is no surprise here but insurance companies often delay, deny, and reduce appropriate payments.  Medical providers quickly became fed up with this growing delay, deny, and reduction in payments.  The Texas medical providers lobbied the legislature with their concerns about the insurance companies’ behavior and the Texas Legislature adopted the Texas Prompt Pay Act.

Has the Prompt Pay Act corrected the problem with insurance companies failing to timely pay claims?  No, while many medical providers have billing departments that attempt to secure payment from the insurance companies, there is only so much a billing department can do to force the insurance companies to pay in a timely manner.  Often insurance companies will continue to fail to pay the appropriate amount even after the enactment of the Act, and therefore the continued failure may require an attorney to become involved.  If your medical provider is having difficulty in securing the payments owed by insurance companies, it is recommended that you retain a law firm to scour your books for delayed and denied payments.  The attorney will then prepare a damage model setting forth those claims where the insurance company has failed to pay timely under the Act.  If your attorney and the insurance company continue to dispute the amount owed, the parties will typically attempt resolution through the arbitration process but that will depend largely on the payment agreement between the medical provider and the insurance company.

This process is minimally intrusive and has the obvious benefits to medical providers, including doctors, physician groups, hospitals, pharmacies, and the citizens of Texas.  Should you have any questions, do not hesitate to contact our office at 1-888-CLAIM-68 to schedule a time for one of our attorneys to come to your office and discuss your individual institution’s needs at no cost to you.