Strengthen prompt-pay laws: Insurer payment still too slow

Physicians report that insurers are finding loopholes that, at the least, violate the spirit of such laws. States must pass stricter laws to make sure these loopholes are closed.

Editorial. July 3, 2006.

Despite almost 10 years' worth of state legislation, physicians say insurers still find ways to slow down the payment process.

Every state but South Carolina has legislation laying out deadlines for insurers to process and either pay "clean" claims or explain -- in good faith -- why they aren't paying. Yet physicians all over the country are reporting that they struggle with insurers who find ways to game the system so that physicians don't get paid in a timely manner.

That's why the AMA continues to fight for strong prompt-payment legislation, including tweaking existing laws to close the loopholes that allow insurers to delay what should be prompt payments. Indeed, 16 state legislatures alone this year have taken up the question of tightening such laws. Even though most bills stalled in committee, the fact that so many bills were introduced -- following similar laws passed in other states in recent years -- shows that physicians aren't alone in believing that insurers are finding ways to get around existing prompt-payment laws.

Insurers, of course, don't see a problem. Health plans say that, to begin with, the legislation referred to only a few odd claims, mostly more complicated ones. America's Health Insurance Plans, an industry group, recently released a survey stating that 98% of all claims are paid (even most of the "unclean" ones) or otherwise responded to within 30 days, a common deadline in prompt-pay legislation, particularly for claims submitted by mail. AHIP says greater use of electronic claims, and not prompt-payment legislation, is key to physicians getting paid quickly.