"Eye On Managed Care: Your Check is in the Mail"
Slowly but surely, states are beginning to enforce prompt payment laws. Here's the latest.
by Gil Weber, MBA
Adapted with permission from Ophthalmology Management
© Copyright, 2002. All rights reserved.
Getting paid shouldn't be so difficult: After all, 48 states now have some sort of prompt payment law or claims settlement act on their books. (Only Idaho, South Carolina and the District of Columbia don't.) All of them mandate that "clean claims" must be paid within a certain number of days.
Most stipulate that if a claim isn't "clean" -- i.e., data that's necessary to adjudicate the claim is missing -- plans have a specific number of additional days by which they must request such data. Once the physician has submitted the requested data, payers have another "X" days to pay the claim.
Unfortunately, most states have failed to include an unambiguous definition of a "clean claim" in their prompt payment laws, making it easier for payers to delay payment by requesting additional data. This also makes it harder for a practice to know, from one plan to the next, what data elements are required for a claim to be paid promptly, as submitted, the first time. (Plus, some plans play and replay those old, tired excuses: "We're experiencing some technical difficulties while installing a new computer system" and "We have no record of ever receiving the claims.")
Hit 'em Where it Hurts
Regulators have started to act to force compliance. Initially, health plans were fined on the order of $10,000 to $15,000 for violating these laws, but this was a mere annoyance to the payers, easily swept under the carpet as a cost of doing business.
Last year, however, Departments of Insurance (DOI) started taking much more aggressive action. In Maryland, Aetna was fined $850,000. Georgia's Insurance commissioner has slapped several plans with sanctions well into six figures. In Texas, BC/BS was fined $1.5 million; CIGNA, Humana, and United Healthcare were each fined $1.25 million; Aetna was fined $1.15 million; and Methodist Health Care was fined a record $2.5 million.
Fines of that magnitude can't be dismissed as a cost of doing business, and they're not so easily hidden on a plan's annual report. This increased scrutiny may be having an effect: On average, most plans now pay claims a little more quickly than a year or 2 ago.
Getting the Ball Rolling
Many states have only recently taken steps in this direction. Fifteen states enacted or amended their prompt payment laws in 2001. States with new laws include Kansas, New Hampshire, and West Virginia; Alabama and Tennessee have amended existing laws.
As you might expect, once a prompt payment law goes into effect it takes a while before complaints start coming in and the regulators investigate and issue enforcement decisions. Thus, many of you in the "new" or "amended" states may not see any significant action from your state's DOI before 2003.
However, you can help the process by documenting and reporting to your DOI any instances of repeated or egregious payment delay, downcoding or denial. You should also send copies of such reports to your state ophthalmology society, state medical society, and other professional societies such as ASCRS and AAO that can advocate on behalf of the profession.
But remember: Any payer will occasionally make a mess out of paying a claim. What you're looking for -- and what the regulators want to know about -- is a repeating pattern of misbehavior.
What About Your State?
To learn more about your state's prompt payment law and where to report payment problems, visit the National Association of Insurance Commissioners' Web site at www.naic.org/state_web_map.htm.
This site provides links to every state's Department of Insurance.
Gil Weber is an author, lecturer and practice management consultant to the managed care and ophthalmic industries. He has served as Managed Care Director for the American Academy of Ophthalmology.