Prompt Pay Law definition

Prompt Payment to Providers

28 TAC §§21.2801-21.2816

When Does a Company Have to Pay a Claim for a Health Service?

  • Texas law provides different requirements depending upon:
    • Type of coverage – HMO vs. PPO vs. Non-network Indemnity
    • Who filed the claim – Insured, Enrollee, Physician, or Provider
    • Status of physician or provider – Contracted vs. Non-contracted

Clean Claim Rules

Meant to implement and clarify HB 610 passed during 1999 legislative session

  • Apply to:
    • HMOs
    • PPOs
    • Contracted Physicians and Providers
  • Effective for:
    • Claims filed for outpatient care received on or after 8/1/00
    • Claims filed for inpatient stays that began on or after 8/1/00
  • Clean Claim Rules
  • Perform three main functions:
    • Define elements of a clean claim
    • Clarify when the prompt payment period clock starts running
    • Clarify the required actions of a carrier upon receipt of a clean claim

What is a Clean Claim?

  • Data elements – see handouts
    • HCFA 1500
    • UB-92
  • Attachments
  • Additional clean claim elements
  • Format
    • Legible, accurate, complete
    • Too much information does not render an otherwise clean claim deficient!

Proof of Claims Submission

  • Return receipt
  • Electronic confirmation
  • Fax confirmation

What are the Carrier´s Responsibilities?

  • Notice of revised or additional data elements and/or attachments. Disclosure may be made by:
    • Written notice at least 60 days prior to requiring additional or revised information
    • Revision of physician or provider manual at least 60 days prior to requiring additional or revised information
    • Contract provisions
  • Act on clean claims within 45-day statutory claims processing period
    • Pay the claim, in total, in accordance with the contract
    • Deny the claim in total and notify the physician or provider in writing of the reason for denial
    • Pay portion and deny portion, and notify physician or provider in writing of reason for denial
    • Pay portion and audit portion, notify physician or provider in writing that claim is being audited, and pay 85% of the contracted rate on the audited portion
    • Audit entire claim, notify physician or provider in writing that claim is being audited, and pay 85% of the contracted rate
  • Notice of deficient claims within 45 days
  • Notice of changes in claims addresses, processors, etc.


  • Carrier acknowledges coverage of an enrollee, but claim processing takes longer than the 45-day statutory claim processing period
  • The rule does not specify a time limit for audit completion
  • After the audit is completed the carrier must give written notice of the results and pay the additional 15% balance of contracted rate 30 days after the audit is completed
  • A physician or provider must refund the 85% audit payment:
    • 30 days after the later of (a) receiving notice of audit results, or (b) exhaustion of enrollee’s appeal rights, if appealed within 30-day refund period
    • Chargebacks are allowed with written notice and opportunity to arrange an alternative reimbursement method

Penalties if Carriers Fail to Comply with the Clean Claim Rules

  • Full amount of billed charges up to U&C charges, or
  • Contracted penalty rate provided for in the physician or provider’s contract
  • Administrative penalties, up to $1,000/day per claim, may be assessed and collected by the State of Texas

Date of Claim Payment

  • Claim is considered to have been paid on the date of:
    • U.S. Postal Service postmark
    • Electronic transmission
    • Delivery of the claim payment to a commercial carrier, such as UPS or Federal Express, or
    • Receipt by the physician or provider, if a claim payment is made other than provided above

Coordination of Benefits

  • The amount(s) paid by primary carrier(s) is a clean claim element for secondary carriers
  • The statutory claim processing period for secondary carriers does not begin until primary payor information is provided

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