How does the Prompt Pay Law affect Non-Contracted Providers?

The Texas Department of Insurance oversees and handles all complaints from physicians and providers about carriers who are failing to comply with the prompt payment requirements of Articles 3.70-3C, §3A and 20A.18B of the Texas Insurance Code and Department rules.  The Department is committed to achieving full company compliance with the prompt payment statutes and rules.

This article is to remind you of your responsibility to comply with the prompt payment laws for non-contracted physicians and providers and review some basic requirements that carriers must follow for making prompt payments to non-contracted physicians and providers.

For complete information on all of the required claims processing procedures to comply with Texas statutes and Department rules, refer to the appropriate provisions of the Texas Insurance Code and the Texas Administrative Code. Also, review the Prompt Payment Statutes and rules to verify that your internal procedures comply with these requirements.

NON-CONTRACTED PROVIDERS

Fee-for-service (indemnity plans) and preferred provider plans. When there is no contractual relationship between the physician or provider and the insurer, the insured may make an assignment of benefits to the physician or provider. This includes instances in which an insured in a fee-for-service or indemnity plan makes an assignment of benefits to a physician or provider or if an insured in a preferred provider plan receives services from a non-network provider and makes an assignment of benefits. Under Article 3.51-6, §1(d)(2)(x) (group health plans) and Article 3.70-3, §(A)(8) (11) (individual policies) of the Texas Insurance Code, the insurer must pay all benefits payable under the policy within 60 days after receipt of proof of loss.

HMOs. If an HMO enrollee receives services from a non-network physician or provider through a referral (as outlined in Article 20A.09(a)(3)(C)) of the Texas Insurance Code or emergency services from a non-network physician or provider (no referral needed), the HMO must make payment to the non-network physician or provider within 45 days after receiving the claim. The claim must include documentation reasonably necessary to process the claim and must be for covered services, as provided in Article 20A.09(j).

In situations where the enrollee or insured does not make an assignment of benefits or an authorization of payment to the physician or provider, the HMO or insurer will directly reimburse the enrollee or insured. The physician or provider can then obtain payment from the enrollee or insured.

ENFORCEMENT

The Department investigates all complaints alleging non-compliance with the requirements of the prompt payment statutes and rules. If allegations are substantiated, the Department may impose any authorized sanctions and penalties, including suspension or revocation of the carrier´s license to conduct the business of insurance in Texas. Other regulatory compliance options include administrative oversight, commissioner´s orders with fines, corrective action plans, management conferences, and reporting/monitoring requirements. In addition, if allegations of violation of Articles 3.70-3C, §3A and 20A.18B and 28 TAC §§21.2801-21.2815 are substantiated, the Department may impose administrative penalties of up to $1,000 per day for each claim that remains unpaid in violation of the prompt payment requirements.

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