Time Is Money - many states are pursuing prompt-payment laws for health insurance claims - Brief Article

Kiplinger's Personal Finance Magazine, Nov, 2000 by Melynda Dovel Wilcox

INSURANCE -- State legislatures are cracking down on HEALTH INSURERS that take too long to pay medical claims.

WHILE Congress continues to haggle over a patients' bill of rights, states are pushing ahead with laws that penalize insurance companies for claims that sit ... and sit.

All but ten states have implemented or proposed a prompt-payment measure. Typically, a "clean claim" -- one that is correctly and completely filled out with all required documents attached--must be paid within 30 to 45 working days or the insurer will be subject to stiff fines plus interest.

State Sen. Bill Schuette, who has introduced a prompt-payment bill in Michigan, describes the laws as legislative angio-plasty for a clogged health care system. But it isn't just red tape that ties up claims. "Some HMOs are undercapitalized," says Schuette aide Phil Ginotti, "so when a physician submits an $18,000 bill and it sits for a year and a half, they make money on the float."

While doctors and other providers are pushing for prompt-payment laws, patients should also benefit. Even if a medical expense is clearly covered by your insurance and you provide the correct information, you are ultimately responsible for the claim, explains Kathleen Hogue, a claims. assistance professional in Twinsburg, Ohio. "You have to husband the claim through." Otherwise, you run the risk of getting dunning letters and seeing your credit damaged.