Doctors Q & A
Enforcing your Legal Right to Obtain Prompt Reimbursement
Q. While I submitted a claim to a payer more than 3 months ago, I still have not received payment. My office staff has called the payer and it has confirmed that it has all the information it needs to pay the claim, yet explains (in not so many words) that there is a backlog. This is not the first time I've experienced this problem with this payer and it seems to happen more often when the charge amount is high. What can I do?
A. Payers make mistakes, 'misplace' submitted claims and sometimes intentionally delay reimbursement. This loss of claims and intentional payment delays is most prevalent with smaller regional payers.
The law empowers you to demand timely payment and you should not hesitate to assert your rights. Most states have a statute or administrative regulation that requires health insurance payers to pay claims within a specified period of time. These statutes are often referred to as the "prompt payment" statutes.
Payment Deadline
The prompt payment 'clock' usually begins to 'tick' once the payer has received a claim containing all required information (commonly referred to as a "clean claim"). Commercial payers must pay clean claims within a specified number of days from this date. This timeframe varies from one state to another, with many states establishing one deadline for paper claims and a shorter deadline for electronically submitted claims.
The average deadline for prompt payment of paper claims is approximately 45 days, while most states require electronic claims to be paid in 30 days. Nevertheless, it is important to consult your state's prompt payment statute to determine the controlling deadline since some states, such as Alaska, Georgia, Hawaii, Nebraska, New Hampshire, New York and North Dakota, require certain claims to be paid in 15 or fewer days.
While your state's prompt payment statute can be a powerful ally in battling the payers, you should remember that the law varies widely from state to state and that some statutes differentiate between HMOs and non-HMOs, participating and non-participating physicians, etc. Finally, please know that your state's prompt payment statute may not apply to certain claims involving workers' compensation matters, ERISA plans or governmental payers.
Term.
Some leases specify a particular calendar day as the commencement date for purposes of occupancy, rent accrual and determining the last day of the term. Other leases (especially new construction) will describe the commencement in terms of its relationship to an event that has not yet happened, such as securing certain municipal approvals. Finally, some leases will specify different dates for the commencement of the term, occupancy and the rent commencement. Therefore, it is important that you carefully read and understand the details concerning the term of the lease and related obligations.
Penalties
If a payer fails to render payment in a timely manner, you will be entitled to compensation including interest on the unpaid claim. Most states impose an interest penalty of 12 to 18 percent per annum upon delinquent payers. Some states, such as Missouri, impose additional penalties, including attorney's fees and tiered surcharges for seriously delinquent claims.
Steps to Ensure Timely Payment
You have the right to be paid in a timely manner and you should enforce this right. If your practice regularly struggles with prompt payment of claims, you should take the following steps:
- Determine the deadlines set forth in your state's prompt payment statute. You do not need an attorney; instead, simply review the website for your state's department of insurance or call your local medical association or society.
- Generate a weekly report of all unpaid, clean claims that are approaching or have surpassed the prompt payment deadline.
- If you do not otherwise regularly follow-up on claims, you should, at the very least, perform follow-up on the claims contained in your weekly report. This means you should call these payers regarding these claims and determine why you have not received a payment, EOB or ERA.
- If the prompt payment deadline has passed, send a simple, firm letter to the payer. The letter should be two paragraphs or less and must reference the essential claim details and the relevant state statute or regulation. It should state that the payer has violated the statute and demand immediate payment, together with statutory interest and fees. This will typically result in an immediate payment of any outstanding clean claims.
- If you do not receive payment within 10 days, you should resend the same letter, with the original date crossed out and a new date inserted above, together with the words, "Final Notice."
- If your "Final Notice," does not result in payment, you must consider your options. They include another communication with the payer, filing a complaint with your state's department of insurance or filing a complaint in court. If you are filing a court complaint, you should consider aggregating multiple claims to increase the pressure on the payer and minimize your filing fees and aggravation. Also, consider retaining an attorney, especially if your state statute gives you the right to obtain reimbursement of attorney's fees.
Summary
You have the right to receive prompt reimbursement from payers, but you can only enforce your right if you know the facts and have a system in place. If your practice struggles with prompt reimbursement of clean claims, develop a plan to aggressively assert your rights and follow through on this plan.
Stephen A. Snyder, Esq.
Vice President/General Counsel
Disclaimer: The information contained within the MTBC® Legal Corner is provided for general educational and informational purposes only and should not be construed as legal advice. The author of the Legal Corner does not represent the Web site user or the individual submitting a particular question. Please seek the advice of legal counsel to address any specific questions you may have regarding your particular facts or circumstances