Insurers must pay on time -- or pay the consequences

AMA Leader Commentary. By D. Ted Lewers, MD. Feb. 5, 2001.

AMA LEADER COMMENTARY

A few words about current events in medical practice

SEE ARCHIVES

A message to all physicians from D. Ted Lewers, MD, chair of the AMA Board of Trustees.

Do you feel as if your patients' insurance companies stall as long as they can in paying what they owe you? You're not alone, and now a number of state and local medical societies have data to prove it -- and plans to change the way insurers do business with you.

Delayed, deferred and defaulted payments are, of course, hardly news to us. "The check is in the mail" has been the unofficial motto of a number of insurers for years. What is relatively new is that physicians, through state and county medical societies, and with help from your AMA, have been fighting back. Effectively.

Take a recent headline case in Oregon. After customizing and circulating a template survey developed by the AMA, the Oregon Medical Assn. has evidence to prove what its physicians have long known: Many insurance carriers are not obeying Oregon's payment regulations.

Current Oregon regulations require insurers to accept or deny claims within 30 days. However, the state does not penalize insurers when they fail to comply. Not surprisingly, the OMA's survey shows that Oregon physicians wait an average of 40.5 days before receiving payment on claims -- and many wait even longer. The study also indicates that these delays appear to be an industrywide phenomenon -- not just the problem of a few companies.

Survey participants also reported another disturbing problem: so-called "lost" claims. Nearly nine of 10 practices reported that they had submitted claims only to have insurance carriers maintain that the claims had never arrived or had been lost. The physicians were thus compelled to resubmit claims and wait several additional weeks for payment.

If the word "deadbeat" comes to mind, it should. The problem is what to do about them.

In Oregon, only the very worst offenders -- those whom the state's insurance division has deemed to have "persistent problems" with late payment -- have been fined. For the most part, physicians and clinics have no regulatory recourse against carriers in those instances when they fail to comply with the state's regulations.

But the OMA believes that will change. Thanks to data amassed through its survey -- and the flurry of media attention that the survey drew, both locally and nationally -- the association is giving voice to the concerns of Oregon's physicians. Indeed, the OMA has already met with state insurance industry regulators to lay the survey facts on the table, and it plans to seek legislative relief -- and quickly.

OMA has also called for a meeting with Oregon insurers to learn how they intend to address the problem. OMA will enter any such discussions with potent evidence that change is necessary -- and even inevitable.

Although the OMA experience is dramatic, it is not an isolated case. Since the AMA made prompt payment a high-priority issue a little over two years ago, our Private Sector Advocacy group has worked tirelessly with more than 65 other state, county and city societies to address the issue of late payments -- and the number is growing. We have also assisted more than 30 societies, in addition to Oregon, in developing 45 surveys about physician payment, as well as in conducting data analysis and creating report structures.

And we have seen results. Over the past two years, state and county medical societies have used survey data to advocate for new or strengthened prompt-payment laws. During this time, close to two dozen states have seen the introduction of new or revised prompt-payment legislation -- and we're confident we will see even more. Right now, we are working closely with a dozen state medical societies to develop surveys and promote prompt-payment legislation and regulations -- as well as to ensure that those who fail to comply pay the price, whether through interest payments to physicians or fines to the state. We will continue our efforts until the term "prompt payment" is no longer a medical misnomer.

At its heart, the prompt-payment issue is one of fairness. Credit card holders have to pay on time or pay the consequences. So do people who purchase homes and automobiles. Physician practices, too, have bills to pay at the end of the month: rent and utilities, employee salaries and benefits. More and more, we hear from physicians who have had to take out loans or dip into private savings just to keep their doors open. Some have even been forced to close their practices -- all because they, like so many of you, are waiting for insurers to pay what they owe.

Physicians know that this situation cannot continue -- and increasingly the public knows it as well. Because we can't pay our bills -- or continue to provide our patients with the best, most up-to-date care -- unless big insurance pays on time. Like everyone else.

Tell me what you think. E-mail me.

Dr. Lewers of Easton, Md., a nephrologist and internist, was AMA board chair during 2000-01.